With global oil shortages, rising oil prices, increasing environmental pressures, and adjustments to the domestic energy structure, new energy vehicles are gradually becoming a development trend in the Chinese and global automotive industries. Increased policy support, large automakers' aggressive expansion, and growing consumer awareness of environmental protection have led to the rapid expansion of my country's new energy vehicle market.
In 2009, a series of supportive policies opened up a fast track for the growth of new energy vehicles in my country. In 2011, the industry entered the industrialization stage, and in 2014, my country's new energy vehicle market experienced an explosive growth, with both production and sales increasing by more than three times year-on-year.
New energy vehicles can be divided into three sectors: upstream raw materials, midstream components, and downstream applications. It can be seen that the batteries, motors, and electronic controls (commonly known as the "three electrics") in the midstream sector constitute the core of new energy vehicles. Unlike traditional engines, they form the "electric" powertrain. Lithium batteries play a crucial role in the production process of new energy vehicles, and the record-breaking production and sales of new energy vehicles in China have led to explosive growth in the power lithium battery industry.
Due to technological limitations and frequency of use, the lithium-ion batteries used in China's new energy vehicles have a designed effective lifespan of approximately three years, after which they need to be replaced. Ruixin Consulting believes that 2018 was the first year of lithium-ion battery recycling for new energy vehicles, and that my country's new energy vehicle power batteries will enter a large-scale retirement phase.
There are two main types of disposal methods for retired lithium batteries in the industry: reuse and resource recycling. Reuse is further divided into replacement for new energy vehicles with lower energy consumption, use in large-scale energy storage equipment, and use of lithium batteries in other low-energy consumption applications; resource recycling is the dismantling and recycling of lithium batteries.
The reuse and recycling of retired lithium batteries will bring huge economic benefits to the new energy market. According to the China Association of Automobile Manufacturers' (CAAM) new energy vehicle production and sales data at the end of 2017, the amount of retired power lithium batteries in 2018 reached 11.09 GWh, with a market space of 6.591 billion yuan corresponding to reuse and recycling. Among them, the revenue from lithium battery recycling is expected to be 44,200 yuan/ton, and the lithium battery market will be worth tens of billions of yuan in the future.
The recycling of lithium batteries is timely. At the end of 2017, the Ministry of Finance ended its three-year subsidy policy for new energy vehicles, and the new energy vehicle industry returned to normal operations. Improving technological content, extending battery life, and reducing costs and increasing efficiency will become important directions going forward. Experts at Ruixin Zhicheng believe that with the gradual rise in the price of lithium battery raw materials, lithium battery recycling will effectively solve the problem of excessively high lithium battery manufacturing costs.
After years of use and charging, the internal structure of lithium batteries changes. With increasing age, the risks of combustion and leakage increase annually. Lithium battery recycling effectively addresses issues such as explosions and environmental pollution. For the government, preventing environmental pollution and resource waste is the significance of lithium battery recycling. For the industry, lithium battery recycling is an indispensable part of the complete lifecycle of the new energy vehicle industry, forming a closed loop in the industrial chain from production, sales, operation, after-sales service to recycling and reuse. For battery manufacturers, power battery recycling presents business opportunities and also has a positive impact on their corporate social image.
Before the suspension of subsidies for new energy vehicles at the end of 2017, many national and local governments issued a number of policies on the recycling of new energy vehicles. In the future, the government will be the biggest supporter of the new energy vehicle recycling industry, and the industry will have better development.
With the popularization of new energy vehicles in my country, the increasing environmental pressure year by year, the continuous rise in the price of lithium battery raw materials, and breakthroughs in reuse and resource recycling technologies, Ruixin Zhicheng believes that the lithium battery recycling market will reach approximately 13 billion yuan from 2018 to 2023. 2018 will be a bumper year for lithium battery recycling, and also a crucial year. Reuse and resource-based dismantling will bring the lithium battery raw material market to a "supply and demand balance," and the market price will also tend to be more rational. At the same time, it can also effectively alleviate the cost pressure brought about by the Ministry of Finance's suspension of subsidies for new energy vehicles.
