Electric vehicles hot and lithium battery recycling is difficult to profit!

"Lithium-ion battery recycling is simply not profitable at this stage because of inadequate policy implementation and the lack of incentives. "

"Automobile Business Review" reporter Peiteng compiled

After years of recycling televisions and computers, a recycling plant in Shanghai is about to usher in a new batch of scrap: used batteries for electric vehicles.

The plant is part of the Shanghai Golden Bridge Group and its director, Liyingzhe, said the plant has been licensed and is upgrading its equipment to cope with the increasing number of used batteries.

"We believe there will be a big increase in the number of electric vehicles in the future. " he said.

Among the areas that Shanghai Jinqiao wants to enter are a number of Chinese companies -- such as Jiangxi Ganfeng Lithium Co., Ltd. and Shenzhen Green America High-tech Co., Ltd.

To improve the city's air quality and reduce its dependence on overseas crude oil, the government is planning to ban the sale of fuel trucks in the near future, which has greatly promoted the development of the Chinese electric vehicle industry and has given battery recycling companies hope.

Under the leadership of car companies such as BYD and Geely, sales of electric vehicles in China reached 507000 in 2016, up 53 % from a year earlier. At the same time, the government hopes to increase sales of electric vehicles to 2 million by 2020 and 7 million by 2025.

China's electric vehicle sales accounted for more than 40 per cent of the global market in 2016, followed by the European Union and the US, and China overtook the US as the world's largest market for electric vehicles, according to the International Energy Agency.

Affected by this, Chinese lithium battery production has also increased significantly. Chinese companies produced 6.7 billion batteries in the first eight months of 2017, up 51 per cent from a year earlier, according to data.

All this is likely to give China a leading position in the global electric-vehicle industry, as well as supporting businesses such as battery production and recycling.

The country has promoted electric vehicles since 2009, and next year's lithium battery waste will reach 170,000 tons as the first electric vehicles reach their useful life. Industry experts predict that number will continue to rise as sales of electric vehicles increase.

The disposal of these wastes will pose a considerable challenge to China.

Lithium batteries are not currently classified as hazardous waste and therefore do not need to comply with strict controls. Battery waste, on the other hand, contains heavy metals such as cobalt and nickel and other harmful residues, which, if not properly treated, can cause serious pollution to rivers and soils.

In spite of the challenges, battery waste also presents a great opportunity for China's fast-growing recycling industry.

In 2023, China's battery recycling market will reach RMB 31 billion, according to China autonomy innovation center, an industry think-tank.

Wang Chuanfu, chairman and president of BYD, once compared lithium, copper and cobalt extracted from waste batteries to treasures.

Today, big companies with high-tech recycling technology have begun to profit from it. Guojin Securities pointed out in an analysis that the stock price of Jiangxi Ganfeng Lithium Co., Ltd. has soared by more than 200 % this year.

Guojin also mentioned that Shenzhen Green Beauty Co., Ltd., which owns the world's largest used battery and cobalt nickel tungsten recycling base and China's largest automated battery dismantling factory, has also risen by more than 60 % in 2017.

Recovery challenge

Of course, the industry also faces many obstacles.

For many companies, the cost of recycling lithium batteries is very high. At present, the industry has not yet reached a unified standard for the large-scale treatment of used batteries, and profitability is a very difficult thing.

Some executives complain that the authorities have not adopted enough subsidies and environmental policies to boost the industry.

Zhangtianren, chairman of battery maker Tianeng Group, pointed out in the March proposal for the two sessions: "Accelerating the recycling of lithium batteries is an urgent matter and an important issue in the development of the new energy automotive industry. "

He argues that high taxes and rising waste disposal costs pose a big challenge to the commercial viability of the industry.

Zhangtianren pointed out in the proposal that in an ordinary recycling company, for example, the material extracted from a ton of lithium iron phosphate waste batteries is worth RMB 8,110, but the recovery cost is as high as RMB 8,540.

Automation of the recycling process is also a challenge in China because of the lack of product design standards, he added.

"The backwardness of equipment and technology has hindered the process of automation, which is more obvious in small enterprises." Xiao Hairu, chief engineer of Shenzhen Kelu Wisdom Industry Co., Ltd., said at the 2017 China Lithium Dioxide New Energy Industry Ecology Summit held in August.

At the same time, the government wants to turn China's battery recycling system into a standardized high-tech industry. Large battery manufacturers have been asked to set up their own recycling plants, and heavily polluting individual recyclers have been forced to close down.

The Chinese Ministry of Industry and Information Technology had asked the industry to introduce standardized design by 2020 and upgrade related technologies to the "international" level. The ministry is expected to release a new battery recycling code by the end of this year.

However, Zhangtianren pointed out that the relevant policies have not been effectively implemented, and those unqualified companies are not punished.

"Lithium-ion battery recycling is simply not profitable at this stage because of inadequate policy implementation and the lack of incentives," he said. "

Battery companies now bear the bulk of the cost of recycling, while car companies that are supposed to be responsible for battery recycling have opted for suppliers to do so.

Cheng Tianzhao, general manager of Shenzhen Chuangming Battery Technology Co., Ltd., said that recycling occupies the resources of battery manufacturers and is a great burden for them.

Chuangming Battery Factory in Dongguan can produce 300,000 lithium batteries per day and has a supply agreement with Geely. In order to coordinate resources, the company has entrusted the battery recycling business to another company, and for this reason, it is necessary to pay them a high annual fee.

"If we manufacturers are to meet our recycling obligations, the government must provide the necessary financial support. Cheng Tianzhao said so.

The page contains the contents of the machine translation.