Text | Angel Lee
Edit | Su Jianxun
On the evening of April 25, the battery company Ewell Lithium Energy released its 2021 annual report. The company's revenue was about 16.9 billion yuan, an increase of 107.06% year-on-year, and the net profit was about 2.9 billion yuan, an increase of 75.89% year-on-year. Among them, the power battery revenue was 10 billion yuan, an increase of 146.25% year-on-year.
Although revenue and net profit have risen, the gross profit margin of Ewell Lithium Energy's batteries has declined, and the gross profit margin of lithium batteries in 2021 has fallen by 7.11 percentage points to 19.02%. At the same time, raw material costs increased by 145.8% year-on-year.
Some brokers said that due to the sharp rise in the price of raw materials upstream of the battery, the profitability of Ewell Lithium Energy was under pressure. This is not an isolated case, and the upward pressure of raw materials is being transmitted downwards.
At present, the battery-grade lithium carbonate (the core material of lithium iron phosphate batteries) is hovering below 500,000 yuan / ton, and more than 20 domestic car companies have increased prices, ranging from thousands of yuan to tens of thousands of yuan.
However, from mining to raw material smelting, to processing into battery packs, batteries require a certain production cycle. This has also led to a particularly frenzied battery-related industry in 2022.
In the case that guangdong open source has not alleviated the shortage of resources, battery recycling has become a business.
Zhao Weiduo, deputy general manager of Hunan Shunhua Lithium Industry Co., Ltd., told 36Kr that the waste batteries currently circulating on the market are mainly ternary batteries and lithium iron phosphate batteries. "Due to the nickel, cobalt, manganese, lithium and other metal elements contained in ternary waste batteries, the degree of market coaxing for ternary batteries is far beyond lithium iron phosphate."
It is understood that the recovery price of the two batteries is generally based on the price of metal elements of Shanghai nonferrous network as a reference benchmark, and is recycled according to a certain discount coefficient.
"At present, the price of ternary old batteries has been seriously inverted, the previous discount coefficient was 80%-90%, and the current discount coefficient is close to 140%; lithium iron phosphate waste batteries were even recycled free of charge at the beginning, but now the discount is also calculated by 6-7 discounts, spending money to buy." Zhao Weiduo said.
According to Zhao Weiduo, the price of lithium iron phosphate cathode waste powder at the beginning of last year was about 4,000 yuan / ton, and it rose directly to about 80,000 yuan / ton in February this year, a surge of 20 times, far exceeding the 10 times increase of upstream battery-grade lithium carbonate last year so far.
At the same time, public data shows that there are currently 40,600 power battery recycling related enterprises in the mainland, and 24,400 battery recycling enterprises have been registered in 2021 alone, an increase of 635.17% year-on-year.
However, in the list of three batches of enterprises in the "New Energy Vehicle Waste Power Battery Comprehensive Utilization Industry Specification Conditions" released by the Ministry of Industry and Information Technology, only 47 companies have the qualification of battery recycling. Monks more porridge less.
Zhao Weiduo said that the current battery recycling companies "at least 70% are doing trade, and many companies only play the role of second-hand sellers of waste batteries, buying and selling at high prices."
As many people in the industry have said: whoever grasps the source channel of waste batteries at present can do this recycling business.
This is only a chaotic corner of the power battery recycling industry.
Since the gradual promotion of new energy vehicles in China in 2013, batteries have become an indispensable part of the production process of new energy vehicles. In general, the power battery of the car generally has a 5-8 year service cycle (5 years for passenger cars, 8 years for buses to be forced to retire), and when the battery capacity is attenuated to 60% - 80%, it is necessary to enter the ranks of decommissioning.
Data show that 2020-2021 is exactly the retirement age of the first batch of new energy vehicle batteries. According to data from the China Automotive Technology and Research Center, the cumulative decommissioning of continental power batteries in 2020 will be about 200,000 tons (about 25GWh), and it is expected that the cumulative decommissioning volume will reach 780,000 tons in 2025, when the recycling of used automobile batteries will usher in a real outlet.
However, although the road has not yet arrived, many difficulties are already ahead.
Recycling is the fate of power batteries
Lithium batteries are generally considered more environmentally friendly compared to lead-acid batteries that contain severe metal contamination.
But there are always two sides to the coin.
"In the production process, new energy vehicles not only have no carbon reduction advantages than fuel vehicles, but even generate more carbon emissions due to power batteries." In addition, if the battery is not properly disposed of, it will also cause serious environmental hazards and safety hazards. Lin Xiao, general manager of Suzhou Bocui Circulation Technology, told 36Kr.
It is understood that the power battery contains lithium iron phosphate, lithium manganate, lithium cobalt oxide, nickel cobalt manganese (ternary) and other elements. If the waste battery is generally landfilled, incinerated, composted, etc., the metal elements and compounds in it will cause serious pollution to the atmosphere, water and soil.
Image source: Visual China
Therefore, it can be expected that in the context of carbon peak carbon neutrality, zero-fall into mud is crushed into dust, and recycling is the fate of waste batteries.
On October 24, 2021, the State Council issued the "Carbon Peak Action Plan before 2030", proposing the "Ten Major Actions for Carbon Peaking", in which the circular economy helps carbon reduction action clearly requires the promotion of waste recycling in emerging industries such as decommissioned power batteries, photovoltaic modules, and wind turbine blades.
The state has also issued a series of policies such as the implementation of the "Interim Measures for the Management of the Recycling and Utilization of New Energy Vehicle Power Batteries" and the "Administrative Measures for the Echelon Utilization of New Energy Vehicle Power Batteries".
At present, the first batch of new energy vehicle power batteries have entered the scrapping stage, and a larger wave of battery decommissioning is already on the road. In 2021, the sales volume of new energy vehicles in mainland China will reach 3.521 million units, and the batteries of these vehicles will be retired after 5-8 years.
Everbright Securities pointed out that in 2030, the recycling of ternary and lithium iron phosphate batteries will become a hundred billion market. Among them, the total recovery space of ternary battery metal will reach 60 billion yuan under the average price, and the cascade utilization and recycling market space of lithium iron phosphate batteries is expected to be more than 48 billion yuan, adding up to a market size of more than 100 billion yuan.
What's more, the current upstream resources of power batteries are in short supply. Many people in the industry also said that although the recycled lithium resources only account for about 5% of the market, it is far from enough to make up for the market gap.
"In the short term, although the ability to alleviate resource constraints is limited. However, in the long run, with the advent of the tide of power battery retirement, the amount of recycled resources will continue to rise; when the new energy market tends to mature and the growth rate decreases many years later, the proportion of recycled resources will also begin to rise. Ganfeng Recycling employees under Ganfeng Lithium told 36Kr.
At present, the recycling of power batteries mainly includes two ways: cascade utilization and recycling.
In general, as the number of charges increases, when the power battery attenuates more than 20%, the battery can no longer meet the needs of the vehicle. The cascade utilization is mainly to use the battery with higher remaining capacity for energy storage, low-speed electric vehicles with less high mileage requirements, and downgrade the use;
Recycling is to recover lithium, cobalt, nickel and other metal elements through the fire method (calcination after crushing) and wet method (soaking extraction) to become the raw materials for battery manufacturing.
Some insiders told 36Kr that due to the different metal elements contained in the power battery, the ternary battery contains more metal elements, and will generally be directly recycled. Lithium iron phosphate batteries are prioritized for cascade utilization, followed by recycling.
At present, the extraction rate of nickel, cobalt and other metals in ternary batteries in the industry can reach 98%, and the recovery rate of lithium carbonate can reach 90%.
The "city mine" has not yet reached the moment of outbreak
Under the dual stimulus of policy and market, a group of players have poured in.
Several industry insiders interviewed agreed that the challenge in the current battery recycling industry is how to get used batteries.
Because the battery is sold from the battery manufacturer to the car company, and the car company is sold to the consumer, the battery property right has been transferred many times, which also leads to the easy dispersion of the scrapped battery.
Bydy's Fudi Battery employees told 36Kr that there are currently four main ways to recycle batteries: bad batteries in production (the general battery production rate is 5%-8%); in addition, there are batteries on car companies' experimental vehicles, batteries in the hands of car aftermarkets, and real decommissioned batteries.
Although the state has also set up relevant battery recycling outlets, Zhao Weiduo of Shunhua Lithium told 36Kr that nearly 70% of the waste batteries have fallen into the hands of second-hand vendors and small workshops, and only about 30% of the waste batteries flowing into the regular recycling outlets.
"Trade players have grabbed a lot, and some large battery recycling companies such as Grimme and The Gap Cycle of the Ningde Era have also been obtained from traders." Some insiders told 36Kr.
Shunhua Lithium Zhao Weiduo said: "They are making quick money, regardless of environmental protection issues, if they continue to let small workshops develop, potential pollution may occur, and they will embark on the old road of lead-acid batteries "first develop and then treat". ”
It is understood that there are two kinds of irregular players, one is a pure second-hand seller, high-priced pour into the sale; the other is a small workshop without formal qualifications, which will simply treat the old battery, and sell the black powder after the waste battery is crushed and sorted to the downstream recycling enterprises.
Shunhua Lithium Battery Recycling Factory The picture shows the automatic filter press
"Although the state has published a white list of relevant recycling battery companies, it is only a guiding document and is not mandatory. The domestic waste battery recycling industry needs to further establish a sound development model and mechanism. An industry insider said.
In addition to robbing waste batteries, battery recycling is not fully mature in technology and recycling process.
Taking the cascade utilization as an example, from a technical point of view, in the process of cascade recycling, the BMS management mechanism such as battery capacity and battery attenuation is not perfect, resulting in difficulties in sorting the cascade battery.
"Many waste batteries have different years and product models, which brings the result that on the one hand, the cost of testing remains high, and on the other hand, product consistency cannot be guaranteed." Therefore, at present, the use of ladder battery products is still in the exploration stage, and it is also possible to apply small-scale energy storage, and it is difficult to store energy for large. ”
From the perspective of the market, it is also difficult to establish a reverse logistics mechanism for battery ladder products. After all, consumers prefer new batteries to decommissioned batteries.
In addition, the recycling points of retired battery products are relatively scattered, and the collection and transportation costs of battery recycling and recycling enterprises are relatively high.
"The industry is still in its infancy, and there is still a lot of room for evolution and improvement. After all, the battery materials in the past five years are not the same, and the next five years are not the same, which means that the recycling objects and recycled products are changing every year, which also means that the recycling process equipment and legal requirements will also change greatly. Lin Xiao, general manager of Suzhou Bocui Circulation Technology, said.
Multi-player layout first
At present, there are four main types of domestic enterprises doing battery recycling, covering the upstream and downstream of the battery industry:
First, battery material production enterprises, such as ternary material factory Huayou Cobalt, Grimme, Ganfeng Lithium, etc., there are mines in the upstream, production in the downstream, and it is not too difficult to do battery recycling.
Grimme has signed automotive battery recycling agreements with more than 280 car companies and battery companies, with an annual recycling capacity of 130,000 tons, ranking the forefront of the industry. Ganfeng Lithium also established Ganfeng Recycling in 2016 to start recycling waste batteries and materials.
Second, battery manufacturing enterprises, such as catheter times completed the acquisition of "Bangpu Cycle" in 2013, the lithium battery recycling business sector has become one of the three core businesses; with Yutong, SAIC, BAIC, Geely and other car companies to cooperate to recycle waste power batteries, it will be transformed for energy storage.
China Tower recycles power lithium batteries and utilizes them in cascade
Third, automakers, such as BYD's Fordy Battery, will produce cascade battery products that will be supplied to the battery user China Tower. An employee of Fordy Battery told 36Kr that the current by-one ladder battery production capacity is about 1.5GWh per year, and it is also planning a waste battery recycling project with a target production capacity of at least 10,000 tons.
The fourth is a third-party environmental protection enterprise that specializes in battery recycling, such as the Above-mentioned Shunhua Lithium Industry, Bocui Cycle, etc.
In some European and American countries, the main body of battery recycling is more clear and fixed, such as the recycling of waste batteries in the United States will be led by authoritative battery recycling third-party organizations, Europe is legally determined that battery recycling belongs to the extended responsibility of battery manufacturers and car companies, and Japan is more encouraging car companies to invest in battery recycling.
In contrast, the domestic battery recycling body is more diversified. "In the future, a linkage and closed-loop B2B model of battery manufacturers, car companies, and recycling companies may be formed, and third-party recycling companies will become the sharers of social responsibility of car companies and battery manufacturers." A virtuous circle is expected around 2030. Shunhua Lithium Zhao Weiduo said so.
Although the current industry has not really exploded, it should be recognized that as an important part of the automobile industry, the recycling of batteries requires the participation and cooperation of upstream and downstream of the industry to avoid environmental pollution to the greatest extent and achieve resource recovery. After all, how to treat the battery's past is how to treat our future.
Reference:
1. "Cost Reduction and Breakthrough of Lithium Constraint, Constituting a Closed Loop of Lithium Battery Cycle", Everbright Securities
Welcome to 36 Carbon