In recent years, my country's new energy vehicle industry has developed rapidly, driving the rise of many upstream and downstream industries in the industrial chain. According to incomplete statistics, as of 2018, my country had ranked first globally in new energy vehicle production and sales for four consecutive years. Currently, my country's new energy vehicle ownership exceeds 2.2 million vehicles, with over 140 GWh of power batteries installed, demonstrating the rapid development of the power battery industry. However, at the same time, the issue of retired and recycled power batteries is also testing the industry's development. It is understood that since 2019, my country's new energy power batteries will gradually enter a large-scale retirement phase.
Wang Wei, assistant director of the Shenzhen New Energy Vehicle Application Promotion Center, stated that by 2020, my country's cumulative retired power batteries are expected to reach approximately 25 GWh, with the majority concentrated in the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta, where new energy vehicles are widely used. It is understood that when battery capacity decays to below 80% of its rated capacity, the power battery is no longer suitable for electric vehicles and can be repurposed for secondary use. Based on battery capacity, 100%–80% capacity is sufficient for vehicle power, 80%–20% is suitable for secondary use, and below 20% capacity must be scrapped and recycled.
Once power batteries reach the end-of-life recycling stage, improper handling and their entry into informal distribution channels can have numerous adverse effects on the environment and public safety. Without proper disposal, used power batteries pose safety hazards such as electric shock, explosion, and corrosion, significantly threatening the ecological environment and human health. Furthermore, the lithium, nickel, cobalt, manganese, and rare earth metals contained in used power batteries, if not fully recycled, will result in substantial resource waste.
Recycling companies are rapidly expanding their market share, securing distribution channels and dominating recycling entry points.
As a crucial link in the new energy vehicle industry chain, the market for power battery recycling is still in its early stages of development, with numerous power battery recycling companies continuously exploring and growing. While no dominant company has yet emerged in the power battery recycling sector, the future market potential is clearly evident. Many investors and power battery-related companies have already set their sights on this opportunity, vying to establish a foothold in the power battery recycling field and secure advantageous market resources in advance.
In recent years, some listed companies have increased their investment in the power battery recycling sector, aggressively expanding their operations to secure high-quality used power battery channels before the peak of retired power batteries arrives. This aims to accelerate the development of their power battery recycling business, seize entry points into the recycling market, and establish strong brand recognition. Previously, the "Interim Measures for the Management of Recycling and Utilization of Power Batteries for New Energy Vehicles," jointly issued by the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Environmental Protection, the Ministry of Transport, the Ministry of Commerce, the General Administration of Quality Supervision, Inspection and Quarantine, and the National Energy Administration, explicitly stated that it would continue to encourage automobile manufacturers, battery manufacturers, end-of-life vehicle recycling and dismantling companies, and comprehensive utilization companies to cooperate in various forms to jointly build and share used power battery recycling channels.
The cooperation between power battery recycling companies and car manufacturers and battery manufacturers is becoming increasingly close. For example, Hunan Bangpu is with BMW, GEM is with BYD, BAIC Penglong and Ganzhou Haopeng are with BAIC New Energy, etc. Guanghua Technology has also quickly established partnerships with many car manufacturers such as Guangxi Huaao, Nanjing Jinlong, Chery Wanda and Wuzhoulong Automobile in a short period of time, and launched a series of strategic cooperation in the field of power battery recycling.
To alleviate the situation of high dependence on foreign upstream resources
Used power batteries contain abundant valuable metal resources such as lithium, nickel, and cobalt. The recycling of power batteries is crucial for effectively achieving resource circularity. A well-developed power battery recycling system is of great significance for effectively reducing battery production costs, mitigating the risks of upstream raw material scarcity and price fluctuations, and ensuring the healthy, stable, and sustainable development of my country's new energy vehicle industry.
With the continuous increase in the cumulative installed capacity of power batteries, the demand for resources such as lithium, nickel, and cobalt in the power battery industry is growing. Globally, lithium, cobalt, and nickel resources are highly concentrated and exhibit significant oligopolistic characteristics. The prices of these resources have consistently shown a fluctuating upward trend. Currently, while my country's upstream resources for power batteries are abundant, their lithium resources are of poor quality, while nickel and cobalt resources are relatively scarce. Therefore, my country needs to import large quantities of lithium, nickel, and cobalt resources, resulting in a high dependence on foreign sources, which has a certain impact on the long-term stable development of my country's power battery industry.
BYD Chairman and President Wang Chuanfu once likened the lithium, copper, and cobalt extracted from spent power batteries to a treasure trove. Experts explain that ternary lithium batteries contain abundant rare metals such as nickel, cobalt, and manganese. Theoretically, extracting materials like lithium, cobalt, nickel, manganese, copper, aluminum, graphite, and separators from these batteries could yield an economic benefit of approximately 42,900 RMB per ton, demonstrating considerable economic feasibility. Relevant institutions predict that by 2025, the dismantling and recycling of ternary lithium batteries will account for 77.5% of the entire power battery recycling market.
Say goodbye to loss-making recycling; large enterprises with innovative recycling technologies begin to make a profit.
Previously, some referred to the power battery recycling industry as the "last mile" of the new energy vehicle industry's development, while others called it the "last blue ocean." According to experts, my country will enter a period of explosive growth in the retirement of power batteries in two years. Currently, the power battery recycling industry is at a critical stage of rapid development. The industrialization level and market concentration of the power battery recycling market are relatively low. The entire industry is moving towards large-scale, standardized, and regulated development. A large number of potential competitors are rapidly entering the field through project investment, mergers and acquisitions, and seeking cooperative ventures, intensifying competition and driving industry optimization and upgrading.
Currently, large enterprises with innovative recycling technologies have begun to profit. Taking Shenzhen GEM Co., Ltd. as an example, GEM owns the world's largest recycling base for waste batteries and cobalt-nickel-tungsten resources, and China's largest automated battery dismantling plant. According to GEM, in 2018, GEM implemented a transformation of its electronic waste business, adjusting its dismantling product structure. Simultaneously, it actively explored the operation model of recycled resource yards and upgraded its urban mining business, achieving a refined, value-added model for the recycling and reuse of electronic waste. While achieving financial balance in the electronic waste business, the recycled resource business segment contributed a gross profit of RMB 235.8752 million, which included the power battery recycling business.
The future of the power battery recycling market is promising and has huge potential.
With the large-scale production of new energy vehicles, the power battery recycling market has enormous potential. In 2018, the market size was approximately 432 million RMB. With the large-scale promotion of new energy vehicles in my country, some organizations predict that by 2025, the cumulative amount of scrapped power batteries in my country will reach 350,000 tons, and the power battery recycling market size will reach 20.371 billion RMB. Among them, the value of lithium iron phosphate batteries used in secondary applications will reach 2.575 billion RMB, and the value of ternary lithium battery recycling and dismantling will reach 17.796 billion RMB.
Currently, my country's power battery industry has not yet fully entered a large-scale retirement boom. Most power battery recycling companies primarily source their waste power batteries from defective products manufactured by battery companies, as well as retired batteries from vehicles promoted under the "Ten Cities, Thousand Vehicles Project." At present, my country's power battery recycling technology is relatively mature and stable. According to the "Industry Standard Conditions for Comprehensive Utilization of Waste Power Batteries for New Energy Vehicles," under hydrometallurgical conditions, the comprehensive recovery rate of nickel, cobalt, and manganese should be no less than 98%; under pyrometallurgical conditions, the comprehensive recovery rate of nickel and rare earth elements should be no less than 97%. According to relevant institutions, the cumulative market space for the recycling of metals such as nickel, cobalt, manganese, and lithium is estimated to be approximately RMB 43.6 billion from 2019 to 2025.
Power battery recycling companies should always prioritize fulfilling their social responsibilities and uphold environmental protection principles with unwavering commitment. Simultaneously, they must adhere to market principles and continuously improve the sustainable development of the power battery industry chain. By establishing strategic partnerships with automakers and battery manufacturers, securing distribution channels, and seizing entry points into the recycling market, power battery recycling companies are striving for industry leadership. As the peak period for retired power batteries arrives, the power battery recycling sector will also see greater profit potential.
