Why recycle batteries this year when the power battery retirement boom is in its infancy?

As the tide of mass decommissioning of electric vehicle batteries in China draws near, battery recycling and terracing, the last kilometer of new energy vehicles, will become the next blue sea. But how to tap into the huge business opportunities in decommissioned batteries?

Why recycle batteries?

The electric car industry has grown rapidly in the past few years. With that comes a huge increase in the demand for raw materials for batteries. Cobalt and nickel are the most scarce resources in power cells. Nickel prices have doubled from lows since 2016, while cobalt has more than tripled. Half of the reserves of cobalt are in Congolese gold, where the political situation is extremely unstable. The incident of manual mining child labor and the rumored windfall tax have seriously affected the stability of cobalt prices and the investment plan for corporate mining. In the face of soaring prices of scarce resources and uncertain production, it is particularly important to obtain resources from battery recycling.

Second, from an environmental point of view, used power cells contain a large amount of heavy metals and organic matter, electrolytes and the toxic gases produced by their converts, which will seriously threaten the environment and human health. Therefore, whether from the perspective of economy, resource safety, or environmental protection, power battery recycling has great value and necessity.

Power battery retirement is in its infancy this year.

According to industry calculations, starting in 2018, China's new energy vehicle power batteries will enter a large-scale decommissioning phase. Retired power lithium batteries will reach nearly 12 GWh. In 2020, the power battery recovery will be close to 25 GWh, and by 2022, the power battery recovery will be close to 45 GWh. In terms of metal-containing value, the domestic power battery recycling market will exceed 10 billion yuan in 2022, and the future will continue to expand with the growth rate of the electric vehicle industry. However, the recycling network of domestic power cells as a whole is still very imperfect.

What would be the battery recycling model?

With reference to Japanese experience, since 1994, Japan has gradually established a battery recycling system for "battery production-sales-recycling-recycling". It is stipulated that the car dealer is responsible for the free recycling of used automotive batteries to the community, and the automobile battery manufacturer is the main person responsible for the recycling of used batteries. After the manufacturer collects the used batteries from the dealer, it is transferred to the used battery processor for recycling. In the United States, although there is no federal level regulatory policy, Tesla has worked with the battery recycling company Kinsbursky Brothers to recover batteries in North America and Europe respectively.

In its current domestic policy direction, China's recycling model would be an industry-led alliance between Japan and Tesla.

In February 2018, the seven ministries and commissions led by the Ministry of Industry and Information Technology issued the "Interim Measures for the Management of the Recovery and Utilization of New Energy Vehicle Power Battery", proposing the implementation of the extended producer responsibility system, placing automobile production enterprises at the top of their responsibilities, and also encouraging automobile and battery production enterprises. The recycling and dismantling enterprises of end-of-life automobiles and the enterprises of comprehensive utilization have jointly established recycling channels.

At present, the form of the alliance is gradually formed: such as the Bonp, which was acquired before the Ningde era, is recycled; Green and BYD and Dongfeng establish recycling cooperation; Beiqi established an alliance with Zhangzhou Haopeng. These alliances will lay the groundwork for a future industry model for power battery recycling in China.

Echelon utilization is crucial.

From the perspective of resource utilization, the direct recovery of retired batteries as raw materials is actually a disguised loss. When the utilization cost of the power cell is 1,000 yuan per kilowatt-hour, the service life exceeds 1,000 times, and the cost is more than that of the lead-acid battery. In the "Interim Measures for the Recovery and Utilization Management of New Energy Vehicle Power Battery", it is also proposed that the utilization of used power batteries should follow the principle of first step utilization and then recycling.

Ladder utilization is the transformation of automotive power batteries with a capacity of less than 70-80 %, and the use of energy storage and low-speed electric vehicles. We believe that terracing can not only further reduce the cost of batteries from the business model, but also reduce the cost of energy storage batteries, and also promote more storage applications and markets.

Pilot use of the international ladder

Different energy storage scenarios require different batteries. Therefore, the scenarios and business models suitable for decommissioned power cells are the next difficult problem to explore. Like recycling, some innovative attempts to shave overseas have great implications for the fledgling domestic market.

FreeWire of the United States has launched an electric car mobile charging station called Mobi. The product is made of batteries from used electric vehicles and can store 48 kWh of electricity, which exceeds the battery capacity of most electric vehicles currently on the market.

Nissan Motor Co., Ltd. and Sumitomo Business Co., Ltd. established a joint venture in 2010 to establish 4RENGE Co., Ltd., which is committed to realizing the secondary commercial use of Nissan Leaf's lithium batteries. The company recycled used batteries from leaf vehicles in the Japanese and American markets for residential and commercial energy storage equipment.

In Europe, Younicos recycled batteries to build virtual power plants that combine distributed energy, and will participate in the setting of electricity prices in an FM market. The German Bosch Group used BMW's ActiveE and i3 pure electric car end-of-life batteries to build a 2MW/2MWh large photovoltaic power station energy storage system.

In addition, Tesla has also deployed services such as grid-level energy storage applications, home energy storage walls, and solar energy storage. These futures are also scenes of potential echelon use.

Factors restricting the use of Chinese energy storage industry and terraces

At present, the echelon use energy storage system has been able to achieve the 1 yuan / Wh era. However, it is not yet possible to promote it on a large scale in China. The main reasons are:

1) Batteries have not yet entered the phase of mass decommissioning, so there are currently very few batteries that can be used step by step; 2) Early power battery performance, quality and cost are not as good as today's batteries. In addition, due to the lack of reference data caused by the rapid progress of power batteries in the past few years, the uneven performance and specifications of retired batteries, and the high difficulty of testing ratios, making it difficult to use the market for the current echelon; 3) The relevant industry supporting policies have not yet landed. For example, China's time-sharing pricing has not been implemented nationwide, so that the economic benefits of energy storage batteries can not be maximized. Therefore, most of the current echelon utilization projects of power are in the exploration and verification stage.

However, with the improvement of battery performance and the drastic reduction of cost, the value of current and future power battery echelon utilization is greatly enhanced. At the same time, we are beginning to see a determination on the part of large corporations to push this area forward. At the beginning of this year, the China Tower and 16 new energy companies such as Chongqing Chang 'an, BYD, and Yinlong New Energy Co., Ltd. signed the "Strategic Partnership Agreement for the Recovery and Utilization of New Energy Vehicle Power Battery" to explore the use of power batteries.

The current market conditions, ternary batteries are more suitable for resource recovery, iron phosphate batteries are more suitable for echelon use.

In the current upstream material prices continue to rise, ternary battery recovery returns are very high. At present, the cost of recovery of ternary batteries is about 15000-20000 yuan/ton, and the recovered and dismantled metal materials can be sold to 42,000 yuan at the current resource price. Due to resource price factors, the recycling value of lithium iron phosphate is very low. However, its own capacity retention rate and electrolyte retention rate are higher than those of ternary batteries, and the frequency of impulse storage is higher, safer, and the use value is higher. At present, lithium iron phosphate batteries have limited room for improvement in performance and cost, so lithium iron phosphate batteries should precede and be more suitable for applications in the terraced energy storage industry.

The page contains the contents of the machine translation.