Along with the swift development of the Chinese new energy vehicle (NEV) industry, the number of retired power batteries has risen year over year with Chinese waste power battery volume estimated to exceed 18GWh in 2021 and reach 91GWh by 2025, according to TrendForce’s latest investigations. Currently, power battery recycle and reuse is primarily divided into echelon utilization and material recycling. Chinese waste battery material recycling already possesses a certain scale with a 2020 market size of RMB2.4 billion and it is estimated to reach RMB26 billion by 2025.
TrendForce adds, the current Chinese Ministry of Industry and Information has officially announced the “14th 5-Year Industrial Green Development Plan,” expressing a wish to promote a transformation in resource utilization. In terms of the recycling and reuse of waste power batteries, it proposes a comprehensive set of laws and regulations for power battery recycling, exploring and promoting new business models such as “internet + recycling,” strengthening traceability management, encouraging upstream and downstream enterprises in the industrial chain to build shared recycling pipelines, and establishing a set of centralized recycling service stations. In addition, scaled echelon utilization in fields such as waste power battery energy storage, backup, charging, and exchange will be promoted to establish a set of echelon utilization and recycling projects and build a more complete power battery recycling structure by 2025.
Power battery recycling and reuse include echelon utilization and materials recycling. In echelon utilization, power batteries with charge capacities that have dropped to 80% or less are used in applications such as power backup, energy storage, or other related fields. Currently, most examples of echelon utilization are at an experimental demonstration stage. In materials recycling, retired power batteries are dissembled, valuable metals such as lithium, cobalt, and nickel recycled, and reused in the recycled manufacturing of battery materials (e.g. ternary precursors).
TrendForce believes the development of NEVs is an important avenue in the promotion of energy conservation. The rapid development the industry will inevitably be accompanied by the large-scale retirement of power batteries in the future and bring industry opportunities for power battery recycling and downstream echelon utilization. Currently, the battery recycling business still faces a number of bottlenecks such as the fragmentation of power battery life cycle information, a lack of testing standards for retired batteries, improvement of technical standards for echelon utilization, and fluctuations in metal pricing affecting the economics of material recycling. These are all factors that restrict the recycling and reuse of power batteries. China’s new battery recycling policy will promote the orderly and healthy development of the lithium battery industry in the future and help break through the constraints of lithium and other key global resources.
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