There are more wild roads than regular troops.
For ten years, Zhang Chao has been committed to battery recycling. From the initial "light rod commander", a person calls different battery manufacturers and new energy companies every day to recycle batteries, because the amount is small and not valued, to today, has grown into the owner of a battery crushing factory in Shenzhen, recruiting dozens of workers.
In the past decade, China's economy has ushered in rapid development, and electronic products such as mobile phones, laptops, and electric vehicles have greatly changed people's lifestyles, among which the batteries that "deliver energy" to these products have also undergone upgrading.
From lead-acid batteries to lithium batteries, newer and more environmentally friendly and practical batteries are also being studied and introduced. Because of its small size, light weight, high energy density, long service life, safety and other advantages, lithium batteries have replaced lead-acid batteries in a large area to become the mainstream, and its widespread popularity has allowed entrepreneurs like Zhang Chao to see opportunities to dig gold in the field of battery recycling.
Many lithium batteries can be recycled. Since 2009, Zhang Chao began to enter the lithium battery recycling industry, when it was to recycle some of the lithium batteries in Nokia mobile phones, and then smart phones began to popularize, the amount of battery recycling also became larger, and then gradually recycled the power batteries used in electric trains and other means of transportation.
Since 2013, Tesla and other electric passenger cars have begun to enter The country, the promotion of new energy vehicles began to take shape, that year, the mainland new energy vehicles annual sales reached 18,000 units. The power battery has also developed rapidly, giving birth to the Ningde era, BYD and other power battery manufacturing giants, a large number of scrapped batteries have opened up a new business opportunity, power battery recycling, downstream followed by the growth of Grammy, Bangpu and other recycling leaders, but also supported a number of such "small workshops" as Zhang Chao's ambitions.
According to the East Asia Qianhai Securities Research Report, as of November 2021, the monthly loading level of power batteries in the mainland exceeded 20GWH, a record high. It is expected that the market penetration rate of new energy vehicles will reach 35% in 2025, and as the power battery approaches the end of its life, the total scale of power batteries that need to be scrapped in 2030 will reach 2.37 million tons (lithium iron phosphate 1.53 million tons, three yuan 840,000 tons), and the dismantling and recycling market space will reach 107.4 billion yuan.
The main business is cascade utilization, and Chen Li's start-up company's future plan is to expand in the direction of raw materials. "Power battery recycling is a big mine."
This field has a huge scale and profits, but at the same time, the decommissioned power batteries are more harmful, and their recycling is strictly controlled by the relevant departments. Professor Li Yan of the School of Environment, Chinese Min University, once pointed out, "If the power battery cannot be effectively recycled, it will cause great harm to the environment." Once the electrolyte leaks in lithium batteries, it will cause toxic and corrosive electrolyte to flow into the natural environment, and the carbon and graphite in the negative electrode material will cause dust and air pollution."
Under the coexistence of opportunities and crises, the current power battery recycling has not yet formed a perfect industrial chain, such as Zhang Chao's "small workshop" type of small and medium-sized recycling enterprises are full of the entire industry, they have no formal process, nor comply with the relevant requirements, let alone any technical content.
Non-formal recycling is even more than that of formal enterprises, which not only disrupts the market order, but also leaves hidden dangers of pollution. As the first batch of domestic electric vehicles gradually reached the service life, the recycling of decommissioned batteries has become a problem that cannot be ignored by automakers and battery manufacturers.
Bad money drives out good money
The latest data from the enterprise investigation shows that there are currently more than 35,000 "power battery recycling" related enterprises in the mainland. A large number of them are irregular troops like Zhang Chao.
Taking Zhang Chao's recycling factory as an example, he told Photon Planet that the recycling bidding of large battery factories such as Ningde Times and BYD has no bidding qualifications at all, and can only recycle waste batteries from small and medium-sized battery manufacturers.
"Now that I have money, I started renting my own factory buildings and recruiting workers to break and dismantle them." At first, Zhang Chao could only go with his friends to recycle batteries with repair shops and 4S stores, and then resold to large battery recycling companies at high prices as a middleman.
To recycle the power battery, Zhang Chao's factory uses a group of workers to hand crush it, and then sell the extracted raw materials to upstream battery manufacturers. And their manual crushing and dismantling battery technology does not have the technology to speak of.
After years of accumulation, Zhang Chao's factory has a variety of battery materials, lithium iron phosphate, pure manganese, pure cobalt, pure ternary. In 2017, the raw material market soared, and his factory hoarded a large number of pure cobalt raw materials, 40,000 to 51,000 tons were collected, and finally sold at a high price of 250,000, making tens of millions of dollars at a time that year.
In order to save costs, small workshops use original manual crushing, disassembling batteries, and then according to the specific conditions of the battery, the battery or simply processed into a new battery or extracted raw materials, or resold to the vehicle manufacturer or resold to the battery manufacturer.
Skip the problems of low recycling, pollution, etc., and the unqualified players will make a lot of money. They have left the entire industry in a chaotic state of affairs, with the "regular army" significantly less than the "irregular army".
The regular army refers to a professional enterprise with power battery recycling qualifications. Up to now, the relevant departments have issued a total of three batches of "new energy vehicle waste power battery comprehensive utilization industry specification conditions" enterprise white list, currently only 47 enterprises that have entered the white list meet the mainland battery recycling industry access standards, accounting for a very small proportion.
Among them, the third-party recycling enterprises represented by Hunan Bangpu, Grimme, Guanghua Technology, Haopeng Technology, etc. under the CATL era have a certain scale in the field of power battery recycling. However, because the industry has not overcome technical difficulties and unified management norms, the regular army and the irregular forces have been fighting for many years.
"If I had the bidding qualifications and could win the orders of these big factories, I would have been worth hundreds of millions of dollars." Zhang Chao said. However, there are requirements for battery recycling enterprises when bidding for large factories, for example, it is easy to catch fire when it is broken, and it needs a hazardous waste qualification certificate, and Zhang Chao's factory does not.
"It can only be recycled from small and medium-sized battery companies, they don't have so many requirements, as long as the price is high."
In contrast, most of the regular power battery recycling companies are very cold, and even raw materials are nowhere to be found. Because according to the dismantling requirements, in the equipment, environmental protection treatment, technology need to invest a large cost, the recovery price is naturally better than those "irregular army", bad money expulsion of good money phenomenon will follow.
This phenomenon also occurs in the entire industrial chain.
In the battery recycling industry chain, the upstream is all kinds of battery manufacturers, the middle reaches are third-party recycling enterprises, this link is also a small workshop and other informal military places, the downstream is battery reproduction and reuse enterprises, such as the echelon utilization in the field of energy storage.
A practitioner who makes the use of two-wheeled electric vehicle ladders told Photon Planet that at present, there are more traders without recycling technology in the middle reaches, who recover from battery manufacturers and large PACK factories, and then sell them to the next "third party" to act as a second-channel dealer to earn the difference.
Midstream third-party recycling companies grasp the recycling supply chain, and some downstream recycling companies that want to do technological innovation can only be forced to choose to recycle power batteries at higher prices.
Three years ago, Chen Li noticed the heat of power batteries, so he switched from furniture manufacturing to power battery cascade utilization. Because the recycled battery specifications are limited and the quantity is too small, no upstream manufacturer is willing to supply, and can only be ordered from a "third-party recycling agency".
But the price of this third party after many changes of hands is several times the price of a lot. They use their relationships and high prices to recycle batteries into their own hands, and then sell them to downstream battery reproduction and reuse companies at 2-3 times the price.
Those who have batteries only want to make traders earn multiple times the difference, and those who want to really invest in technology research and development of enterprises also have to spend multiple times the price to buy batteries to bring pressure to the original insufficient capital chain.
But what is more serious is that the downstream battery reproduction and reuse technology is not mature, and there is no unified management norms. "Even if some enterprises can produce high-quality products, without the recognition of the authorities of the relevant departments, they naturally cannot be recognized by the market." One practitioner said.
In order to get the battery he wants, Chen Li's company can only cooperate with local battery recycling re-sellers, but what makes him more uncomfortable is that many shoddy power battery reuse products disrupt the market order, "when good products and bad products are put on the market together, consumers can't distinguish, and can only give priority to low-priced ones."
Wasting resources or conserving resources?
As the "heart" of energy supply to new energy vehicles, the performance of the power battery will decay with the increase of the number of charges, according to national regulations, the service life is generally 5-8 years, and the power battery decommissioned from the electric vehicle usually has 60%-80% of the remaining capacity of the initial capacity, and can be recycled again.
At present, there are two feasible methods for the recycling of decommissioned batteries in the market: cascade utilization and dismantling and recycling.
Cascade utilization is to use the decommissioned power battery in other areas such as energy storage as a carrier of electric energy, so as to give full play to the surplus value; dismantling and recycling, that is, discharging and disassembling the decommissioned battery, refining raw materials, so as to achieve recycling.
Automotive power batteries mainly include lithium iron phosphate batteries and ternary lithium batteries. According to industry insiders, lithium iron phosphate batteries do not have more heavy metals such as ternary lithium batteries, direct disassembly does not necessarily have the benefit of resource scale, and entering the cascade utilization is an important direction; and the cathode material of ternary lithium batteries is rich in nickel, cobalt, manganese and other metal resources, and the direct disassembly and recovery benefits are higher.
With the outbreak of downstream automobile demand in the new energy industry, the cost of raw materials transmitted to the upstream has risen year by year. On the contrary, last year, because of the shortage of batteries, many car companies were affected, including Xiaopeng and Weilai, which may also have a certain relationship with the shortage of battery raw materials.
As of January 13, 2022, according to business agency data, the domestic battery-grade lithium carbonate quotation has reached a high of 360,000 per ton, while electrolytic nickel has also reached 167,700 yuan per ton, compared with the same period last year.
"The economic benefits of recycling (dismantling) are not good, the cost of refining is high, and the cost of primary ore is much higher than that of primary ore, but as the price of primary ore becomes higher and higher, the market will more and more turn to recycling resources." An industry insider said.
In addition to mineral deposit mining, the recovery of metal resources for power batteries will also be conducive to the supply of upstream raw materials.
An industry insider told Photon Planet that because of the high input cost of equipment and so on, only some large companies such as Grimme will do raw material refining. Therefore, the market is more of a ladder utilization of lithium iron phosphate batteries, but the cascade utilization effect is not optimistic.
"There are not many companies that can do a good job in cascade utilization, and the real sense of cascade utilization is still a blue ocean." Chen Li, the person in charge of the enterprise that made use of the ladder, believes.
According to a number of battery recycling companies contacted by Photon Planet, most of them are used in cascades.
"The investment threshold for cascade applications is low and the income is high, so it is overcrowded, and individuals and small workshops can do it." A ladder utilization practitioner told the photon planet.
On the idle fish platform, you can see a lot of lithium battery recycling businesses, many of them are personal recycling, do cascade utilization. One of the individual battery recyclers said that he recycled it to make solar lights, and did not need any technology, and he could start a business by himself.
Grimme is the absolute leader of domestic battery recycling, the main business is the recycling of waste cobalt-nickel-tungsten resources and electronic waste, the company has started the waste battery recycling business since 2003, and has grown into a listed enterprise in the field of battery recycling.
A person close to Grammy told photon planet that Grammy has two cascading production lines. There is an automatic line with an investment of more than 20 million yuan, mainly used to assemble products with 18650 battery cell specifications; the other line is a semi-manual assembly line, which can use a variety of batteries, mainly for batteries for two-wheel electric vehicle ladder applications.
According to this person, there is no more effective technology in the field of cascade utilization.
The development of cascade utilization technology is not mature, the country does not have a mandatory market supervision and management mechanism, and even the certification system is not perfect. The industry is fiercely competitive, and the quality of batteries made by various echelon utilization companies is uneven.
"Many of them do not guarantee the battery life after the use of the ladder." Chen Li said.
In his view, the industry is difficult to make a long-life ladder utilization battery. How to improve consistency is the most important issue in ladder utilization, which is directly related to the life and safety of the battery. The cell consistency lies in the cell matching link, that is, the combination of cells with similar capacity can increase the service life and safety of the battery.
A Grammy recycling person in charge told Photon Planet that the warranty of the battery pack after the cascade application is generally 1-2 years, and the consistency of the battery after the combination of the battery capacity cannot be guaranteed by Grammy's new energy department.
Decommissioned batteries can be used in cascading applications such as communication base stations, energy storage, low-speed vehicles, and street lights. Limited by factors such as safety and cost, the real application of a certain scale is the China Tower. The industry has not mature cascade utilization technology, resulting in many power batteries that can only be applied to small power batteries such as street lamps after recycling.
"If the production is short-lived batteries, from another point of view, the cascade application of batteries is a waste of resources rather than saving resources." Chen Li thinks so.
Confined to the non-uniformity of battery standards, the game of technical cost and recycling compensation, the economy of cascade utilization still needs to be considered.
Giants go off to nuggets
Taking 2018 as an example, the total amount of power batteries decommissioned in the mainland reached 74,000 tons, but the recovery of power batteries was only 5,472 tons, accounting for only 7.4% of the total amount of scrapped power batteries.
The reason why the recovery rate is so low is that battery recycling seems to have a lot of dividends, but it is very difficult to make a profit, and the biggest problem is that the technology is difficult to tackle. At the same time, the small workshop-style irregular army is rampant, the industry is in chaos, and a number of regular army forces are urgently needed to bring about change.
A number of people working in Tesla and Weilai told Photon Planet that in addition to the damage caused by traffic accidents and collisions, new batteries need to be replaced, and at present, these new domestic car companies have not yet had a large area of car owners' batteries decommissioned. Therefore, at present, more battery recycling resources are still flowing out from upstream manufacturers such as battery manufacturers and PACK manufacturers.
In 2018, the state introduced the "extended producer responsibility system for power battery recycling", coupled with the shortage of battery raw materials and many other factors, Volkswagen, BYD, Ningde times and other vehicle manufacturers and battery factories began to devote themselves to battery recycling, cooperating with third-party recycling agencies, multi-party alliance, through investment, self-built power battery recycling system and other ways to participate.
As early as 2015, CATL acquired a third-party recycling company, Guangdong Bangpu. At present, Bangpu has formed three major industrial sectors of "battery cycle, carrier cycle and cycle service", specializing in digital battery and power battery recycling and utilization, gradient energy storage and utilization.
On October 12 last year, CATL announced that it would invest 32 billion yuan in an industrial park project involving the recycling of waste battery materials, mainly to build a production base with waste battery material recycling, which is planned to be implemented by its subsidiary Guangdong Bangpu and its holding subsidiary Ningbo Bangpu.
ATD has set up more than 40 power battery recycling outlets across the country, taking three steps: fine disassembly, material recycling, and activation and comprehensive utilization. In addition, BYD has also reached a strategic cooperation with China Tower Company, a major power battery recycler, to jointly build a shared recycling network and realize the large-scale utilization of decommissioned batteries.
For battery manufacturers, cutting into the power battery recycling business is conducive to improving their bargaining power to upstream raw material enterprises and reducing the production cost of batteries.
At the same time, with the gradual popularization of new energy electric vehicles, the treatment of batteries is also affecting automakers.
Previously, it was reported that Tesla would launch a battery recycling service in China. A Tesla employee told Photon Planet that in foreign countries, Tesla has its own set of battery recycling systems, but the domestic power replacement peak has not yet arrived, and it is not clear how to do it.
However, many domestic new energy vehicle companies have entered the power exchange mode, so as to extend the battery life, reduce the cost of car purchase for consumers, and at the same time, they can also control the battery management in the hands of car companies and facilitate battery recycling.
On August 20, 2020, NIO officially released its battery rental service BaaS (Battery as a Service). Just two days before the BaaS model was launched , August 18, 2020 , Weineng Battery Asset Co., Ltd. was also formally established, initiated by Ningde Times and Weilai Automobile.
Although many battery manufacturers and OEMs have joined, as of now, the power battery data information sharing has not been opened, and the problems such as the measurement standard of the battery residual value are still not solved, which requires the joint efforts of upstream manufacturers to downstream recycling enterprises.
Like Zhang Chao's "small workshop" enterprises and traders, the main players of battery recycling have not yet formed a scale effect, some battery technology levels have not yet been perfected, and the recovery efficiency of resources still needs to be improved.
In the long run, under the squeeze of the gradually growing regular army, the traditional small workshops will inevitably be annexed or eliminated. But the current power battery recycling market is still in the dark hour before the dawn. Zhang Chao believes that his factory will definitely be squeezed in the future, but this chaos will continue for some time.