Recently, Guanghua Technology announced that BAIC Penglong, a subsidiary of BAIC Group, has signed a cooperation framework agreement with Guanghua Technology. The two parties will cooperate on businesses such as the cascade utilization of retired power batteries and the recycling and processing system for waste batteries. The announcement also stated that the two parties will continue to collaborate with new energy vehicle manufacturers and related battery companies.
Since 2010, fueled by national industrial policies, the new energy vehicle industry has experienced explosive growth, bringing revolutionary changes to China's automotive industry. Simultaneously, due to their limited lifespan (5 to 8 years), electric vehicle power batteries are expected to face a wave of retirements in the next two years. According to industry data, with the rapid development of the new energy vehicle industry, by 2020, my country's total retired power lithium batteries will reach 32.2 GWh, approximately 500,000 tons; by 2023, the amount will reach 101 GWh, approximately 1.16 million tons.
With the expansion of the power battery recycling market and the changing trends in battery materials, the prices of cobalt, nickel, and lithium carbonate/lithium hydroxide have been boosted to some extent. Industry data shows that the metal content varies among different types of power batteries. Based on projections of the future scrap volume of lithium-ion batteries in my country, the market value of recyclable valuable metals could reach: cobalt 7.3 billion yuan, nickel 8.4 billion yuan, lithium 14.6 billion yuan, and manganese 850 million yuan by 2023.
However, there are still many challenges in battery recycling in China. First, different automakers choose different types of batteries when manufacturing vehicles, which poses a major obstacle for battery recycling companies during the dismantling and recycling process. The lack of standardized technical standards among battery companies makes testing before reuse difficult, increasing the risk of accidental damage. Second, China's power battery recycling technology is not yet comprehensive, resulting in high recycling costs. This easily leads to a situation of high investment but insufficient returns. Finally, some unqualified companies recycle used batteries and then arbitrarily dispose of them using substandard methods, causing serious environmental pollution. With increasingly stringent environmental regulations, such unqualified recycling companies are being shut down, narrowing battery recycling channels and causing confusion in the pricing system.
Battery recycling is primarily a matter of safety and environmental protection, with the secondary concern being how to maximize the residual value of used batteries. Currently, a complete and standardized power battery recycling system has not yet been established. Whether building a recycling system with automobile manufacturers as the responsible entities will become the true mainstream channel in the recycling market, and whether it can cope with the safety and environmental pressures brought about by the mass disposal of batteries, remains to be seen. China's power battery recycling system is still in its early stages of development. Policies issued by relevant national departments aim to establish cooperation among upstream and downstream enterprises in the entire industry chain, requiring automobile manufacturers to build power battery recycling service outlets and to unite upstream battery manufacturers, downstream recycling companies, and end-of-life vehicle dismantling companies to build a power battery recycling system.
In addition to the joint efforts of upstream and downstream enterprises in the industry chain, the recycling and utilization of power batteries also requires efforts in establishing a power battery recycling system: First, enact mandatory regulations for power battery recycling and utilization, setting entry thresholds for recycling and utilization enterprises from the perspectives of environmental protection and safety; second, strictly supervise and enforce the law, and punish enterprises and individuals who illegally transfer and sell power batteries; third, introduce preferential tax systems for environmentally friendly recycling and utilization enterprises, so that compliant recycling and utilization enterprises can carry out environmentally friendly recycling and disposal activities normally; fourth, the media should strengthen publicity to the public, raise consumers' awareness of safety and environmental protection, and encourage consumers to transfer waste batteries to formal recycling channels.
With the impending wave of retired power batteries, the power battery recycling industry is poised for significant growth. However, the future of the industry remains uncertain, and a sustainable business model has yet to emerge. In the future, the industry can only achieve healthy development by focusing on safety and environmental protection, and moving towards standardization and centralization.
