Abstract:A large number of power batteries in mainland China have entered the retirement period, and how to effectively recycle and dispose of these waste batteries has become an urgent problem. The increase in the amount of power battery scrap has promoted the rapid expansion of the mainland power battery recycling market. In 2022, the market size of the power battery recycling industry in mainland China will be 28.6 billion yuan, a year-on-year increase of 73.33%, and the power battery recycling industry has great potential for future development.
1. Definitions and Classification
Power battery recycling refers to the recycling of waste power batteries, and according to the different performance states of waste power batteries, they are overhauled and processed for cascade utilization or dismantling and utilization. According to different recycling methods, power battery recycling methods can be divided into cascade utilization and dismantling and recycling. Generally, when the residual capacity of waste power batteries is in the range of 60%-80%, the cascade utilization value is higher, and when the power battery capacity drops to less than 40% of the initial capacity, it is generally selected to disassemble and recycle.
Second, the business model
1. Extended Producer Responsibility System
Extended Producer Responsibility (EPR) for EV battery recycling is an environmentally friendly and cost-effective business model. Under this model, the producer of the power battery is not only responsible for the manufacture and sales of the product, but also responsible for the recycling, treatment and reuse of the product after use. By building a complete recycling system, producers can ensure that waste power batteries are disposed of reasonably, reduce environmental pollution, and achieve effective recycling of resources. This model not only helps to promote green development and sustainable development, but also reduces production costs, improves resource utilization efficiency, and achieves a win-win situation of economic and environmental benefits.
2. Third-party recycling mode
The third-party recycling model of power battery recycling refers to the collection, transportation, treatment and reuse of waste power batteries by professional recycling enterprises independent of battery production and sales. In this model, third-party recycling companies play a key role by establishing professional recycling networks and treatment facilities to efficiently and safely dispose of used EV batteries and convert them into valuable renewable resources. This model not only reduces the burden on battery manufacturers, but also promotes the professional and large-scale development of the power battery recycling industry, which helps promote the green transformation of the entire industry.
3. Government-led model
The government-led power battery recycling model refers to the government's direct participation in or guidance of the entire process of power battery recycling through the formulation of relevant regulations and policies. In this process, the government not only provides financial support, but also establishes recycling standards and supervision systems to ensure that waste power batteries are recycled in a compliant, safe and efficient manner. This model helps to unify the recycling market, avoid disorderly competition and waste of resources, and at the same time promote the development of green technology and industry, and achieve simultaneous improvement of economic and environmental benefits. The government-led model plays an important role in promoting the development of the power battery recycling industry, and is an effective means to ensure the sustainable use of resources and the safety of the ecological environment.
3. Industry policy
Power battery recycling can not only reduce resource waste, but also reduce environmental pollution, which is an important measure to improve resource utilization efficiency and protect the environment. Therefore, the state is very supportive of the development of the power battery recycling industry, and the "Opinions on Further Unleashing Consumption Potential to Promote the Sustainable Recovery of Consumption" and the "Outline of the Strategic Plan for Expanding Domestic Demand (2022-2035)" issued in 2022 both propose to accelerate the construction of a recycling system for waste materials. In February 2024, the State Council issued the "Opinions on Accelerating the Construction of a Waste Recycling System", which clearly requires strengthening the recycling of waste power batteries. Among them, it is also pointed out in detail that it is necessary to vigorously promote the quality certification of power battery cascade utilization, and study and formulate technical specifications for waste power battery recycling and dismantling enterprises.
Fourth, industry barriers
1. Technical barriers
The main technical barrier faced by the power battery recycling industry in China is the lack of battery dismantling and separation technology. Due to the complex internal structure of power batteries, which contain a variety of metals and chemicals, how to safely and efficiently disassemble and separate battery components is still a technical problem in the industry. At present, most enterprises still use traditional mechanical dismantling and chemical treatment methods, which are not only inefficient, but also may cause waste of resources and environmental pollution. Therefore, the research and development of advanced battery dismantling and separation technology is a technical barrier that needs to be broken through in the power battery recycling industry in mainland China.
2. Financial barriers
The power battery recycling industry requires a large amount of capital investment, including the construction of recycling sites, the purchase of processing equipment, and technology research and development. In addition, due to the unstable recycling volume of waste power batteries, large price fluctuations, as well as possible technical risks and market risks in the treatment process, the capital recovery cycle is long, which puts forward higher requirements for the financial strength and financial management ability of enterprises.
3. Market barriers
There are problems such as information asymmetry and poor recycling channels in the power battery recycling market, which leads to unstable recycling prices and difficult to guarantee the recycling amount. In addition, the market awareness of the power battery recycling industry is insufficient, and many consumers and enterprises lack awareness of the recycling value and importance of waste power batteries, which makes it difficult to expand the recycling market. In addition, there are a large number of informal recycling channels and small workshops in the market, which forms competitive pressure on formal recycling enterprises and increases the difficulty of market entry.
Fifth, the industrial chain
1. Analysis of the industry chain
The upstream of the industrial chain of the power battery recycling industry is the source end of scrapped power batteries, which mainly includes the retired power batteries in the new energy vehicle market and the production waste of power battery manufacturers. The midstream is mainly for the recycling and treatment of power batteries, mainly including cascade utilization and dismantling and recycling. The downstream is mainly used in low-speed electric vehicles, energy storage equipment, communication base stations and lithium, cobalt, nickel and other related non-ferrous metal processing products. Among them, the power battery is generally used in low-speed electric vehicles, energy storage equipment, communication base stations, etc., after only cascade utilization, and the resources obtained after the power battery is dismantled and recycled, generally used to produce non-ferrous metal processing products such as lithium, cobalt, nickel, etc.
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