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Recently, Guojin Securities issued a research report titled "Insights into the Power Lithium Battery Recycling Industry," highlighting the growing opportunities within this sector. The report emphasizes that with the rapid expansion of the new energy vehicle market, the demand for large-scale power lithium batteries will drive significant industrial growth in battery recycling and secondary use applications.
This report suggests that the development of a robust power lithium battery recovery and reuse industry is not only environmentally responsible, helping to prevent pollution and resource wastage, but also economically advantageous. The rising demand for power lithium batteries and the increasing volume of discarded batteries are clear indicators of this trend. According to statistics, in 2015, China's total lithium battery production was 47.13 GWh, with power batteries contributing 16.9 GWh, representing 36.07%. By 2020, the report predicts that the demand for power lithium batteries will reach 125 GWh, with 32.2 GWh worth of discarded batteries, or approximately 500,000 tons. By 2023, this figure is expected to surge to 101 GWh, equivalent to about 1.16 million tons.
The report notes that recycling and downstream utilization of lithium batteries could yield substantial economic benefits and investment prospects. Components like the cathode, anode, separator, and electrolyte contain valuable metals such as cobalt, lithium, and nickel, which hold high potential value. For instance, a typical ternary battery contains around 1.9% lithium, 12.1% nickel, and 2.3% cobalt, along with copper and aluminum portions making up 13.3% and 12.7%, respectively. Proper recycling of these materials can significantly reduce costs and create major revenue streams.
Currently, there is a growing imbalance in the supply and demand of battery metal materials. As the demand for new energy vehicles rises, domestic battery manufacturers have been expanding their production capacities, particularly focusing on triple-battery systems, which has heightened the need for cobalt. This makes recycling cobalt from used batteries increasingly cost-effective. The report predicts that the market size generated by recycling cobalt, nickel, manganese, lithium, and other metals from used power lithium batteries will see a significant uptick starting in 2018, reaching 5.2 billion yuan by then. It is projected to rise to 13.6 billion yuan by 2020 and exceed 30 billion yuan by 2023.
For businesses, the recycling of power batteries presents immense commercial potential. Recycling reduces raw material costs for battery manufacturers and aligns with government initiatives aimed at fostering a low-carbon economy and an eco-friendly society.
However, challenges remain in China’s current power battery recycling practices. The report points out that while the technology is relatively advanced, management remains underdeveloped, hindering the industry’s progress. Issues include an incomplete recovery network dominated by small and medium-sized recyclers, making effective collection difficult. Additionally, many recycling companies lack the necessary scale and technological sophistication to ensure efficient resource recovery. Illegal operations without proper licenses pose security and environmental risks.
Despite these obstacles, China has implemented a system of extended producer responsibility. Policy improvements are gradually standardizing the industry. The report notes, "As the sales and production of new energy vehicles continue to grow, the recycling of power batteries for electric vehicles will become increasingly critical. Both national and local governments have been actively introducing policies to facilitate the establishment of a sustainable industrial ecosystem."
In conclusion, while there are hurdles to overcome, the future of the power lithium battery recycling industry looks promising, driven by both economic incentives and regulatory support.