Is battery recycling the only blue Ocean in the industry? Upstream and downstream enterprises banded

"If the power battery recycling is not done well, the new energy vehicle industry may turn from a green industry into a black industry." As the relevant person in charge of Green Beauty said, now, the industry has reached a consensus on the importance of power battery recycling.

Power battery recycling is heating up. First, capital is pouring into the track layout; Second, the power battery recycling business model is taking shape.

Not long ago, lithium battery recycling company Guangdong Jinsheng New Energy Co., LTD. (" Jinsheng New Energy "for short) completed a series B+ financing of hundreds of millions of yuan. Meanwhile, the scrap-for-material business model offers a solution to the nascent power battery recycling industry, the reporter noted.

Must do business: An important source of lithium

Layout power battery recycling, has become a must do business.

According to the data released by Shanghai Steel Union on November 11, the price of some lithium electric materials rose, battery grade lithium carbonate rose 2,500 yuan/ton, the average price of 590,000 yuan/ton, industrial grade lithium carbonate rose 2,500 yuan/ton, the average price of 577,500 yuan/ton, continued to hit a record high. It can be seen that after entering the fourth quarter, the demand for lithium carbonate is further increasing, while the supply is reduced for various reasons. Even some industry forecasts, battery grade lithium carbonate price will rise to 600,000 yuan/ton.

Since the new energy vehicle industry shifted from policy driven to market driven, the market performance has continuously exceeded expectations. Under the combined force of the demand side and the supply side, the industry gradually focuses on the recycling of power battery raw materials.

"Power battery recycling will certainly be an important source of lithium resources," Chen Shihua, deputy secretary-general of the China Association of Automobile Manufacturers, told reporters. Zhu Yulong, a veteran electric-vehicle tri-electric system and automotive electronics engineer, even believes that battery recycling technology could reduce China's demand for lithium by at least an order of magnitude.

For now, companies in the power battery recycling circuit are feeling the change. This change is not only reflected in the importance of power battery recycling enterprises, but also in the performance of growth.

An executive of a power battery recycling company said, I entered the industry a long time ago, but I feel more appreciated these past two years. Li Zhenbiao, director of the automotive industry policy research department of China Automotive Industry Research Institute, said that the recycling of lithium iron phosphate batteries was not popular before, but also became popular after the price of raw materials rose.

"All of these recycling companies actually make money." Li Zhenbiao said.

According to the official data released by the leading enterprise of power battery recycling, in the first three quarters of 2022, the business of power battery recycling grew rapidly. From January to September, the total recycling of power battery was more than 12,000 tons (more than 1.50GWh), with a year-on-year growth of more than 130%, and the sales revenue reached 462,701,400 yuan, with a year-on-year growth of 297.73%. Fully into the profit stage.

There is another reason for the emphasis on power battery recycling, which the executives cite as a boost the European Union's new battery law.

It is reported that the draft law on the amendment of the Battery Directive issued by the European Commission shows the requirements for recycled raw materials in the section of sustainability and safety. As of January 1, 2027, batteries should carry a label containing basic information about the battery, including the amount of cobalt, lead, lithium and nickel recovered from waste in the battery's active material.

Capital optimistic: "The only blue ocean in the industrial chain"

Yu Qingjiao, secretary-general of Zhongguancun New Battery Technology Innovation Alliance and chairman of the Battery 100 Committee, said in an interview, "With the increase of market penetration of new energy vehicles, the power battery recycling track has become a high business track. Especially in the upstream raw materials such as lithium carbonate subject to overseas markets, prices remain high and volatile at present, industrial chain enterprises are attaching great importance to the layout of this circuit."

Some investors even said, "This is the only blue ocean in the current new energy vehicle industry chain."

Battery recycling enterprises in the primary market is indeed attracting capital attention. At the end of October, Hunan Shunhua Lithium Co., LTD., A battery recycling company, completed a round of financing of more than 100 million yuan, led by Minmetals Venture Capital, Jiangsu Guoxin, direct investment by Hive Energy, Shenzhen Zhongxiaodang and Guohua Investment. This round of financing will be mainly used for Miluo 150,000 tons of waste lithium iron phosphate battery and waste recycling engineering and new technology research and development.

As mentioned before, Jinsheng Xineng has completed four rounds of financing. This round of B+ financing was jointly led by Dachen Capital and Cornerstone Capital, followed by Bosch, Shaanxi Auto, Guomao Zhanxin, Boshi Fund and other institutions. At present, the shareholder camp of Jinsheng Xineng has integrated the whole chain players and first-line investment institutions of new energy vehicle enterprises such as battery enterprises, auto manufacturers, 4S stores and distribution groups. It is reported that Jinsheng Xineng can achieve an annual production capacity of 100,000 tons of lithium ion battery materials, with 204,000 tons of waste lithium battery processing qualification, and deep cultivation of materials for more than 30 years.

However, in the view of industry insiders, the capital's optimism in battery recycling has also brought some misunderstanding to many enterprises, believing that the industry is "very low threshold and easy to make money".

On the other hand, Yu Qingjiao mentioned that the current lithium battery recycling industry is chaotic, supervision and regulation is not standardized, and the production responsibility system is not in place. Moreover, the current amount of scrap is far from the recovery equilibrium state.

Chen Shihua also mentioned, "The number of scrapped new energy vehicles is still small, power battery recycling is far from meeting the needs of new car production."

However, it also means that in the infancy of the power battery recycling industry, it is conducive to the relevant departments to standardize and enterprises to explore the business model.

Encourage business model innovation "scrap for raw material"

Previously, in the press conference of "Promoting the development of Industrial green and low-carbon cycle" held by the Ministry of Industry and Information Technology, the work focus of retired power battery recycling management was mentioned as "selecting and promoting a batch of mature experience and typical projects of power battery recycling and utilization, encouraging business model innovation, strengthening the upstream and downstream connection of the industrial chain, and guiding all parties to promote the construction of high-quality recycling system".

According to the introduction, at present, according to different business entities, battery recycling business models can be divided into four categories: the recycling model under the producer responsibility system; The vehicle enterprise is the main recycling mode; Lithium electric material enterprise recycling mode; Adopt the recycling mode of step utilization. Among them, the recycling mode of lithium electric materials enterprises is dominated by lithium electric materials enterprises. Through recycling lithium, cobalt, nickel and other key valuable material resources in waste batteries, a closed industrial loop is formed, thus achieving a business model of cost reduction.

Power battery recycling is beginning to be paid attention to, but this new system has not been established systematically. According to the person in charge of the enterprise, "formal recycling channels can not be recycled to the battery, need to spend high prices to buy old batteries", more industry insiders said, "used batteries are auctioned, the price is high".

On one side is the predictable market outlook, and on the other side is the continued rise of recovery prices. Lithium electricity practitioners said to the media that the price of waste lithium iron phosphate battery rose from more than 3,000 yuan a ton last year to more than 30,000 yuan, more than a year increased 10 times.

The reporter learned that, different from the dominance of a single main body, the current upstream and downstream of the industrial chain joined hands, giving rise to a new business model of "waste for raw materials". That is, recycling enterprises collect the waste in the production process of battery factories and material factories in an agreed way, extract the nickel, cobalt, lithium and other metals, produce battery grade nickel, cobalt sulfate and lithium salt, and then return to the battery factory and material factory.

More and more industrial chain enterprises such as battery enterprises, automobile enterprises and recycling enterprises jointly build capacity and channels, including deep binding methods such as equity bundling.

For example, Greenbeauty has signed strategic cooperation agreements on "directed recycling" with upstream and downstream enterprises such as Rongbai Technology, Yiwei Lithium Energy, and Funeng Technology. Battery manufacturers (Yiwei Lithium Energy, Funeng Technology, etc.) will give waste batteries and battery waste to the company, and after green extraction and treatment, the company will produce terpolymer precursor or cathode material as raw materials to the battery factory, locking upstream resources in advance.

It is reported that Greeme has signed agreements with more than 630 automobile factories and battery factories in the world to establish directional recycling of used batteries, and build and share more than 200 new energy vehicle power battery recycling service outlets. In the future, the company will focus on power battery recycling and plans to recycle 300,000 tons of power batteries by 2026.

In May this year, BMW Group announced a strategic cooperation with Huyou Cycle to realize the closed-loop recycling of domestic electric vehicle power battery raw materials for the first time, and provide the decomposed raw materials such as nickel, cobalt and lithium to BMW battery suppliers for the production of new power batteries, realizing the closed-loop management of power battery raw materials.

In this regard, the person in charge of Huayou cycle said: "Car companies understand batteries, and we understand products. The upstream and downstream linkage is the best way to cooperate and increase efficiency, and can also create more models."

At present, new energy vehicles are still in an incremental market, far from the peak of recycling. Yu Puritanism told reporters: "At present, the power battery recycling industry in our country is just in the starting stage, the battery recycling network system is not perfect, various business models are in the exploratory period, the vehicle enterprise needs to undertake the main responsibility of power battery recycling, automotive enterprises and battery enterprises form the industrial closed loop cooperation, is conducive to promoting the development of waste power battery recycling industry.

Source: China Automotive News Author: Zhao Qiong