Driven by multiple factors such as the rapid development of new energy vehicles and the sharp rise in upstream raw material prices, the power Battery recycling industry has started to heat up this year. Capital, automobile companies, and battery manufacturers are gradually pouring into the Battery recycling track. The 100 billion market is booming, and power Battery recycling will become a new blue ocean in the future.
20GWh retired batteries annually, with a highly imbalanced resource layout
According to relevant data, as of the end of June this year, the number of new energy vehicles in China has exceeded 10 million, reaching 10.01 million. Among them, the number of pure electric vehicles is 8.104 million, accounting for 80.93% of the total. In addition, the sales of new energy vehicles continue to show exponential growth. Many opinions in the industry believe that the sales of new energy passenger vehicles will exceed 6 million units this year. With the rapid growth and scale of new energy vehicles, the number of retired power batteries will also increase. In the next 3-5 years, the average annual retirement capacity of power batteries in China will reach 20-30GWh, and the cumulative retirement capacity will reach 142 GWh by 2026.
As is well known, the biggest difference between new energy vehicles and fuel vehicles lies in the existence of power batteries. And power batteries are made of many metal raw materials and chemicals, such as lithium, nickel, cobalt, manganese, etc. If power batteries are not properly recycled, scattered power batteries may cause pollution to the atmosphere, soil, rivers, and other environments. Therefore, at present, power Battery recycling has developmental significance. It is worth noting that, in the long run, the development of power Battery recycling also has important strategic significance.
The reason is that the comprehensive electrification of automobiles will bring about a significant consumption of mineral resources, including lithium, nickel, cobalt, and other resources. According to relevant statistics, at present, about 70% of global lithium reserves are distributed in Chile and Australia, 75% of nickel reserves are distributed in India, Pakistan, and Australia, and more than half of cobalt reserves are concentrated in Congo. Our website has compiled the development status of China's top five lithium mining companies. Although China is also developing related resources, it still highly relies on foreign countries.
According to predicted data, it is expected that China will achieve comprehensive electrification of passenger cars by 2040 and commercial vehicles by 2045. It is expected that the peak sales of new energy vehicles will be around 40 million units. This will also lead to a rapid increase in demand for lithium, nickel, and cobalt resources in power batteries. If no response measures are taken, the development of new energy vehicles in China will face the risk of lithium and cobalt resource shortages. In the middle and later periods, the risk reduction effect of improving the level of Battery recycling will be better, and improving the level of battery recycling is of great significance to China's resource risk.
In a market with a scale of 100 billion, many companies have flooded into the market
Either the price of upstream raw materials has continued to rise since last year, or the strategic significance of Battery recycling is highlighted. Since this year, automobile companies, battery manufacturers, and Battery recycling companies have taken frequent actions. Some of the top ten lithium-ion battery manufacturers have begun to actively deploy power Battery recycling. In April of this year, the business scope of BYD's wholly-owned subsidiary not only includes battery manufacturing and sales but also includes the recycling and cascade utilization of waste power batteries for new energy vehicles, as well as the research and development of new material technology.
In May, BMW Group announced that it would collaborate with Huayou Recycling in the field of new energy vehicles to create a cooperative model of closed-loop recycling and cascade utilization of power battery materials, achieving closed-loop recycling of domestic electric vehicle power battery raw materials. In addition to automotive companies, power battery manufacturers and recycling companies are also actively deploying. CATL entered the power Battery recycling track in 2015 and laid out the power Battery recycling field. In addition, CATL's battery replacement brand EVOGO released earlier this year will promote closed-loop recycling of power batteries.
Guoxuan High Tech is also one of the main players in the field of Battery recycling. At present, Guoxuan High Tech has deployed a lithium Battery recycling production line in Lujiang, Hefei, and a production base including upstream raw materials of power batteries and Battery recycling in Feidong, Hefei. At present, the field of power Battery recycling has attracted many companies to enter the market. According to incomplete statistics, as of August 2022, there are 59 existing and planned waste lithium-ion power Battery recycling and processing enterprises in China. The planned power battery processing and environmental impact assessment batch production can reach 1.93 million tons, and the enterprise plans to have a processing capacity of over 4 million tons.
The power Battery recycling industry is still in its infancy
Although the outlook points to a market of 100 billion yuan, many companies are vying to enter this market. Our website has compiled the top ten power battery companies in China and provided a detailed introduction to the development of the power battery industry. However, at present, power Battery recycling has not yet developed to a mature stage. It is understood that from 2018 to 2019, China's waste power batteries entered a period of rapid growth in scrap. In 2020, China's total retired power batteries will reach 25GWh (approximately 200000 tons), and it is expected to reach 116GWh (1 million tons) by 2025. Experts' analysis shows that although the recycling of power Battery recycling has developed for some time in China, the number of waste power batteries recycled through formal channels is still relatively low.
And it is concentrated in cities with strong promotion efforts for new energy vehicles such as Shenzhen, Hefei, and Beijing. At the same time, the current recycling of power batteries mainly comes from waste power batteries generated during research and development testing and manufacturing processes, while there are very few retired batteries that are truly recycled from new energy vehicles. The reason is that the current situation has something to do with the difficulty of power Battery recycling. Relevant data show that at present, Chinese new energy vehicle manufacturers have set up more than 13000 power Battery recycling service outlets in 31 provinces (cities), which mainly rely on the existence of 4S stores.
Industry analysts believe that these car companies may have a relatively complete recycling path, but currently, most of them only focus on the concept of recycling. In addition to the difficulty of recycling and dismantling, the recycling industry also faces problems such as difficulty in echeloning, efficient resource recycling, and safety and environmental management. The whole life cycle value chain of power battery regeneration is not built by Battery recycling companies alone but should be developed by the cooperative symbiotic ecosystem formed upstream and downstream of the industrial chain.
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