Metallurgy / Chemicals / Rubber & Plastics

Since the first large-scale use of electric buses in the Beijing Olympics in 2008, China's new energy vehicle industry has achieved rapid development, and the installed capacity of power batteries has continued to rise. The power battery recycling market will also grow rapidly with the increase in the number of new energy vehicles and the number of obsolete vehicles. As of 2020, China's total scrapped battery of pure electric (including plug-in) passenger vehicles and hybrid electric passenger vehicles has reached more than 200,000 tons. In the future, my country's power battery industry will usher in a period of rapid growth, but there are still many uncertain factors. Companies with a comprehensive recycling network, good upstream and downstream cooperation, environmental protection and safety standards, and strong financial strength will win the competition in the future.

Lithium iron phosphate and ternary batteries are suitable for different recycling modes

Under normal circumstances, when the capacity of the power battery drops to 80%, it will enter the decommissioning stage for cascade utilization. After the cascade utilization for a period of time and lose most of the energy storage function, it will finally be disassembled and recycled, or the decommissioned battery will skip the cascade utilization. The link is directly dismantled and recycled.

Recycling power batteries can first reduce the impact on the human body and the environment. Although lithium-ion batteries will not contain mercury, cadmium, lead and other toxic heavy metal elements, they will still cause environmental pollution and change the pH of the soil. If improperly handled, it may produce toxic gases, especially metals and metals in the battery. Electrolyte can cause direct harm to the human body. Secondly, high-priced elements such as cobalt, nickel, and lithium can be recovered from the battery. At present, 95% of China's cobalt resources rely on imports, and cobalt for batteries has accounted for 69%, and the import dependence of lithium and nickel is as high as 80%. As the most terminal and starting end of the power battery industry chain at the same time, battery recycling plays a key role in promoting the circular development of the industry.

After the power battery is recycled, in principle, the first priority is the cascade utilization, and it will continue to exert its energy storage value in other fields. However, due to the small size of the actual downstream market, and the large-scale obsolescence of power lithium batteries, there are also some technical problems, and the cascade utilization is mostly in the initial and pilot stages. The United States, Germany, and Japan started early in this field and have built a small number of commercial projects for the cascade utilization of power batteries. China has also achieved good research results in the field of cascade utilization and recycling of new energy vehicles, and has built some demonstration projects.

When the electrochemical performance of the battery drops to the standard that cannot meet the requirements of transportation or cascade utilization, the power battery enters the scrapping stage. Generally, it is concentrated recovery. The metal elements with useful value in the battery are extracted through physics, chemistry and other processes, and the recovered materials can finally be re-applied in the fields of lithium batteries or metallurgy.

At present, in battery recycling, the industry’s tendency is: lithium iron phosphate batteries are first cascaded and then regenerated, while ternary lithium batteries are directly regenerated. See Table 1 for the detailed classification of power lithium battery recycling processes.

The income from the recycling and dismantling of ternary lithium batteries has benefited from the high price of precious metals in recent years. Generally, ternary lithium battery recycling companies dismantle the precious metals and sell them to downstream companies in the form of sulfate, although the sales price is lower than the market price of pure metal. , But the benefits are still considerable. For lithium iron phosphate batteries, the only valuable element is lithium, but the cost of using wet dismantling and recycling of lithium iron phosphate batteries will be higher than the benefits of recycled materials, which is not economically suitable.

In terms of cycle life, the capacity decay rate of lithium iron phosphate batteries is much slower than that of ternary lithium batteries. When the number of cycles of the ternary lithium battery is about 2500, the battery capacity decays to 80%, and then the relative capacity shows a rapid decay trend as the number of cycles increases. However, the capacity of lithium iron phosphate batteries only slowly decays with the increase in the number of cycles. When the battery capacity decays to 80%, the lithium iron phosphate batteries retired from the car still have more cycle life. Compared with the ternary battery Higher cascade utilization value. In addition, the lithium iron phosphate battery products produced by various battery companies have smaller technical differences and higher stability, and are more suitable for applications in the fields of energy storage, power backup and low-speed power.

In passenger car power batteries, the proportion of lithium iron phosphate batteries has a certain upward trend, which will have a certain impact on the market scale of the battery recycling industry in the future.

Europe, America and Japan are still in their infancy

The global new energy vehicle industry is developing rapidly. In 2020, the global sales of new energy vehicles will be 3.095 million, a year-on-year increase of 40.2%. Among them, the sales of pure electric vehicles was 2.126 million units, a year-on-year increase of 29.6%. In 2014, the global lithium battery shipments were 72.3GWh. Driven by the new energy automobile industry, the global lithium battery shipments reached 259.4GWh in 2020, and the global lithium battery shipments from 2014 to 2020 have a compound annual growth rate of 23.7%.

In 2020, the global battery recycling market is about 2 billion U.S. dollars. The market is divided into two parts: cascade utilization and dismantling and recycling. The cascade utilization market accounts for about 35%, and the battery dismantling and recycling accounts for 65%, including lithium cobalt oxide batteries and ternary batteries. Batteries are the main source of disassembly and recycling. It is estimated that the global battery recycling market will reach 54 billion U.S. dollars in 2030, and the compound annual growth rate (CAGR) will reach 39% in 10 years.

As developed countries and regions such as Europe, the United States, and Japan started early in the recycling of lead-acid batteries, nickel-chromium batteries, etc., the established recycling system has achieved good results, forming a manufacturer with battery manufacturers assuming the main responsibility for battery recycling. Responsibility extension mechanism and supporting policy system are relatively complete. It can be seen from the development of its battery recycling industry that a sound legal system is an important prerequisite and guarantee for the realization of power battery recycling and recycling. These countries have established a relatively complete legal protection mechanism. The law stipulates the obligations and responsibilities of all entities during the entire life cycle of power batteries, as well as severe penalties for violations of related obligations and non-acceptance of related responsibilities. It can realize the current strong control of all links from production to scrapping of power batteries. However, many existing policies are aimed at other types of batteries, and the power battery recycling industry has its own characteristics. When the decommissioning of power batteries in developed countries and regions reaches a certain point, there must be corresponding big policy changes to adapt to the corresponding Market. This situation may not happen until a few years later.

The global power battery recycling industry has produced a recycling model for power battery manufacturers represented by Japan (including through electric car dealers and battery leasing companies). The battery manufacturers use sales channels to build "reverse logistics" recycling channels; The industry alliance recycling model represented by the region (through the establishment of recycling channels by power battery manufacturers to jointly build industry associations and alliances); and the third-party recycling model and other three types of models.

The United States, Europe and Japan all have huge auto markets. Although the penetration rate of electric vehicles in the United States is low, the rise is strong. In North America, manganese ore is scarce, with nickel ore accounting for 3.7% of the world’s total, lithium ore accounting for 6%, and cobalt accounting for 4% of the world’s total. On the whole, lithium batteries The reserves of basic metal raw materials account for a relatively low proportion. The penetration rate of new energy vehicles in Europe will increase rapidly in 2020, and major car companies have formulated plans to launch new energy vehicles. It is expected that the CAGR of new energy vehicle power batteries will reach 32% from 2021 to 2025. At the same time, there will be lithium mines, cobalt mines and manganese mines in Europe. All belong to scarce mineral deposits. The number of power batteries in these areas will grow rapidly in the short term, and the number of power batteries that are eliminated will also rise rapidly within 10 years. Japan and South Korea are big countries in the production of lithium batteries, and the elimination of lithium batteries is small, and they are not enough to form sufficient support for the lithium battery production industry now and in the future.

In any case, the power battery recycling industry in developed countries and regions such as the United States, the European Union, and Japan is still in the early stages of development. Various types of companies in the industry chain, such as car companies, battery companies, materials companies, and resource recycling companies, are actively deploying. Prepare to meet the peak of the first wave of decommissioning of power batteries.

Five obstacles to China's power battery recycling and storage

In 2015, China's electric vehicle industry surpassed the United States and the European Union with 331,000 sales. In 2016, China's new energy vehicle sales reached 507,000, a year-on-year increase of 53%, making it the world's largest new energy vehicle market. The 2017 Mid- and Long-Term Development Plan for the Automobile Industry mentioned that China's new energy vehicles will account for more than 20% of automobile production and sales by 2025, and the annual sales of new energy vehicles are expected to exceed 6 million. In 2018, 1.247 million new energy vehicles were sold in the whole year. The average annual growth rate of new energy vehicle sales in China from 2013 to 2018 reached 114%; the cumulative inventory was about 1.8 million vehicles, accounting for 50% of the global new energy vehicle market. %above. From 2019 to 2020, the new crown epidemic has inhibited the continuous growth of China's new energy vehicle market.

At present, China's lithium battery industry has surpassed Japan and South Korea to become the largest country in the world's lithium battery industry. The CAGR of China's lithium battery industry output value reached 55% in 2015-2018. In 2015, the Chinese government's power battery "whitelist" system greatly avoided the direct competition between domestic lithium-ion battery companies and foreign giants, and won a valuable period of development for lithium battery companies. From 2015 to 2019, the CAGR of China's power battery installed capacity exceeded 40%.

At present, the decommissioning volume of domestic power batteries is relatively small. The batteries used in the cascade are mainly lithium iron phosphate batteries, and the ternary material batteries are usually directly disassembled and recycled. The lithium battery recycling industry has attracted more and more attention. Companies in the industrial chain of raw materials, batteries, and new energy vehicles are actively deploying, and third-party resource recycling companies have also joined.

It is expected that the number of decommissioned power batteries will soon reach a level that cannot be ignored, and enterprises will gradually intensively invest in building factories and capital acquisitions in battery recycling and utilization. Due to the responsibility mechanism of power battery recycling, as well as the complexity and systemic nature of the technology and mode of battery recycling, strategic cooperation between the upstream and downstream of the industrial chain in this regard is an inevitable trend in the future.

1 Cascade utilization market

Due to the immaturity of technology, standards, and business models, the overall use of cascades is still at the stage of demonstration applications. China Tower is in a leading position in the domestic lithium battery cascade utilization industry. Since 2018, China Tower has begun to fully promote the cascade utilization of power batteries in 31 provinces and municipalities across the country. The use scenarios are mainly concentrated in base station backup power. And Zhongtianhong Lithium is the first in China to propose a "rental on behalf of sale" power battery cascade utilization operation model, and the layout of charging facilities and charging station construction and discharge services. Leading domestic electric vehicle companies are also actively carrying out commercial research on cascade utilization, using retired power batteries to explore large-scale cascade utilization products.

The share of electrochemical energy storage in the energy storage market is still quite low, roughly at 5%; in the context of the "dual carbon" development, the wind power and photovoltaic industries have created opportunities for energy storage. The cascade utilization market of retired power batteries is only 3.7 billion yuan in 2020, but it is expected to reach 20 billion yuan in 2030.

2 Power battery dismantling and recycling market

At present, the industrial dismantling and recycling of used power batteries are mainly concentrated in lithium cobalt oxide system batteries and NCM ternary system batteries. Resource recycling can recycle nickel, cobalt, manganese and lithium, and produce ternary cathode materials and precursors, which are directly reused in the manufacture of lithium battery cells. This has the significance of building a closed loop of the industrial chain: China's nickel and cobalt resources are relatively scarce, and nickel and cobalt are relatively scarce. The import dependence of mineral resources is higher than 80%, and the supply is restricted by the international market. Valuable metals extracted through the regeneration and utilization of power batteries will be an important supplement for Chinese battery material companies to obtain raw materials.

Ternary battery cathode materials mainly include NCM333, NCM523, NCM622 and NCM811. The technology is constantly changing, and the metal ratio is developing towards high nickel and cobalt-free. This trend of change will affect the proportion of metal recycling in ternary batteries in the future. In the lithium iron phosphate battery, only the lithium element has a large recycling value, and the economy of battery recycling is not high. It is expected that the profit of recycling lithium iron phosphate will be low for a long time in the future.

Generally, the service life of power batteries is about 5 years (3~5 years for commercial vehicles, 5~8 years for household vehicles). The first wave of domestic power batteries has been retired, and the power lithium batteries installed in 2014-2015 will be in 2020-2021. Dismantling/recycling began in the year. In 2020, the total recovery of various elements in China's power batteries is about 40,000 tons. In the future, as a large number of power batteries enter the obsolescence cycle, the recovery of elements from power batteries in China will show a rapid growth trend. From 2020 to 2030, the growth rate of the power battery dismantling and recycling market will reach an average annual rate of 31%.

3 Market status and business model

At present, the power battery recycling industry in overseas is still in its infancy, as is the situation in China. Although the number of domestic enterprises with the qualifications for power battery recycling, dismantling and recycling is increasing, the current benefits of battery cascade utilization and dismantling and recycling are not optimistic. There are five major obstacles to the development of the industry, namely, imperfect regulations and poor recycling networks. Soundness, asymmetry in related information, lack of mature business models, and related technologies are in urgent need of breakthroughs. At the same time, the market competition environment is also poor. For example, there are a large number of small enterprises or workshops in the recycling of decommissioned power batteries in China, with poor professional ability, small recycling scale, low technology level, low recycling efficiency, incomplete qualifications, high safety and environmental protection risks, and the norms of formal power battery recycling companies Investment in environmental protection is large, and there is no competitive advantage in cost.

According to the existing domestic business models and the nature of leading companies, the power battery recycling market in China has given birth to a power battery recycling model, a lithium battery material recycling model, and a cascade utilization model. Participants in the middle reaches of the industry chain include professional recycling companies, battery manufacturers and energy storage companies. Among them, professional recycling and processing companies focus on recycling, and energy storage companies and battery manufacturing companies focus on cascade utilization. There are many companies engaged in recycling, but fewer companies engaged in cascade utilization.

There are three major uncertainties in the future market

At present, the policy's supportive attitude to the industry is clear, and the trend will not change. However, specific incentives and management measures need to be refined. It is possible to start adjustments from accelerating technological development, supporting leading companies, implementing fiscal and tax policies, and raising barriers to entry.

In terms of technology trends, since cascade utilization is driven by data, it is necessary to break the data sharing problem first. In addition, recycling technologies such as non-destructive disassembly and reorganization, high-efficiency crushing, and direct extraction should also be developed.

At the same time, extensive cooperation and industrial integration among enterprises should also be realized. Elemental circulation will inevitably lead to the business model of ouroboros, and upstream and downstream cooperation in the battery industry chain is an inevitable trend in the future. Before the formation of the scale effect of recovery, group heating will become the mainstream mode explored by enterprises in the industry. After the formation of the industry closed loop in the future, the industry chain will be upstream and downstream of each other, and alliance cooperation will be significantly enhanced. Car companies, power battery companies, and recycling companies will reach strategic cooperation and use their respective advantages to cooperate to occupy the market. The relationship between large companies may become more subtle, with each other being customers, upstream and downstream, and competitors.

In the next 10 years, under the premise of rapid growth of the power battery market, the power battery recycling market will grow at a higher rate. However, uncertain factors in the power battery recycling market still exist:

1 technology

The development of power battery technology will likely increase the battery cycle life, which in turn will affect the time it takes to retire from the automotive market, which will have an adverse impact on the battery recycling market. The increase in the proportion of lithium iron phosphate batteries will also reduce the amount of valuable elements that can be recycled and reduce the enthusiasm of recycling companies. In the future iterative technology, solid-state batteries may have an impact on the battery recycling market.

In the far future,

Fuel cells will become a non-negligible automotive energy solution, but this time may be after 2035, and the impact on the power battery recycling market before 2030 will be limited. In view of the characteristics of fuel cells, it is difficult to miniaturize and increase capacity, so the first large-scale commercial use will be in large passenger cars and trucks. The impact of vehicle fuel cells on the lithium battery recycling market and the timing of the first wave of fuel cell retirement peaks are currently unpredictable.

2 policy

Policies are particularly important in promoting the battery recycling industry. A mature battery recycling industry must develop under the encouragement of reasonable policies. The formulation of policies must also accurately predict and promote the development model of the industry, otherwise the industry chain will always face the embarrassing situation of gray and indiscriminate.

3 Competition and business model

Competition and business models affect the profits of enterprises in the industry and thus affect the long-term development of the industry. If the number of companies and the overcapacity are severe, and the new business model is unable to create profit margins, the market will develop in an unfavorable direction.

In the future, power battery recycling companies that can stand out in a market with rapidly erupting demand and a more complete policy environment will have the following characteristics: complete recycling network, good upstream and downstream cooperation, environmental protection and safety standards, and strong financial strength. If the company deploys hazardous waste qualifications in advance, the odds of winning will be even better.