In 2018, the market recycled 5,472 tons of power batteries, accounting for only 7.4% of the total scrapped power batteries; the recycled digital batteries amounted to 106,300 tons, accounting for about 63.6% of the total scrapped amount. Compared with the entire lithium battery scrapping market, the expected recycling volume has not yet been achieved.
The new energy vehicle industry is a national strategic emerging industry in my country, and with strong policy support and active guidance, it has entered a period of rapid development. Data from the Gaogong Industry Research Institute (GGII) shows that China's new energy vehicle industry has experienced significant growth since 2012, with production increasing from 12,500 vehicles in 2012 to 1,220,700 vehicles in 2018, representing a compound annual growth rate of 114%.
With the retirement period of power batteries installed in vehicles between 2012 and 2014 approaching, 2018 was considered by the industry as the first year of the power battery retirement wave. However, the amount of power battery recycling in the market did not reach a "small peak", and some batteries were still not effectively recycled and utilized.
According to GGII statistics, the total amount of scrapped power batteries in 2018 reached 74,000 tons, and the total amount of scrapped digital batteries reached 167,000 tons. However, the current recycling volume of power batteries in the market is far below expectations. In 2018, the market recycling volume of power batteries was 5,472 tons, accounting for only 7.4% of the total scrapped power batteries; the recycling volume of digital batteries was 106,300 tons, accounting for about 63.6% of the total scrapped volume. Compared with the entire lithium battery scrapping market, the expected recycling volume has not yet been achieved.
Currently, the amount of lithium batteries recycled in China is far lower than the total amount of scrapped batteries. The main reasons for this are as follows:
1) The domestic lithium battery recycling system is inadequate in terms of channels, systems, and regulations, resulting in the majority of used batteries, especially digital batteries, not being recycled;
2) The laws, regulations, and supervision regarding lithium battery recycling still need improvement. Although the entities responsible for recycling have been clearly defined, they are not yet strictly enforced.
3) Due to reasons such as technical secrets or unclear economic benefits, some manufacturers do not recycle and reuse used batteries;
4) Due to cost issues, car manufacturers have not scrapped batteries that have reached their theoretical lifespan and they are still circulating in the market, resulting in the actual total scrapping volume being far lower than the theoretical scrapping volume, which in turn leads to a decrease in the recycling volume.
Currently, the recycling and utilization of lithium batteries mainly falls into two categories:
1) Utilize batteries that meet the required energy decay levels in a tiered manner (for energy storage or low-speed electric vehicles), such as lithium iron phosphate batteries and ternary lithium batteries;
2) Dismantle batteries with no value for secondary use and recover materials such as nickel, cobalt, manganese, and lithium, such as digital batteries and some ternary lithium batteries. GGII research shows that in 2018, the total amount of power batteries recycled was 2,460 tons used for secondary use, while the total amount of batteries recycled and dismantled was 109,300 tons. In the battery recycling field, especially in the power battery recycling field, the scale of batteries used for secondary use is far lower than the scale of recycling and dismantling.
The main reasons for the above situation are as follows:
1) The lack of clear responsibility among battery manufacturers has led to some scrapped power batteries re-entering the market;
2) Some power batteries were disposed of prematurely for other reasons and did not enter the market;
3) Due to cost issues, automakers are allowing some truly retired power batteries to remain in the market, rather than being retired.
4) In the past, the number of scrapped power batteries was relatively small, making it difficult to match old batteries with new ones;
5) The technology maturity in the field of cascade utilization is low, and the market potential of energy storage and reuse has not been released on a large scale.
According to GGII's analysis, the Chinese lithium battery recycling market will exhibit the following development trends in the next few years:
1) At present, the recycling method for lithium batteries will still mainly be dismantling and recycling, and digital batteries will remain the main type of battery recycling.
2) After 2020-2022, as the final scrap life of power batteries approaches, the recycling volume of power batteries will reach a "peak," and the market recycling volume will account for more than 20%.
3) With the accelerated commercialization of 5G and the large-scale retirement of lead-acid batteries, the recycling of power batteries will experience rapid growth in the field of secondary use, and the market prospects are promising;
4) At present, the relevant supporting policies and battery recycling models are not perfect, and the growth rate of China's lithium battery recycling industry is limited. In the future, with the gradual implementation of relevant policies by various national departments and the increase of the added value of end products, some companies will usher in a large profit margin.
