New energy vehicle battery recycling "crisis" and "machine" coexist, how can the industry get out of the "big weak and small" dilemma?

Shi Qingchuan, a reporter from China Economic Weekly, | Reported by the two sessions of the National People's Congress

Recently, the highest quotation of lithium carbonate has exceeded 500,000 yuan / ton, and the price of some Tesla models has also risen by 10,000 yuan / car. Coupled with the soaring nickel prices in the past few days, the recovery of new energy vehicle battery materials such as lithium, nickel, cobalt and manganese has once again been widely concerned.

At the two sessions of the National People's Congress this year, Tu Jianhua, member of the National Committee of the Chinese People's Political Consultative Conference and chairman of Loncin Holdings, paid attention to the problem of automobile scrap recycling and new energy vehicle battery recycling. Tu Jianhua told the "China Economic Weekly" reporter that he greatly appreciated the great development of China's new energy automobile industry. However, the development of the industry will also bring new problems, mainly where to go for the decommissioned power batteries.

New energy vehicle battery recycling "big weak and small"

According to the data of the China Automobile Association, in 2021, the production and sales of domestic new energy vehicles exceeded 3.5 million units, reaching 3.545 million and 3.521 million units respectively, an increase of nearly 1.6 times year-on-year, and the cumulative ownership of new energy vehicles exceeded 7.84 million, and the installed capacity exceeded 428GWh, ranking first in the world for seven consecutive years.

In Tu Jianhua's view, behind this is the pressure of recycling. "According to my understanding, half of the waste batteries flow into unqualified informal channels, and the battery dismantling and recycling process is difficult to achieve safety and environmental protection, and the secondary pollution situation is serious." And most of the recyclable power batteries come from the batch operation of vehicles decommissioned, while the amount of family new energy vehicle power batteries decommissioned is less, the current recycling outlets are scattered, the amount of recycling is small, it is difficult to form a scale, resulting in high cost of recycling single-vehicle waste batteries. In recent years, the number of private new energy vehicle registrations has increased sharply, and the types are diverse, the quality is uneven, the residual value is different, and the recycling and disposal system is facing a real test. Tu Jianhua said.

But under the pressure of recycling, there are still opportunities buried. With the surge in production and sales of new energy vehicles, the price of lithium, cobalt, nickel, manganese and other battery raw materials and metals has also risen, and the materials that can be recycled in scrapped new energy vehicles are also a valuable mineral.

According to the forecast of the China Automobile Association, the total sales volume of automobiles in 2025 is expected to reach 35 million units, according to the 20% market penetration rate, the demand for new energy vehicles will reach 7 million units, and the demand for lithium, cobalt, nickel and manganese will reach 38,500 tons, 42,000 tons, 126,000 tons and 42,000 tons respectively. According to the calculation of global new energy vehicle sales, the global cumulative decommissioned power battery in 2025 is 2.81 million tons (about 327GWh), and in 2025, through the recycling of global power batteries, renewable lithium, cobalt, nickel, and manganese resources account for about 28%, 28%, 23%, and 42% of the demand for that year, respectively; in 2030, the global cumulative decommissioned power battery is 20.29 million tons (about 2123GWh), and in 2030, through the recovery of global power batteries, renewable lithium, cobalt, nickel, Manganese resources accounted for about 107%, 107%, 89% and 161% of the demand in the current year, respectively. Battery recycling of new energy vehicles has been judged by the industry as a huge potential market in the future.

But so far, there are no absolute leading enterprises in this field, and the enterprises with a large market share are the Bangpu cycle under the Ningde era. But in the territory of the Ningde era, the Bangpu cycle is not a piece of the puzzle that relies on the sales market for profit.

Tu Jianhua believes that this problem is related to the scrap recycling of fuel vehicles. "For example, the scrap recycling of fuel vehicles, the biggest pain point is 'big weak and small'. Because the large, formal operation of enterprises in the industry is not only small, but also the general environmental protection costs are high, the profits are meager, many of them rely on state subsidies in profits, the quality of development is low, it is difficult to form a virtuous circle. In the end, large companies can't afford better recycling equipment, and the profitability of the recycling business drops again and again. Tu Jianhua said.

A scrap car recycling practitioner who did not want to be named also told the "China Economic Weekly" reporter: "Driving to my side of the waste collection station gives you 1,000 yuan -3,000 yuan, you take the formal scrapping process, and one gives you 200 yuan-500 yuan is good." ”

A large number of high-residue value vehicles are difficult to enter the formal scrap channel, low-residue vehicles are discarded at will, the difficulty of recycling increases, resulting in waste of resources and environmental pollution Problems have a more far-reaching impact.

How can battery recycling not take the old road of fuel vehicle scrap recycling?

Does the battery recycling of new energy vehicles have to take the old road of fuel vehicle scrap recycling? Tu Jianhua believes that there is a way to avoid it now. He suggested that from the government level, first of all, to increase the cost of violations of laws and regulations for enterprises without recycling qualifications, so that compliant enterprises have enough market and profit margins; secondly, we must divide responsibilities, explore the division of responsibilities of recycling entities, and determine the responsibilities of battery industry chain enterprises in different links.

At the same time, enterprises should also explore new models. For example, Tu Jianhua said that when recycling batteries, reverse logistics methods are used, according to the hierarchical recycling and professional treatment of automobile enterprises in the 4S stores of the whole service station, the implementation of power battery traceability management; for other types, increase regional waste battery recycling centers, establish transit sorting stations between decentralized recycling outlets and comprehensive utilization enterprises, and set up simple sorting, packaging and transit centers within a certain range to facilitate the comprehensive utilization of enterprises to purchase specific types of waste batteries, reduce costs, and improve the added value of recyclers.

According to Tu Jianhua's suggestion, large enterprises and industry leaders should accelerate their own changes, increase production capacity through information means, and improve recycling technology by increasing technology research and development. However, this practice will increase the investment of enterprises in equipment, process transformation, etc., which will have an impact on corporate profits in the short term. Therefore, Tu Jianhua also suggested that tax incentives should be given in the early stage of cultivating leading enterprises. For example, after the implementation of the new vat policy for the industry, study the collection method that can actually deduct the cost of the recovery enterprise. Because of the tax burden of formal recycling enterprises in the industrial chain, more supporting facilities are needed to reduce the negative impact of difficulty in obtaining input invoices on industrial chain enterprises.

Loncin Holdings quietly sold battery recycling

In the face of the promising future market, is Loncin Holdings also selling? Among the four major business segments introduced on the official website of Loncin Holdings, the third is environmental protection and renewable resource utilization. Loncin Holdings is mainly involved in environmental protection and renewable resource utilization industry enterprises for Qihe Environmental Protection. As of June 2021, according to the announcement of Qihe Environmental Protection, the largest shareholder accounts for 60.95% of the actual controller is Tu Jianhua's Yushang Investment Group (Hong Kong) Co., Ltd.

The information on the involvement in the battery recycling business was also confirmed by Tu Jianhua. He told the "China Economic Weekly" reporter that in May last year, Shunerz Group, a subsidiary of Loncin Holdings, has cooperated with Hongqiao Group, the largest electrolytic aluminum production enterprise in China, and jointly promoted the Sino-German Hongshun Recycling Technology Project in Zouping Economic and Technological Development Zone, Binzhou City, Shandong Province. The total investment of the project is 1.5 billion yuan, including scrap car recycling, aluminum recycling, power battery recycling and supporting industrial chain. The overall plan is to recycle 500,000 tons of aluminum production capacity, dismantle 100,000 scrapped motor vehicles every year, and launch a lithium battery recycling project for 50,000 electric vehicles.

The reporter also found that in November last year, shunzi group in attendance at the fourth session of the Expo, once again announced and parent company Qihe environmental protection group joint investment, in Zhejiang new scrap car resource and power lithium battery comprehensive utilization project, including 50,000 scrap cars resource treatment, 6,000 tons of power lithium battery cascade utilization, 4,000 tons of power lithium battery recycling, a total investment of 243 million yuan, a total area of 100 acres. Tu Jianhua said the project will reduce carbon emissions by 120,000 tons per year.

Editor-in-charge: Lu Jiangtao