Power battery recycling: a super outlet of hundreds of billions

Power battery recycling has entered the eve of rapid development.

On December 20, 2021, the "2021 China Power Battery Recycling Industry Technology and Market Annual Conference" was successfully held. Leaders, university scholars, executives of listed companies, and industry experts attended the conference.

The conference focused on the topics of "Development Trend and Countermeasures of Waste Power Battery Recycling" and "Analysis of the Direction of Power Battery Comprehensive Utilization Industry". With this as a sign, China's power battery recycling industry may enter a new normal.

01 The amount is right in front of you

2015 was the first year of the explosion of production and sales of new energy vehicles in my country. The output of that year was 401,300 units, a year-on-year increase of 291%. The sales volume was 331,100 units, a year-on-year increase of 342.9%. The year-on-year growth rate of production and sales was significantly higher than the previous level.

By November 2021, the annual cumulative output of new energy vehicles in my country has reached 3.193 million units, and the cumulative sales volume has reached 2.9895 million units. The production and sales level of new energy vehicles has continued to rise after 2015.

The high increase in production and sales of new energy vehicles has driven the increase in the loading of power batteries, and power batteries will face a larger scale of retirement in the future. The lifespan of new energy passenger vehicles is about 4-6 years. Based on this standard, 2021 is the first year for the large-scale retirement of power batteries, and the scale is expected to reach 252,000 tons.

According to the requirements of the "New Energy Vehicle Industry Development Plan (2021-2035)", the proportion of new energy sales in my country will reach 20% of car sales in 2025, but as of November 2021, the proportion of new energy vehicles has reached 20%. Around 17.8% of all car sales, well ahead of expectations. Therefore, it is completely possible to increase the proportion of new energy vehicle sales in 2025. If it is assumed that my country's new energy vehicle sales in 2025 can reach 35% of the country's total vehicle sales, the corresponding new energy vehicle sales in 2025 will be 9.16 million. The installed capacity of power batteries will reach more than 3 million tons, and the CAGR will be about 28.3% in 9 years.

According to the data of China Research Network, the current recovery rates of metallic cobalt and lithium carbonate can reach 95% and 85%, respectively. With the advancement of technology, it is expected that the recovery rate will be 95% in the future, removing the impact of the cascade utilization of lithium iron phosphate batteries. It is estimated that by 2030 , the total mass of recyclable iron phosphate, lithium carbonate, nickel sulfate, cobalt sulfate and manganese sulfate in the whole industry will reach 1.039 million tons, 193,000 tons, 699,000 tons, 290,000 tons and 154,000 tons respectively. At that time, my country's power battery recycling The total scale of the industry will reach more than 100 billion yuan.

On the other hand, the current prices of lithium, cobalt, nickel and other lithium battery metals have achieved a substantial increase, and the supply pattern will still be tight in the future. Under this background, the profit space of the power battery recycling industry is likely to be further opened.

02 The head benefits more

Under the expectation that the scale of new energy power battery retirement will continue to grow, many companies have poured into the battery recycling industry one after another.

However, among the above-mentioned registered enterprises, most of them belong to small and medium-sized enterprises, of which enterprises with a registered capital of less than 1 million account for about 25%, and enterprises with a registered capital of between 1 million and 5 million account for about 35%. On the other hand, according to the Industry Standard Conditions for Comprehensive Utilization of Waste Power Batteries for New Energy Vehicles issued by my country's Ministry of Industry and Information Technology, there are currently only 27 companies that meet my country's battery recycling industry standards.

On the whole, there are many small and medium competitors in the battery recycling industry at present, and the supply level of the industry is relatively limited, and the leading companies will benefit more in the future.

GEM is the absolute leader in domestic battery recycling. The company started the waste battery recycling business in 2003. It took 17 years to invest in the construction of waste batteries and rare metal wastes such as cobalt, nickel, tungsten, germanium, and indium. Powder manufacturing base, China's core lithium-ion power battery cobalt-nickel raw material manufacturing base. At the same time, GEM independently developed and conquered the key technologies of complete resource utilization and recycling of small batteries and rechargeable batteries and ternary power materials, and realized the economical, large-scale recycling and processing of batteries.

At present, the total dismantling and processing capacity of GEM is designed to be 450,000 sets/year, and the resource utilization capacity is 190,000 tons/year. In the first half of 2021, the company's power battery recycling business grew rapidly, achieving an operating income of 54.737 million yuan, a year-on-year increase of 75.90%.

According to the current plan, by 2025, GEM's total power battery recycling volume will exceed 250,000 tons, and it plans to cooperate with global upstream and downstream companies to build power battery recycling bases in Indonesia and Europe.

As a leading enterprise of domestic new energy OEMs, BYD has started its layout in power battery recycling very early. In January 2018, BYD reached a strategic cooperation with China Tower Corporation, a major domestic power battery recycling company.

The company adopts a comprehensive three-step strategy of refined dismantling, material recycling, and activation and regeneration. At present, BYD has set up more than 40 power battery recycling outlets across the country. After the recycling center is completed, it will adopt a centralized recycling model.

Jintaige and Tianqi Lizhi, subsidiaries of Tianqi Co., Ltd., focus on the recycling and utilization of waste lithium batteries. In 2020, Jintaige recycled about 10,000 tons of used batteries (including powder), about 1,400 tons of cobalt, about 592 tons of nickel, and about 403 tons of manganese. The latest news shows that Tianqi Co., Ltd. has achieved 100% control of Jintaige and Tianqi Lizhi in 2021. The two core companies are highly coordinated in their daily operations and business development.

On September 10, 2021, Tianqi Co., Ltd. announced that it signed a "Cooperation Framework Agreement" with FAW Assets, a wholly-owned subsidiary of FAW Group. This time, the first power battery recycling base will be established in Changchun to carry out power battery recycling business, and a number of resource recycling bases will be established successively in areas where FAW Group's main customers are concentrated and in key cities.

In 2015, CATL acquired Bangpu Cycle to produce ternary cathode precursors by recycling metal elements in used batteries. At present, Bangpu has formed three major industrial sectors of "battery cycle, carrier cycle and cycle service", specializing in the recycling and processing of digital batteries and power batteries, and the utilization of gradient energy storage. The latest data shows that Bangpu processes more than 6,000 tons of used batteries and produces 4,500 tons of nickel-cobalt-manganese hydroxide annually, with a total yield of over 98.58%. The scale of recycling and resource recycling has jumped to the top in Asia.

If the retired battery is not recycled, it will cause serious environmental problems, which also forces the country or related companies to pay attention to battery recycling. In recent years, my country has frequently introduced relevant policies to help power battery recycling, and the entire industry has entered the eve of rapid development.