Today, the hottest industry is new energy vehicles. Car manufacturing has become a tacit choice for major giants. The importance of batteries that provide power to cars is self-evident. With the increase in the number of electric vehicles, the battery stock has also risen.
From the first year of rapid marketization of new energy vehicles in China in 2015, based on the service life of power batteries of 5-8 years, the first wave of retirement of power batteries will officially enter its peak period this year and next year. A realistic challenge is placed in front of Volkswagen, that is, where will the power battery go after retirement go?
On the one hand, discarding power batteries at will will cause heavy metal contamination and electrolytes are also highly toxic. On the other hand, valuable metal elements such as nickel, cobalt, manganese, lithium salt, , etc. can be decomposed from the retired power battery, and can be recycled to the manufacturing of new batteries.
If it can be used reasonably and the required resources can be dismantled, it will greatly reduce the manufacturing cost of power batteries.
This article will analyze the reasons for the improvement of the power battery recycling economy, and analyze the different business models and representative companies in the power battery recycling industry chain. Finally, in response to the problem of industry standardization, the domestic market and overseas market will be compared and prospected.
The power battery recycling track is long and the snow is thick
First of all, from the perspective of industry background, the rapid development of new energy vehicles has also promoted the development of the power battery recycling industry.
In 2021, my country's new energy vehicle sales reached 3.521 million units, a significant increase of 157.5% year-on-year. Driven by the high prosperity of new energy vehicle sales, my country's installed power battery capacity reached 154.5GWh in 2021, and the installed capacity CAGR from 2015 to 2021 was 45.5%, and the installed capacity scale continued to grow.
As the late-stage lithium battery industry, power battery recycling, demand has been rising year by year due to the prosperity of the industrial chain.
Under the current technical conditions, the first wave of power batteries has entered the tide of retirement. While the new energy vehicle industry chain continues to be in a high prosperity, it has also laid a foundation for the subsequent battery recycling market.
Secondly, from the track itself, power battery recycling is driven by the combined efforts of three major elements: environmental protection demands, strategic value and economics.
1. Waste batteries have great environmental hazards. Disposal at will will cause serious pollution. Recycling is conducive to energy conservation and emission reduction.
Although the power battery does not contain heavy metal pollutants such as lead, cadmium, and mercury, the cobalt, nickel, manganese and other metals contained in the power battery will accumulate through the food chain, endangering human health. Electrolyte solvents and separators will also cause pollution of organic matter.
Power battery manufacturing is a high-energy-consuming industry. The energy consumption in the material acquisition and manufacturing process is about 30 times that of the engine, and it will release a large amount of greenhouse gas . If the waste power batteries can be reused, the corresponding automobile carbon emissions per kilometer will drop by 22g and 4g respectively, thereby significantly reducing carbon emissions. Recycling and disposing of used power batteries is a necessary measure to ensure the sustainable development of the new energy vehicle industry.
2. Strategic metal resource supply and demand is imbalanced, and its external dependence is extremely high.
Metals such as lithium, cobalt, nickel and other metals are the basic raw materials for power batteries production, while the supply and demand of cobalt and nickel resources in my country are seriously unbalanced, and demand accounts for 32% and 59% of the world's total demand respectively, but the supply is only 1.5% and 4.8% of the world's total.
my country's lithium resource proven reserves have reached 1.5 million tons, but due to factors such as quality and mining conditions, my country's actual supply capacity of lithium resources is relatively weak and its dependence on the outside is extremely high.
And after the outbreak of the new crown epidemic, countries have further strengthened their efforts in the development of green and low-carbon economy, further pushing up the prices of upstream metals. This has also led to a significant reduction in profits of battery and vehicle manufacturers, which is not conducive to the long-term development of the industry.
3. The recycling value of used batteries is extremely high.
The battery materials such as the positive electrode, negative electrode, separator, electrolyte of the retired lithium-ion power battery still contain a large amount of valuable metals and other renewable ingredients, and the resources are rich in categories and still have extremely high recycling value.
The average cost of lithium-ion power batteries in 2021 is US$101/KWh, among which high-value metal compound such as lithium, nickel, cobalt, manganese, etc. in the positive electrode materials account for as high as 51%, which has extremely high recycling value.
As a result of strong downstream demand and limited battery metal production capacity, the prices of battery materials have risen continuously in the past two years; as of July 25, 2022, the prices of battery-grade lithium carbonate, lithium hydroxide , cobalt sulfate , and nickel sulfate have increased by 1075%, 835%, 33%, and 54% compared with the same period in 2020. It has also further promoted the development of the power battery recycling industry.
At the joint efforts of these three factors, the power battery recycling industry is currently at the starting point of a long-term prosperity cycle.
In addition, at the point in time, the first batch of power batteries have reached their retirement years, and the demand for recycling and reuse is expected to rise year by year.
my country began mass production of new energy vehicles in 2014. The earliest batch of large-scale power batteries have reached their retirement years. The market will form a new normal for large-scale retirement. In the future, the demand for recycling and reuse is expected to rise year by year. According to researchers at Tianfeng Securities, the CAGR is expected to be 48.9% from 2021 to 2030. From the perspective of development stage, the industry is currently at the starting point of a decade-long prosperity cycle and has a considerable prospect.
The market in the future is also broad
Along with the development of new energy vehicles, the two mainstream routes of tiered utilization and recycling have also been differentiated.
Classified utilization refers to the use of power batteries that have reached their designed lifespan for other fields. The target market includes low-speed electric vehicles , energy storage and other fields.
When the capacity of the power battery is less than 80%, it cannot meet the requirements for normal driving of the car. At this time, the use of waste power batteries can be applied to electric vehicles, energy storage and other fields with low battery requirements through disassembly, screening, and reorganization to achieve ladder use.
At present, the utilization of retired power batteries in my country has been used in the fields of power energy storage systems, communication base station backup power supplies, low-speed electric vehicles and smart street lights. However, at present, the cascade utilization is mainly based on demonstration projects and has not yet formed economies of scale.
Recycling and utilization extracts lithium, nickel, cobalt, manganese and other battery metals to realize resource circulation.
When the capacity of the power battery is less than 20%, its performance cannot meet the needs of any commercial application. At this time, the lithium, nickel, cobalt, manganese and other metals in the waste power battery can be extracted through the regeneration process to achieve resource circulation.
Although my country's battery recycling industry started late, it has formed a number of recycling processes with pyrometallurgy, hydrometallurgy and biometallurgy as benchmarks. Among them, the wet process has now become the mainstream technical route of the industry due to its high recovery rate and directional recovery of metals.
At present, the industry's recycling technology has begun to mature, but it is still in its early stages of development compared with the world's top recycling technology. In the past decade, with the development of my country's new energy vehicle industry, power battery recycling technology has also been continuously improving. The annual compound growth rate of the number of power battery recycling technology patents reached 37% from 2015 to 2021.
The potential market space for power battery recycling is very wide.
EVTank and the IV Economic Research Institute jointly released the "White Paper on the Development of China's Waste Lithium Ion Battery Recycling, Disassembly and Climbing Utilization Industry (2022)". The data of the white paper shows that in 2021, the recycling volume of China's theoretical was as high as 591,000 tons, of which the theoretical recycling volume of waste power batteries was 294,000 tons, accounting for 50%. The theoretical recycling volume of 3C and small power waste lithium ion batteries was 242,000 tons, accounting for 41%, and the theoretical recycling volume of other related waste materials was 55,000 tons, accounting for 9%.
According to the white paper, it is estimated that the theoretical recycling volume of waste lithium batteries in China will reach 762,000 tons in 2022, and will reach 1.851 million tons in 2025, with a speed-up of growth, with a compound growth rate of 33% from 2021 to 2025. In 2022, the theoretical market size of China's waste lithium battery recycling will reach 48.29 billion yuan, and will reach 78.41 billion yuan by 2025, with a compound growth rate of 17.5% from 2022 to 2025.
The business model channel is king
In the power battery recycling track, the differences in recycling channels directly determine the advantages and disadvantages of the business model.
Battery recycling is the core link of power battery reuse. Different recycling channels will have a huge impact on the company's costs. The number of recyclable batteries often determines the upper limit of the business scale of the company's subsequent development.
According to the recycling entities, there are currently three mainstream business models in the industry, namely: ① The model with battery manufacturers as the recycling entities; ② The model with automobile manufacturers as the recycling entities; ③ The model with third parties as the recycling entities.
1. Using power battery vendors as the main recycling agency has the widest channels, which is conducive to creating a resource closed loop.
The business model dominated by power battery manufacturers has a relatively diverse battery recycling channel. Power battery manufacturers can rely on channels built by electric vehicle dealers to carry out battery recycling. At the same time, battery manufacturers can also cooperate with automobile dismantling companies and battery leasing companies to complete battery recycling.
At the same time, the power battery production enterprises control the flow of waste batteries, which is conducive to the production enterprises and recycled lithium, nickel, cobalt, rare earth and other enterprises to establish good cooperation relationships, forming a closed-circuit recycling model of "power battery production → power battery consumption → power battery recycling → resource recycling → power battery production" of resources, so that various metals can realize a closed-loop network.
CATL As the "No. 1" of power batteries, it is also outstanding in the field of battery recycling, leveraging Guangdong Pubang to create a commercial closed loop.
CATL has acquired waste battery recycling companies and entered the power battery product cascade utilization and recycling industry chain, successfully building an industrial closed loop of "battery production-use-cascade utilization-recycling and resource regeneration", thus creating space for enterprises to improve their bargaining power for upstream raw material manufacturers and reduce the production costs of power batteries.
2. With automobile manufacturers as the recycling entity, the channel advantages are the most obvious.
Full vehicle manufacturers have a rich automobile sales network and can use existing logistics channels to reverse the waste batteries to the manufacturer, thus saving unnecessary additional channel costs. At the same time, the breadth of the sales network can be fully utilized to improve the efficiency of recycling. However, in the subsequent reuse process, vehicle manufacturers often need to form industry alliances and cooperate with battery manufacturers or third-party companies to complete the secondary utilization of used batteries.
The representative enterprise of power battery recycling for vehicle manufacturers is SAIC Group , and its first power battery cascade utilization project has been successfully implemented.
In June 2020, the large-scale photovoltaic wind energy integrated energy storage power station at Baojun Base was put into use, with the power storage capacity up to 1,000 kilowatt-hours.
The power station is built with retired power batteries in the R&D stage of Baojun E100 and E200. By analyzing the residual value of the energy storage of the remaining utilization of the retired battery, the battery detection and reorganization reached the available standards and then reused, successfully exploring the economic value of the retired battery.
At the same time, SAIC Group and CATL cooperated in depth and signed a memorandum of understanding on strategic cooperation . Both parties intend to jointly promote the recycling and reuse of power battery batteries for new energy vehicles. Both parties will make full use of their respective leading advantages in new energy research and development, manufacturing, and services, and work together to promote the better and faster development of the domestic power battery recycling industry. It also provides technical support for subsequent reuse.
3. Taking a third party as the recycling entity, the professional technology is the most complete.
The third party is the main body, specifically, a professional resource recycling company is responsible for the recycling of used batteries, thereby realizing the integration and specialization of "battery recycling + subsequent utilization". Third-party companies that choose this model often have better processing technology.
However, this model requires third-party companies to establish recycling channels on their own, so third-party companies are required to form a stable battery supply source by reaching in-depth cooperation with vehicle manufacturers and battery manufacturers.
This model has problems and difficulties in high recycling costs and high recycling difficulties. If the channel problems are solved, there will be huge room for enterprise development.
The representative of the company with a third party as the main body is Grinmei . In terms of recycling channels, it has signed agreements with more than 500 vehicle manufacturers and battery factories, including Toyota , Changan , NIO , WM Motor, Xiaopeng , etc. to establish a targeted recycling network for waste batteries.
At the same time, the company devoted itself to research and development, gradually breaking through key technologies for green circulation of waste resources such as waste batteries, electronic waste and scrapped cars, and took the lead in building a world-leading waste battery comprehensive utilization factory.
Using ultra-precision directional extraction technology and endogenous aluminum fluorine adsorption purification technology, the problem of low lithium recovery rate in traditional processes is solved. The lithium recovery rate exceeds 90%, successfully achieving efficient recovery of metal resources.
In the power battery recycling track, various business models have their own advantages. But in the final analysis, the vehicle manufacturer is at a core position.
Comparative and summary of the above three power battery recycling business models, and the following conclusions can be drawn:
The vehicle manufacturer has the most obvious channel advantages, which can achieve low-cost and high-efficiency battery recycling, and has a core position in the industrial chain. Battery manufacturers can coordinate with upstream and downstream companies to form an industrial closed loop. Third-party companies have professional recycling technology, and the depth and breadth of their cooperation with vehicle manufacturers, battery factories and other channel parties determine their core competitiveness and business development prospects.
At present, three business models coexist, but vehicle manufacturers are at the core because of their 4S stores all over the country, with the most obvious channel advantages and are in a core position.
Under the disorderly competition, industry standards have gradually improved
Although the power battery recycling industry has a long slope and a thick snow has shown a trend. However, as various capitals compete to enter the market, the problem of disorderly competition is also serious.
At present, it is still the period when the industry's development is just in its infancy, and various funds are influx.
Automatic power batteries have gradually entered a period of large-scale retirement from 2020, and capital has begun to accelerate the influx of power battery recycling industry, and the number of newly registered companies has grown rapidly. According to data, in 2021, my country's power battery recycling industry added 10,243 new companies, and increased by 229.5% year-on-year.
Among them, most of the surviving enterprises are small enterprises.
As of the end of July 2022, there were 7,646 power battery recycling companies in my country with registered capital of less than 5 million, accounting for more than half of the country.
The industry as a whole shows a "small, scattered and chaotic" development status, which also leads to the industry facing severe disorderly competition. At the same time, many small enterprises engage in unfair competition at the cost of giving up environmental protection, resulting in a large number of retired batteries flowing to informal channels, which puts great pressure on the environment.
In contrast, there are already standardized supervision plans for power battery recycling overseas, and the rectification of industry chaos is also underway. The stones from other mountains can be used to attack jade.
EU has established a system for extension of the responsibility of power battery producers, clarifying the recycling obligations of each link.
According to EU Waste Framework Directive and other policies and regulations, manufacturers, sellers, recyclers and consumers in the battery industry chain are clearly required to bear corresponding recycling responsibilities and obligations.
In addition, in order to cope with the increasingly expanded retirement scale of power batteries, the EU recently passed a new battery bill, which has made a complete plan for the entire life cycle of power batteries, further clarified the recycling responsibilities and obligations of each link, and ensured the stability and controllability of the industrial chain.
The United States implements a car battery deposit system.
Compared with the EU's legislative management, the United States chooses to adopt market regulation to restrict it. The American Battery Association has established a deposit system, which stipulates that consumers must pay a battery deposit when purchasing car batteries, so as to encourage consumers to actively submit waste battery products in the future.
Finally, the government has established an economic cooperation relationship between waste battery recycling companies and battery manufacturing companies, and guided battery manufacturers to fulfill their producer responsibilities through agreed prices to ensure that waste battery recycling companies make profits.
my country has initially completed the supervision of power batteries, and industry standards have achieved initial results.
As of the end of 2021, the national platform has collected more than 7 million new energy vehicles information, so that the source of power batteries can be checked and the whereabouts can be traced. In short, the government has given each power battery an "identity card" to achieve regulatory coverage of the entire life cycle of power battery.
Looking forward, with the completion of the power battery traceability management system coverage task, my country can build a standardized power battery recycling system to effectively curb the flow of used batteries to "informal channels", thereby fully improving the industry's competitive environment and giving qualified standardized and large-scale battery recycling companies sufficient development opportunities.
Written at the end
Power battery recycling is a good business, but power battery recycling is also a "difficult" business. Whether it is the difficulty in collecting channels in the power battery recycling process, the difficulty in handling waste batteries, or the difficulty in balancing cost and profit, it has brought considerable challenges to the development of power battery recycling companies.
In the long run, in addition to economic effects, power battery recycling is also a social and environmental protection problem that must be solved. It can be said that if the orderly recycling and harmless treatment of power batteries cannot be achieved, the sustainable development of the new energy vehicle industry is nonsense.
At present, recycling companies are facing multiple problems such as low profits, difficult technology, and narrow channels. However, it can be foreseeable that with the guidance of policies and the joint efforts of enterprises, the difficulties in the power battery recycling industry will eventually be overcome one by one, and the potential "gold mine" of power battery recycling will gradually reveal its value. @王时时
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