The domestic new energy vehicle market is developing rapidly, and the market for power battery recycling is opening up accordingly. By 2020, the cumulative production and sales of new energy vehicles are expected to reach 5 million units, resulting in more than 248,000 tons of scrapped power batteries.
From the perspective of the lithium battery industry chain, many industry insiders believe that the recycling and utilization of retired power batteries based on their life cycle will be a very important emerging field in the industry. According to analysis data, the total market size in this field is expected to exceed 10 billion yuan in 2020 and is projected to reach about 38 billion yuan in 2025.
In the early stages of the current blue ocean of power battery recycling, the national policy system for power battery recycling is not yet perfect. However, many forces, including car manufacturers, battery companies, material companies, third-party recycling organizations, and cross-industry capital, have entered the field, injecting new impetus into the development of the entire industry while also bringing many changing factors.
How should we view the national policy system? What trends will the power battery recycling industry take? GGII (Gaogong Lithium Battery Research Institute) conducted an exclusive interview with Chen Jinzhao, General Manager of Zhongtian Hongli Qingyuan Co., Ltd. (For more information about Zhongtian Hongli, please click: Zhongtian Hongli's rapid development in the power battery recycling market) to discuss these questions.
GGII (Gaogong Lithium Battery Research Institute): Third-party professional recycling organizations such as BNP Paribas, GEM, and Ganzhou Haopeng have closely integrated with companies in the industry chain, and their business has even expanded into the field of cathode materials. Compared with its competitors, what are the advantages of Zhongtian Hongli?
Chen Jinzhao: Bangpu, GEM and Ganzhou Haopeng are the earliest third-party professional recycling organizations in China. They have been deeply involved in the field of power battery recycling for many years, made many beneficial contributions to the development of the industry, and accumulated a wealth of experience. We will learn from our predecessors and strive to find our own unique path in recycling.
We have seen that since September of last year, a number of listed companies, universities, and social research institutions have joined the ranks of power battery recycling, and various new dismantling and recycling technologies are constantly emerging. These new technologies are highly automated, efficient in dismantling, have high recycling rates, and are cleaner and more environmentally friendly. Zhongtian Hongli will actively introduce various new recycling technologies to improve recycling and utilization efficiency and build its own unique recycling advantages.
GGII (Gaogong Lithium Battery Research Institute): China is continuously improving its power battery recycling system, but problems still exist, such as an imperfect recycling mechanism, an incomplete system, a single business model, inactive innovation/application, and a lack of incentive mechanisms. What are your views on this? What suggestions do you have?
Chen Jinzhao: Since the release of the "Technical Policy for the Recycling and Utilization of Power Batteries for Electric Vehicles (2015 Edition)" in January 2016, which first proposed the establishment of a power battery recycling and utilization system linking upstream and downstream enterprises and implementing the extended producer responsibility system, and then the "Interim Measures for the Management of Recycling and Utilization of Power Batteries for New Energy Vehicles" in February 2018, a total of 13 regulatory documents have been issued, and the policies and regulations of the domestic power battery recycling system have been continuously strengthened and improved.
The release of these normative documents has made good provisions and arrangements from a macro and top-level design perspective, but it is necessary to formulate some more operational and specific requirements and implementation methods.
My personal suggestion is to establish a cross-departmental management unit or entrust the original resource recycling and utilization authority with this responsibility, give full play to the role of industry associations and non-governmental think tanks, select some provinces and cities to establish and build pilot enterprises and demonstration sites for recycling and utilization, and explore more effective recycling access mechanisms, recycling system standards and incentive mechanisms.
GGII (Gaogong Lithium Battery Research Institute): The power battery recycling market is in its early stages, attracting significant investment from automakers, battery companies, material suppliers, third-party recycling organizations, and cross-industry capital. What impact will this have on the industry?
Chen Jinzhao: With the significant increase in the production and sales of new energy vehicles and power batteries in China, many forces have invested heavily in and laid out the power battery recycling market, bringing new talents, new technologies and a large amount of financial support to the industry. New recycling technologies are constantly emerging, and the industry is in a "thriving" state in a short period of time.
However, the hidden dangers behind this "thriving" industry are also quite significant, and the competition in the future will be extremely fierce: First, the number of power batteries available for recycling is currently insufficient, and many recycling companies are operating at low capacity and cannot recycle batteries; second, the recycling price of power batteries is artificially inflated; and third, there are many small workshops, making it difficult to achieve economies of scale in recycling and comprehensive utilization.
GGII Lithium Battery: Could you predict the operating trend of the power battery recycling industry over the next 3-5 years?
Chen Jinzhao: 2018 was the first year of development for the power battery recycling industry. With the significant increase in the production and sales of new energy vehicles and power batteries in China, the power battery recycling market will also usher in a period of rapid development in the next 3-5 years. It is expected that the power battery recycling industry will belong to comprehensive recycling companies with strong technical strength, high R&D investment, large scale and strong innovation capabilities.
