This year the expected decommissioned power battery is 5.14GWh.

I share my views on the power battery recycling market, technology and policies. In four aspects, one is the market situation, and the policy is sorted out, then the technical situation, and the existing market pattern and model of power battery recycling.

First of all, we talk about the market. The upstream is the power battery itself. From last year's situation, the installed capacity of power batteries in 2017 was 33.31GWh, a year-on-year increase of 16%. Last year, the sales volume of new energy vehicles was 777,000, an increase of about 50%. Therefore, there is such a big gap between the output and the amount of battery growth. The most important thing is that the current increase in the output of new energy vehicles is in the passenger car. Everyone knows that the amount of batteries carried by passenger cars is relatively small, so Sales volume is growing at a high rate, but battery growth has declined. According to our forecast, the total demand for power batteries in 2018 should be 53GWh, with a growth rate of about 60%.

We know that in the case of the power battery is now scrapped or decommissioned, we analyze the situation of decommissioning in the next three to five years, and we should sort out the situation of power battery installation from 2014 to the present. As can be seen from this table, the initial power battery is mainly in the new energy bus and lithium iron phosphate. The ternary battery of the passenger car started to grow rapidly last year. Based on the previous data, we believe that passenger cars are about five years of retirement, passenger cars and commercial vehicles are three years of retirement, we have predicted the battery type and classification, as well as decommissioning. As can be seen from the forecast, in terms of battery type, the decommissioned battery will be based on lithium iron phosphate battery, and this situation may last until 2022, after which the retracement of the ternary battery may be related to iron phosphate. Lithium is flat and gradually overtakes. At the same time, the recent source of decommissioning of power batteries is the new energy bus. Based on this situation, the theoretical decommissioning volume for the whole year of 2018 is expected to be approximately 5.14GWh. Similarly, when it comes to the recovery of power batteries, there are two main aspects. One is the use of ladders and the other is recycling. Here we must emphasize that lithium iron phosphate itself is mainly based on lithium carbonate, and the overall value is relatively low. The ladder utilization is lithium iron phosphate, and the ternary batteries are directly used for reuse. We have calculated that after the decommissioning of the lithium iron phosphate battery, it is assumed that 80% of the capacity is reached at the time of decommissioning, and 60% of the remaining capacity after screening can be reused. After the calculation, we believe that by 2020, the overall market size will be 6.5 billion Yuan, the ladder will be 4.1 billion Yuan, and the reuse will be 2.4 billion Yuan. By 2023, the whole scale will reach 15 billion Yuan, and the ladder will be 5.7 billion Yuan. The recycling is 9.3 billion Yuan. We see that the future growth of recycling and disposal is still considerable, mainly from the retirement of the future ternary power battery. The use of the battery scale will maintain a certain scale in the future, mainly because the existing bus market is relatively saturated and the growth is weak.

This is sorted according to the timeline and policies related to power battery recycling. It can be seen that the power battery recycling has been mentioned since 2006, but in fact everyone should recognize that it should be in 2009. In 2009, the new energy vehicle has just started. I think there is a key time node. In January and February 2016, there are two important policy announcements, one is technology policy and the other is specification. Why are these two policies important? Because these two policies are based on the principle of recycling power batteries, both in terms of recycling methods, recycling conditions, and recycling models. However, it is only a principled provision. Why, because in the policy, the first is the lack of specific standards, which only means that we require certain environmental protection, but it does not indicate which specific standards need to be met, but also because of the relevant standards at that time. It has not been worked out yet. The second problem is that it only requires some principles or conditions, and there are no punitive measures and specific responsible departments. This policy is only a guiding policy, not an implementation policy. The real implementation policy is February this year. Everyone knows the implementation of the interim management approach. The difference is that the policy clarifies that the recycling should meet some national standards, and the national standards include the dismantling specifications issued last year and the specifications for recycling. It also clarifies the various departments and which departments regulate the recycling. There is another one that puts forward clear punishment measures for these illegal enterprises. Therefore, the implementation of this policy is considered to be a landmark event. It means that China’s recycling policy system is gradually being built, and the subsequent policies will be some refined parts, such as standards or recycling policies in various places. This is the case with some recycling systems and the interrelationships between policies.

Next is the relevant standard. In fact, two major standards were released last year. One is the dismantling specification, and the other is testing. We have seen these two standards set up and started to be established in 2013. The reason why it was officially promulgated last year is also objective. In 2013, at the first time, new energy vehicles were just getting started, not to mention the recycling of power batteries. There is no experience in the market and in various companies. Gradually starting from 2016, there are some small batches, as well as some recycling companies to try, so there has been a certain accumulation in this area, and relevant standards have also been released. We believe that as time goes on, its release will certainly accelerate, and it is expected that there will be more than one relevant standard to be released this year. But here we have to pay attention to it. Take the disassembly specification as an example. There are some standards in this standard that are not very detailed. It is also because our technology has accumulated a certain amount of technology, but the relative technology in disassembly and other aspects is not very mature. Some places still need to be improved and improved.

Next is the main technical situation of recycling. First of all, we say that the recovery of the power battery is two parts, the use of the ladder and the recycling. First of all, the ladder uses this part. The use of the ladder is firstly detected, and then the battery pack is filtered and disassembled. Its core is the technology of detecting and predicting the life. The most important core problem is who is using the data. Nowadays, there are more PACK companies from the use of ladders, and most of these companies are PACK companies affiliated to car companies, because they can more easily obtain battery data and vehicle operating data, which can be used for future life and technical performance accurate predictions. This is the case of projects used at home and abroad. It can be seen that the projects used by foreign countries are mainly distributed, micro-grid and household energy storage. Our country is mainly engaged in commercial energy storage and large-scale energy storage. In terms of participants, foreign countries mainly rely on enterprises or recycling enterprises to participate, while the main domestic market is mainly based on the participation of the national grid. This is also the characteristics of our country. Because of the commercial or large-scale energy storage, there will inevitably be a country. The participation of the grid will enable it to be effectively connected to the grid.

Next is the reuse part, which is also divided into three sections, one is the pretreatment process, the separation process and the product preparation process. The pretreatment is mainly to lift the lithium ion battery, and the battery is broken or loses its chemical activity by low temperature or isolation. The decomposition process is through physical or chemical methods, followed by product preparation. This is the process of a foreign company. We see that this part is the pretreatment process. It uses low temperature cooling to deactivate the lithium ion battery and then pulverize it. It uses a physical mechanical method to separate its products. The subsequent process is to extract the final product in a chemical manner. This is the process of another company. It can be seen that the pre-treatment is carried out in the early stage, and then the physical product is selected. Finally, the final product is purified by chemical means. The purification effect is relatively good, but the effect is relatively good, but the process is relatively long and the overall cost will be higher. This is the technical situation of major companies at home and abroad.

Next, I will mainly introduce you to the layout and mode.

First of all, let's briefly introduce the existing recycling enterprises. I think there are five types of enterprises involved in the recycling of existing ones, namely traditional recycling companies, emerging recycling companies, PACK plants, materials companies and automakers. For example, traditional recycling companies, such as GEM, Bangpu, and Zhangzhou Haopeng, are themselves recycling companies, and have the qualifications for recycling. For example, GEM originally used to recycle electrical appliances, and expanded the power battery with the original recycling technology. They are relatively superior in material recycling technology and battery breaking technology, and smelting technology is also advantageous. At the same time, they will also use their own recycling channels, and there are advantages in terms of channels. Insufficient, they lack a certain source of power batteries, but also need to cooperate with channels such as OEMs and scrap factories. In addition, from the existing technology, it is mainly to recover the positive electrode metal, which is directly burned or disposed of on the separator, the negative electrode and other materials, and is basically chemically treated. Their recycling cost and environmental requirements are relatively It is relatively high. There is also an emerging recycling company, such as Beijing Saidemei, whose advantage is that in the battery breaking and dismantling technology, there is a certain accumulation in this respect. Of course, they themselves have some shortcomings. From the perspective of the big environment, the requirements for environmental evaluation of such smelting enterprises are very high. It is difficult to reach the follow-up from the technical and qualification aspects reprocessing of smelting. But they still have the advantage, mainly to obtain value from the material side, so the separation of the material is finer, like Sime Mei, the positive and negative electrodes and the electrolyte and the outer casing are treated. There is also the PACK factory. We know the development of new energy auto companies. They are extending the core power battery. Many auto companies have started to set up their own PACK companies for assembly. This has the advantage that they can integrate the whole vehicle. Control System. At the same time, these PACK plants work closely with OEMs and have an advantage in recycling channels. The next step is material companies, such as Huayou Cobalt, etc., because they have smelting technology, smelting technology is also very mature, originally mainly metal smelting, so there is still a certain lack of battery disassembly and crushing technology. Next is the OEM. In fact, they are involved in recycling. First, they are recycled from the platform. Because of the entire circulation, the OEM is the circulation of all power batteries, whether it is from sales or recycling. Second, the automaker itself will also be involved in car scrapping. In this respect, the battery can be recycled, and the core of the entire platform and monitoring is controlled. It is suitable for promotion or construction of a platform.

This picture is an analysis of our existing holdings. We know that new energy vehicles have about 1.5 million vehicles last year. In terms of distribution, mainly in the eastern region, Beijing-Tianjin-Hebei and Guangdong, there are more reserves. We can also speculate on some of these reserves. Some places where businesses are established. There is one less picture here. Let me talk about it. We have sorted out the latest new energy or power battery recycling companies. As of last week, there are probably more than 400 recycling companies related to power batteries. Basically, this amount was very small before 2014, and the amount of newly registered recycling companies starting from 2015 is gradually increasing. As of the first three months of 2018, the newly added power battery recycling companies have roughly equaled the amount of new power battery recycling companies in 2016, probably more than 70. It is conceivable that this year's power battery recycling companies will be more growth. From the perspective of distribution, Anhui and the eastern coastal areas are the most. From a structural point of view, most of them belong to small recycling enterprises. In addition, there is another very interesting feature. The recycling enterprises in Beijing and Tianjin are relatively few, and Henan and Hebei are relatively more. This may be related to the current environmental assessment, because we know that the power battery needs to be smelted in terms of reuse. For provinces with stricter EIA requirements, there is also a problem with the establishment of the venue. It is also worth noting that the proportion of a cascade of enterprises in Shandong Province is relatively high. I guess so, because Shandong is a province with low-speed electric vehicles. After the use of power battery ladders, it may be in low-speed electric vehicles or distributed small-scale storage. There are many applications in the field of energy, and it is more suitable. Therefore, the utilization and distribution of the ladders in Shandong are relatively large. I will put my revised PPT online for your reference. This is mainly for some enterprises that use the ladder utilization project. We can see that there are more applications in the OEM and battery plants.

The next step is mainly the recycling company that recycles and reuses. It can be seen that there are mainly recycling companies and material companies. From the location, it can be seen that the provinces of Hubei, Hunan, Jiangxi, Guangdong, and Anhui are similar to the provinces with more existing enterprises, and the eastern and central regions are more.

Let's briefly introduce the existing recycling model. I think that the recycling model is mainly divided into two categories. One is the more popular recycling model in the form of sales and car-electricity. This recycling mode is the first. The first is the most traditional and the most core. PACK factory is a recycling model, because the automakers themselves have no recycling technology and capabilities, so generally they retired batteries, we know the battery, generally they will directly commission the PACK factory, or where to buy, and then from where Going back, it will eventually fall to the PACK factory. The PACK factory itself is a group of companies, which itself has a group of technologies, and can obtain the corresponding data from the OEM, it can use these batteries for some steps, which is the case. However, we can see that this situation is actually more from the circulation link, and once there is some separation or poor communication between the PACK plant and the OEM, it will cause the logistics and information flow to be cut. The stability of the later stages will have a certain impact.

Next is the form of industry alliance. Now it is mainly in the primary stage in our country. We know that many industry alliances have been established recently. For example, in January of this year, the China Battery Power Battery Industry Alliance Power Battery Recovery Branch was established. It is similar to in the form of industry alliances. This form of industry alliance was originally matured in Germany. Germany has a complete management of the entire recycling system and battery through an industry alliance, and the efficiency is also very high. In this case, all companies form an industry alliance to screen and distribute power batteries through the industry alliance platform to form a closed loop. However, I think that there is a problem in China. Compared with Germany, we know that the amount of power batteries in Germany is far lower than that in China. Now China’s new energy vehicles account for 50% of the world, Germany. The amount is very low. The second German region is relatively small. From a management point of view, it can be managed one by one through a coalition. If it is like domestic, we know that power batteries, especially decommissioned power batteries, are very troublesome in the circulation of transportation. It is difficult for an industry alliance to manage all such large places in China. There may be several alliances to form a pattern dispute, which I think is not a good state of utilization of the overall social efficiency.

The next step is to focus on the recycling of third-party companies. Now many ladder companies and dismantling companies are looking for some channels to carry out this layout, whether they are looking for car companies or building their own scrapyards and they cooperation with some battery companies to build such channels themselves. From their point of view, they can effectively obtain batteries, but from the perspective of the whole industry or society, so many enterprises, so many channels, will cause repeated construction of channels, which will also make social efficiency and reduced utilization.

The next step is in the form of car-electric separation and power battery rental. Its core is a unified battery operator that operates the overall recovery of the power battery in this mode. The core of it is that I don't classify the actual use of the power battery. I only manage the entire life cycle of its use. Battery operators can get data from battery production until final disappointment, all the processes used, and how they can be used to better plan battery usage and extend service life. But it is also problematic. Now we know that there will be some car-electric separation at the beginning of the new energy vehicle, or use the battery as the core of the power-changing mode, but why failed, because the market capacity at that time and the market density does not reach the scale of reasonable operation. Since last year, BAIC New Energy has restarted this mode of power exchange. This is a premise. It is based on taxis. I concentrated on thousands of taxis in one location to ensure the capacity and density of the market itself. Understand that they now have revenue of about 2 million Yuan per year, and through their improvement, the battery rate of backup power is 1:1.2, but in this case, this form is difficult to promote on the consumer side, because breaking the existing sales model of new energy vehicles, the final core is still in the OEM. On the other hand, it is the requirement of the battery qualification operator, because there is also the capacity of the backup power. If you buy the battery for long-term lease, the financial pressure of itself is relatively high. But from a social point of view, I think that the form of car separation and leasing is a better choice for consumers, because we know that the new energy car power battery is a high proportion, consumers only need to use it, and There is no need to buy, and there is no need to repair the battery, so I think it may be better to separate the car.

I have just analyzed several situations. In fact, power battery recycling still needs to be improved from the whole industry. There are still many problems in terms of market size and national policy formulation. The recycling model is now in the process. Exploring each other, from the results of corporate feedback, everyone is now exploring, so we will follow their own steps. Once the market is up, there will be an effective way to promote this industry.

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