Image source @ Visual China
Wen 丨 City Boundary, Author 丨 Lin Xiahuai, Editor 丨 Li Yue
Decommissioned new energy vehicle power batteries are becoming the object of contention.
According to CCTV Finance reported on February 22, since the first half of last year, the price of a single battery recycling has generally risen from more than 20,000 yuan to more than 30,000 yuan, an increase of nearly 50%.
Behind this is the soaring price of lithium battery materials. In January 2021, the price of battery-grade lithium carbonate per ton is still about 50,000 yuan, and it has now exceeded 470,000 yuan / ton.
Such a rally has exceeded the expectations of many people, hoarding goods and waiting for prices to sell, becoming a part of the market participants to make money, but behind the "one price a day", in addition to a wide range of price increases, there are also local prices that have fluctuated sharply.
The person in charge of a battery recycling company in Fujian told the city that the price fluctuations in the recent period are particularly obvious, and the same batch of goods may be priced at 13,000 yuan / ton the day before, and 6700 yuan / ton the next day.
In his view, recycling the battery at this time has become a "very gambling" thing, and he may also wait and see for a while.
Behind the ever-changing market prices, including battery manufacturers, battery suppliers, automobile manufacturers, professional recycling companies and other roles, are trying to seize the opportunity in the early stage of the battery retirement tide.
01, a big business worth 100 billion
In 2015, the first outbreak of new energy vehicles in the mainland - data from the China Automobile Association showed that 340,000 new energy vehicles were produced and 330,000 were sold that year, an increase of 3.3 times and 3.4 times year-on-year, far exceeding expectations.
Since then, the high growth momentum of new energy vehicles has continued.
According to the Data Association of China Automobile Manufacturers, by 2021, the production and sales of new energy vehicles in the mainland will be 3.545 million and 3.521 million units respectively, which is more than 10 times that of 2015, and for every 100 cars sold in China, 13.4 will be new energy vehicles.
At the same time as the era of new energy vehicles comes, where to go for a large number of batteries that are "decommissioned" from cars has also become a problem related to environmental protection and interests.
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Li Yuke, a senior engineer at the China Automotive Technology and Research Center, mentioned in a research report on power battery recycling that the life of new energy passenger cars is 4-6 years.
Assuming that the decommissioning period of continental power batteries is 5 years, there will be 252,000 tons of power batteries decommissioned in 2021, which will grow to 2.373 million tons by 2030, corresponding to a market space of 107.43 billion yuan - this is a huge cake.
But another more pressing issue is that a decommissioned battery of this scale, if it does not enter the circulation system of formal enterprises, may have a more negative impact on the already controversial topic of "electric vehicles are more environmentally friendly".
Cobalt, nickel, manganese and other elements in power batteries, as well as electrolytes, or toxic substances, may cause pollution to the environment such as soil and water sources because they have not carried out the necessary special treatment.
Of course, leaving aside the mission of environmental protection, battery recycling has actually become a profitable thing.
Research reports show that nickel-metal hydride batteries contain 35% nickel, 4% cobalt, 1% manganese and 8% rare earth elements; lithium iron phosphate batteries contain 1% lithium, and ternary batteries contain 12% nickel, 5% cobalt, 7% manganese and 1% lithium.
The prices of metallic materials in these batteries have mostly risen significantly since 2021, with battery-grade lithium carbonate and electrolytic cobalt being the most important.
Why is battery-grade lithium carbonate so important? Let's start with a simple science popularization. Lithium carbonate is divided into industrial grade lithium carbonate (lithium carbonate content 98%-99%) and battery grade lithium carbonate (lithium carbonate content ≥ 99.5%). Industrial-grade lithium carbonate is mainly used in traditional ceramics, glass and other industries. Battery-grade lithium carbonate is the key raw material for the production of lithium-ion battery cathode materials, such as lithium cobalt oxide batteries, lithium iron phosphate batteries and ternary batteries, which are synthesized based on battery-grade lithium carbonate.
Wind data shows that the price of battery-grade lithium carbonate has risen from nearly 50,000 yuan / ton at the beginning of 2021 to 460,000 yuan / ton on February 24, 2022, and the price of electrolytic cobalt has increased from 270,000 yuan / ton to 552,500 yuan / ton.
Behind the soaring price is the contradiction between the huge demand caused by the rapid development of new energy vehicles and the non-renewable nature of various metal resources.
Along with the rise in raw material prices, the price of decommissioned batteries has also risen, especially in ternary batteries containing a variety of metals. Industry insiders said that cobalt is currently the highest market price element, and ternary batteries containing cobalt are also the highest-priced batteries at present.
So, where will such a "valuable" battery go after being decommissioned?
At present, the decommissioned electric vehicle batteries on the market mainly have two flows: "cascade utilization" and "dismantling and recycling".
Ladder utilization refers to the battery power dropped below 80% but still higher than 60%, although it can not meet the needs of electric vehicles, but also after the detection, reprocessing and other procedures, it can be used for some equipment with low power requirements, such as "old man music", base stations, power generation system storage devices and so on.
Dismantling and recycling refers to a process in which raw materials are separated, purified and reused through technical paths such as wet or dry when the power is below 60%. The product of this link is the direct raw material used to produce the battery, including lithium, cobalt, nickel and other metal salts and oxides.
Whether from an environmental or interest point of view, battery recycling has become a worthwhile thing to do.
02, ten years of gradual change
In the past few years of retirement, the battery recycling industry is undergoing a full range of changes, and the sudden increase in participants on the track is the most intuitive performance.
According to Tianyancha data, in 2011, the year the first batch of electric vehicles were put on the market, the number of enterprise registrations related to battery recycling exceeded 200 for the first time, and in 2017, it exceeded 1,000 for the first time.
After the specific regulations were gradually introduced in 2021, the number of registrations directly increased from 3413 in the previous year to 24,000, truly interpreting the word "outbreak".
Shi Chen, who also chose to enter the industry in this year, told the city that the reason for choosing this time point is mainly because the first batch of electric vehicle batteries in the entire market are entering the retirement period, and the supporting industries related to power batteries in the city are gradually landing, and there are more opportunities.
There are not many cities like this across the country. For example, in Xiamen, in recent years, there have been new production lines of battery manufacturers such as Ningde Times, Haichen New Energy, AVIC Lithium Battery and Xiamen Tungsten Industry that have begun to lay out or have landed, which can form a closed loop with the local battery recycling industry.
At the same time as there are more and more entrants, the game between the "small workshop" and the "regular army", the latter also began to gain the upper hand.
According to the previous media reports, there are many small workshops in the market that do not carry out power testing, environmental protection treatment and other operations like regular enterprises after getting scrapped batteries, saving costs and allowing higher recycling prices to the market, but may bring harm to the environment.
In 2018, the Ministry of Industry and Information Technology released the list of the first batch of enterprises that meet the conditions of the comprehensive utilization of new energy vehicle waste power batteries industry specifications, and five enterprises, Huayou Cobalt New Materials, Haopeng Technology, Grimme, Bangpu Cycle, and Guanghua Technology, stood in the spotlight.
However, according to public data, 74,000 tons of batteries were decommissioned in 2018, and only 0.5 million tons were recycled by the five whitelist companies that year. This means that more than 90% of the decommissioned batteries have flowed to channels outside the regular army.
On December 16, 2020, the Ministry of Industry and Information Technology announced the second batch of 22 shortlisted enterprises, including 13 companies that applied for cascade utilization, 8 that recycled, and 1 that involved both types. Compared with the previous 5, there are obviously more choices up and down the industrial chain.
While giving the "regular army" a proper name, the punishment for the illegal recycling and disposal of waste batteries in small workshops is also severe.
On September 1, 2020, the newly promulgated Solid Waste Law of the state came into effect, which clearly identified the behavior of private recycling, hoarding, and reselling of waste batteries as illegal acts.
The new Solid Waste Law stipulates that it is illegal to illegally recycle and illegally dispose of hazardous waste in excess of 3 tons. Taking the BYD E6 with an endurance of about 400 kilometers as an example, the weight of a battery pack is more than 600kg, and 5 may meet the standard of sentencing.
In addition, the exploration of several years has also formed some models for reference in the industry on the scene problem of ladder utilization.
Zheng Chun, an industry insider, told the city that in 2016, his company had planned to cooperate with China Tower to carry out cascade utilization projects, when the market lacked experience in this area and was in a tentative stage.
5 years have passed, as of now, China Tower Group has become the largest export of power battery recycling in the country - it has more than 2 million base stations in the country, corresponding to a total of more than 40GWh, while the cumulative decommissioning of power batteries in 2020 is only 13.79GWh, the former can fully digest the latter.
Founded in July 2014, China Tower was jointly funded by China Mobile, China Unicom and China Telecom, formerly known as China Communication Facilities Service Co., Ltd., and later renamed China Tower Co., Ltd.
The number of entrants is gradually increasing, the regulations are gradually improving, the direction is gradually clear, and the power battery recycling industry seems to be experiencing a process of "seeing the clouds and seeing the fog", but there is still a distance from the day when the real sunshine is released.
Industry insiders told the market that under ideal circumstances, decommissioned batteries need to be used in a ladder first, and then dismantled and recycled, but now the price of raw materials has risen sharply, as a middleman holding decommissioned batteries in their hands, the benefits obtained from selling batteries to China Towers are far less than the benefits obtained from selling them to recycling companies such as Grimme.
The reason is that the former has a public recycling price standard, and public information shows that this price standard in 2019 is 0.68 yuan / wh. The latter floats with the daily fluctuation of raw material prices, especially ternary batteries, because of the high value of cobalt metal, will be hoarded when the market rises, waiting for a better time to seek higher interests.
For businessmen, the highest price can maximize the benefits, but for the entire battery recycling system, this is not the currently advocated benefit maximization model.
In addition, from a technical point of view, CATL told the city that the larger impact on battery recycling at this stage is the problem of scale - the current power battery is still a non-standardized product, the cost of recycling and dismantling is large, and it is difficult to realize the mechanization of the whole process. If the power exchange model is promoted, it will make the battery a standardized product, which is conducive to the subsequent recycling business.
03, the flock of deer
In this special industry "chaotic period", a variety of roles, including power battery manufacturers, battery raw material suppliers, automobile manufacturers and third-party professional recycling companies, have been laid out with unique advantages.
As a representative enterprise among battery manufacturers, CATL told the city that its main advantages come from three aspects: technology, scale and recycling system construction.
In simple terms, its technology is compatible with the treatment of various types of power batteries, through the "reverse product positioning design" to recover nickel, cobalt, manganese, lithium and other metals in the battery, the core metal recovery rate reached more than 99.3%; its Bangpu cycle is the largest domestic waste lithium battery resource recycling enterprise, with scale advantages; the recovered precious metals have direct input channels, do not worry about sales.
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At a time when raw material prices are soaring, obtaining continuous raw materials and reducing procurement costs is undoubtedly a more direct driving force for battery manufacturers to assume social responsibility.
The battery raw material supplier represented by Zhongwei Co., Ltd. and Xiamen Tungsten Industry, because it is itself the production of battery raw materials, one of its main products is the "ternary precursor", which is a nickel-cobalt-manganese hydroxide for the production of ternary batteries. This leads to a certain homology between its production technology and the technology required for battery recycling.
At the same time, similar to battery manufacturers, the availability of raw materials and the reduction of costs are also the most important reasons for such companies to enter the battery recycling industry.
At the end of the battery industry chain, car manufacturers represented by Tesla and BYD are also actively laying out the battery recycling industry.
Tesla has said that the Texas and Berlin factories it is building will produce its own batteries, and will also tailor battery recycling systems for different factories, with the ultimate goal of developing battery recycling solutions with high recycling rates, low costs and low environmental impact.
Tesla's "2020 Impact Report" shows that 92% of the materials in the power batteries it produces can be recycled. In 2020, Tesla has recovered 1,300 tons of nickel, 300 tons of copper and 80 tons of cobalt.
It is worth noting that different from the two sets of schemes currently advocated in China, "cascade utilization" and "dismantling and recycling", Tesla's battery recycling system is only dismantled, recycled and reused.
The reason is that as early as 2016, its chief technology officer said that Tesla has carefully studied the cascade utilization of decommissioned electric vehicle batteries in grid energy storage, but the research conclusions are not optimistic, and the use of cascade utilization to deal with these decommissioned batteries is not necessarily an economical way.
At the same time, Tesla's own gigafactory has a large-scale battery recycling capacity, if the decommissioned battery enters the cascade utilization channel, it may not only waste the existing battery recycling capacity, but also may lead to its future restrictions on battery raw materials.
Domestic BYD is also in the forefront of the power battery recycling business.
As one of the few enterprises in the new energy vehicle industry chain that almost covers the production of complete vehicles, it not only has the research and development and production capacity of key parts including power batteries and automotive chips, but also has a layout for lithium mines in the upstream.
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As for the battery recycling business, BYD has established its own battery recycling system as early as 2018, transporting the batteries that can be used in cascades to the Chinese tower, and recycling the batteries that have no use value through wet methods, and there is a relatively complete recycling system.
In addition to battery-related industrial chain enterprises, third-party professional recycling companies represented by Grammy also have their own advantages in the layout of this blue ocean industry.
Listed in 2010, Grimme, with waste batteries and power batteries recycling and reuse as the main industry, has been in about 20 years to overcome the waste battery recycling technology, scrap car overall resource recycling technology and power battery materials of the ternary "core" technology, currently in the echelon utilization and dismantling recycling field have a layout, the latter is the mainstay.
Its most obvious advantage is that as of the end of 2020, Grammy has signed agreements with more than 280 automobile factories and battery factories around the world to establish a targeted recycling partnership for waste batteries. The accumulation of such channels is the result of the inability of a single car manufacturer to achieve.
The direct effect is that the batteries of many new energy vehicles, after failure or scrapping, will enter the recycling system of Grammy through the 4S stores of various brands.
In addition to these large-scale entrants, Tianyancha data shows that at present, among the enterprises related to the battery recycling business, 46.5% of the registered capital is less than 2 million - a large number of small and medium-sized enterprises are also important participants in this industry.
Shi Chen, the head of a battery recycling company that began preparations last year and gradually started business at the beginning of this year, told the city that his company mainly cooperated with local scrap plants, bus groups, taxi companies, etc. to recycle decommissioned batteries, and then sold to different families according to the color of the batteries and market conditions, and flowed into the channels of cascade utilization or dismantling and recycling.
According to its description, the battery recovered from the taxi and bus, the remaining power is generally more than 80%, the recovery price of a group is five or six thousand, the sale price is about six or seven thousand, and a batch of goods is two or three hundred thousand profits.
While the giants are busy with the layout, the regulations are gradually improved, and the entire market is full of imagination for the future, there are also people like Shi Chen who exist as a resource integrator, who can connect the relevant parties in the industrial chain while making profits.
Some insiders believe that "the current power battery recycling industry, a bit like China in the reform and opening up period in the 1980s, has many opportunities, it is the stage of 'eight immortals crossing the sea and showing their magic', and it is indispensable to make quick money in it." ”
In the future, who can become the protagonist of this 100-billion-level market is still unknown. However, some analysts believe that the industry alliance model composed of batteries, automobiles, recycling plants and other enterprises may become a mainstream business model.
Note: At the request of the interviewees, Shi Chen and Zheng Chun are pseudonyms in the text.