There are more and more new energy vehicles on the streets, carrying an enticing yet somewhat "hot" "treasure trove"—power batteries. 2021 is considered the first year of the power battery retirement wave, and the track surrounding power battery recycling and cascading utilization has become increasingly heated. However, in this field, which is regarded as a trillion-level blue ocean, the more valuable retirement wave of ternary lithium batteries has yet to arrive. In a market situation where "there are many wolves and little meat," more batteries are flowing into the hands of "black households." How to form a standardized recycling system and how to achieve safer and more efficient reuse solutions are still being explored.

Two mainstream reuse solutions each have their challenges.

In the laboratory of a "whitelist" company for power battery recycling and cascading utilization, a retired battery can start its journey towards reuse by first undergoing a comprehensive "check-up." "We need to know how much energy this battery still has, what losses occurred during use, etc., in order to formulate its reuse plan," a relevant person in charge told reporters. This is actually one of the biggest challenges of reuse. "Because each retired battery is different, even if they are from the same brand or even the same production batch, their 'health status' can vary after years of use."

The reporter learned that batteries in good 'health status' may not need to be disassembled to be put into reuse, while those with complex conditions may take several months just to run data on a computer for a 'check-up.' The high degree of uncertainty makes it currently difficult to achieve large-scale recycling and reuse solutions, but in the past two years, companies have also attempted to explore some utilization scenarios. For example, developing mobile energy storage products for emergency charging of vehicles; using retired batteries to develop photovoltaic energy storage projects; and developing low-speed power battery packs based on retired power battery modules and cells, which are put into market applications through a leasing model.

Another reuse solution targets the 'materials' in retired batteries. The battery giant CATL's acquisition of Bangpu is a major representative of material utilization. "First, the battery module is completely discharged, and then automated equipment and professional tools are used to disassemble the battery cells. The positive and negative electrodes, electrolyte, and separator are separated, and then the electrode materials are leached and purified. Through processes such as ion exchange, precipitation, and adsorption, precursors for power battery positive electrode materials are prepared. Currently, the total recovery rate of core metals can reach over 99.3%," a relevant person from CATL introduced.

Although this method is relatively mature, the person in charge admitted that due to the complexity of the process, most retired batteries are lithium iron phosphate batteries, which have low valuable metal and material content. Therefore, the current economic benefits of power battery recycling are low, and there may even be losses.

"Whitelist" companies cannot compete with "black households."

The truly coveted retirement wave of ternary lithium batteries has yet to arrive, and the current recycling stage of power batteries has already shown a situation of "many wolves and little meat." Industry insiders estimate that nearly 80% of power batteries do not flow into formal channels and are recycled by so-called "black households" and processed in small workshops.

The Ministry of Industry and Information Technology has publicly announced the list of companies that meet the "Comprehensive Utilization Industry Specification Conditions for Waste Power Batteries of New Energy Vehicles" twice, once in 2018 and again in January this year, with more than 20 companies selected for the "whitelist." However, the relevant person in charge of the aforementioned "whitelist" companies admitted: "Despite having formal qualifications, the number of batteries we can recycle is very limited." Competing with "black households" is mainly due to price reasons. "For example, small workshops can avoid issuing invoices and do not have to consider environmental protection requirements during the scrapping process, so the regular companies have no advantage in bidding."

Such chaotic recycling practices urgently need to be addressed, because once the retirement wave of ternary lithium batteries arrives, the value of metals and materials like nickel and cobalt will be several times higher than that of lithium iron phosphate batteries, leading to more intense competition. A relevant person from CATL believes that if the recycling supervision system is not improved quickly and the flow of scrapped power batteries is not strictly controlled, it will bring many environmental and safety hazards to the scrapping process.

A refined traceability management system urgently needs to be established.

According to the secondary battery and electric vehicle research organization SNE, it is estimated that by 2020, the retirement volume of power batteries in China will be about 25GWh, and by 2025, it will reach 90GWh. Due to the skyrocketing prices of lithium and cobalt, international market research organizations predict that the global power battery recycling industry will reach a scale of 12.2 billion USD by 2025 and 18.1 billion USD by 2030, with China becoming the largest power battery recycling market.

Industry insiders estimate that the highly coveted high-nickel ternary lithium batteries will begin to enter a concentrated scrapping period in 2022, and the power battery recycling industry will face real challenges.

In the recycling stage where chaos is most concentrated, establishing a battery traceability mechanism and implementing refined management for each battery has become a call from the industry. Currently, some new energy vehicle companies are exploring this. For example, WM Motor previously revealed plans to establish a traceability coding rule for power batteries, using a unified battery code to track the flow of each power battery in detail. In addition, companies like BAIC New Energy and NIO are also exploring refined management in their battery swapping businesses.

In the laboratory of a "whitelist" company for power battery recycling and cascading utilization, a retired battery can start its journey towards reuse by first undergoing a comprehensive "check-up." "We need to know how much energy this battery still has, what losses occurred during use, etc., in order to formulate its reuse plan," a relevant person in charge told reporters. This is actually one of the biggest challenges of reuse. "Because each retired battery is different, even if they are from the same brand or even the same production batch, their 'health status' can vary after years of use."

The reporter learned that batteries in good 'health status' may not need to be disassembled to be put into reuse, while those with complex conditions may take several months just to run data on a computer for a 'check-up.' The high degree of uncertainty makes it currently difficult to achieve large-scale recycling and reuse solutions, but in the past two years, companies have also attempted to explore some utilization scenarios. For example, developing mobile energy storage products for emergency charging of vehicles; using retired batteries to develop photovoltaic energy storage projects; and developing low-speed power battery packs based on retired power battery modules and cells, which are put into market applications through a leasing model.

Another reuse solution targets the 'materials' in retired batteries. The battery giant CATL's acquisition of Bangpu is a major representative of material utilization. "First, the battery module is completely discharged, and then automated equipment and professional tools are used to disassemble the battery cells. The positive and negative electrodes, electrolyte, and separator are separated, and then the electrode materials are leached and purified. Through processes such as ion exchange, precipitation, and adsorption, precursors for power battery positive electrode materials are prepared. Currently, the total recovery rate of core metals can reach over 99.3%," a relevant person from CATL introduced.

Although this method is relatively mature, the person in charge admitted that due to the complexity of the process, most retired batteries are lithium iron phosphate batteries, which have low valuable metal and material content. Therefore, the current economic benefits of power battery recycling are low, and there may even be losses.

"Whitelist" companies cannot compete with "black households."

The truly coveted retirement wave of ternary lithium batteries has yet to arrive, and the current recycling stage of power batteries has already shown a situation of "many wolves and little meat." Industry insiders estimate that nearly 80% of power batteries do not flow into formal channels and are recycled by so-called "black households" and processed in small workshops.

The Ministry of Industry and Information Technology has publicly announced the list of companies that meet the "Comprehensive Utilization Industry Specification Conditions for Waste Power Batteries of New Energy Vehicles" twice, once in 2018 and again in January this year, with more than 20 companies selected for the "whitelist." However, the relevant person in charge of the aforementioned "whitelist" companies admitted: "Despite having formal qualifications, the number of batteries we can recycle is very limited." Competing with "black households" is mainly due to price reasons. "For example, small workshops can avoid issuing invoices and do not have to consider environmental protection requirements during the scrapping process, so the regular companies have no advantage in bidding."

Such chaotic recycling practices urgently need to be addressed, because once the retirement wave of ternary lithium batteries arrives, the value of metals and materials like nickel and cobalt will be several times higher than that of lithium iron phosphate batteries, leading to more intense competition. A relevant person from CATL believes that if the recycling supervision system is not improved quickly and the flow of scrapped power batteries is not strictly controlled, it will bring many environmental and safety hazards to the scrapping process.

A refined traceability management system urgently needs to be established.

According to the secondary battery and electric vehicle research organization SNE, it is estimated that by 2020, the retirement volume of power batteries in China will be about 25GWh, and by 2025, it will reach 90GWh. Due to the skyrocketing prices of lithium and cobalt, international market research organizations predict that the global power battery recycling industry will reach a scale of 12.2 billion USD by 2025 and 18.1 billion USD by 2030, with China becoming the largest power battery recycling market.

Industry insiders estimate that the highly coveted high-nickel ternary lithium batteries will begin to enter a concentrated scrapping period in 2022, and the power battery recycling industry will face real challenges.

In the recycling stage where chaos is most concentrated, establishing a battery traceability mechanism and implementing refined management for each battery has become a call from the industry. Currently, some new energy vehicle companies are exploring this. For example, WM Motor previously revealed plans to establish a traceability coding rule for power batteries, using a unified battery code to track the flow of each power battery in detail. In addition, companies like BAIC New Energy and NIO are also exploring refined management in their battery swapping businesses.