Author: Su Qin
Under the promotion of the “dual carbon” goal, the direction of the whole lifecycle decarbonization and carbon reduction of the new energy vehicle industry is becoming increasingly clear. The demand for raw materials of power batteries in the entire new energy vehicle industry is becoming increasingly large, especially for lithium, nickel, and cobalt, which have surged to sky-high prices, accelerating the construction of power battery recycling and utilization system, making power battery recycling and utilization become the next trend of the industry.
In 2019, Nobel Prize in Chemistry laureate Stanley Whittingham stated that in the next 5-10 years, the raw materials currently used to produce lithium-ion batteries will be depleted. If they cannot be recycled, it will cause waste, and the price of lithium-ion batteries may rise in the future. Therefore, battery recycling should be planned in advance.
This prediction has indeed come true. This year, the price of lithium carbonate has increased by 12.5 times, reaching 500,000 yuan per ton. The waste of lithium iron phosphate has increased by 31.8 times this year, reaching 82,000 yuan per ton.
In addition, at the 2022 World Power Battery Conference held on July 21, Ningde Times Chairman Zeng Yuqun, as the “big brother” of the battery industry, stated in his speech that the upstream raw material price increase has increased costs, bringing short-term challenges to the power battery industry chain. But mineral resources are not the bottleneck of industry development.
He also said, “Most molecular materials in the battery can be reused. Currently, our recovery rates of nickel, cobalt, and manganese have reached 99.3%, and the recovery rate of lithium has exceeded 90%. By 2035, the recycling of retired battery materials can meet most of the market demand.”
This was also questioned by personnel from Tianqi Lithium, the “lithium king”, who believed that lithium recycling is theoretically possible but has not yet been implemented on a large-scale commercial basis, and that the lithium recovery rate of Ningde Times, “may be feasible in a laboratory setting, but not yet in commercial practice.”
Regarding the arguments of both sides, some people pointed out that “technically, a recovery rate of 90% can currently be achieved, and this technology can also be commercially applied. However, the biggest challenge of power battery recycling is the market mechanism, difficulty in recycling, high cost, and recycling channels.” What is the truth?
According to the “Research on the Prospects and Countermeasures of China’s Electric Vehicle Industry”, which shows that in 2018, the power batteries for new energy vehicles had already entered large-scale retirement, and by 2020, it will exceed 200,000 tons. Calculated with a 70% step utilization, nearly 60,000 tons of batteries need to be scrapped.The data shows that the scale of retired lithium-ion batteries is expected to reach 780,000 tons in five years, and it is predicted in “Bao Wei” that the global retired lithium-ion batteries will reach 12 million tons by 2030. How to properly deal with these “useless” batteries will not only be a problem for new energy vehicle companies.
Generally, the service life of a battery is 5-8 years. If it exceeds the time limit, it needs to be “replaced”.
China’s large-scale production of new energy vehicles began around 2014, so the first batch of power batteries that have reached the critical point of elimination has been already phased out. In addition, with the increasing number of electric vehicles in recent years, the number of retired batteries has gradually increased.
For “useless” power batteries, recycling and reuse is the best solution for power battery processing, which can be divided into three stages: legal recycling of retired power batteries, “cascade utilization”, and “regeneration utilization”. At present, the main way of retired power battery disposal is still dismantling and recycling.
At present, there are three mainstream recycling technologies for retired batteries: physical (dry) recycling, chemical (wet) recycling, and thermal recycling.
Chemical recycling mainly includes chemical precipitation, solvent extraction, and ion exchange. Although the process is complicated and the reaction speed is slow, the advantage is that the equipment requirements are low and the product purity is high. Thermal recycling includes mechanical sorting and high-temperature pyrolysis, which can directly realize the recovery of various battery materials or valuable metal materials. The process is simple, but there are problems such as low recovery rate, high energy consumption, and pollution.
Through the technology of physical recycling process, the dismantling cost of retired ternary lithium batteries and lithium iron phosphate batteries is an average of 13,264 yuan and 8,364 yuan per ton, respectively. The benefits are 16,728 yuan per ton and 7,703 yuan per ton, respectively, leading in benefits among the existing processes. However, these data are only achieved under ideal conditions.
In reality, the recycling of power batteries mainly depends on the content of high-value metals such as nickel, cobalt, manganese, and lithium. Although there are calls for “battery recycling”, many scrap dealers said, “I can handle lead-acid batteries myself, just open them up and take out the lead plates inside. I don’t know how to deal with lithium batteries, so I don’t recycle them.”
In theory, the technology for recycling and processing power lithium batteries is indeed much more complicated than that for small batteries. It involves disciplines such as chemistry, electrochemistry, materials science, etc., and needs to consider many issues such as diverse service time and application models. Many encapsulation fixtures are required for dismantling, and it is difficult for enterprises to achieve large-scale batch dismantling, which brings inconvenience to “cascade utilization”.From the perspective of environmental protection, the dismantling process of power lithium batteries involves heavy metals, organic electrolytes, and other substances. In addition to the high energy of the battery pack itself, potential problems such as short circuiting and leakage exist, leading to incidents such as fires or explosions and resulting in personal injury and property damage.
Moreover, retired power lithium batteries still maintain 70%-80% of their initial energy. If directly dismantled, waste will be generated. Therefore, a cascading utilization approach can be chosen.
According to GGII statistics, in 2017, the nationwide cascading utilization and dismantling of scrapped lithium batteries totaled 83,000 tons, with the proportion of scrapped batteries reaching 95%. Therefore, the proportion of cascading utilization is not very high.
The main reasons for this low utilization rate are as follows:
First, retired batteries suffer from poor consistency, low quality, and lack safety and stability features. Voltage standardization also requires high levels of technical skill.
Second, the amount of discarded power batteries has been small in the past, leading to low matching.
Third, the technology for cascading utilization of power batteries is not mature, and the market space for energy storage and reuse has not yet been fully exploited.
From an economic perspective, cascading utilization is the most economical and environmentally friendly way to recycle batteries. Although the activity of power batteries decreases after retirement, their chemical costs have not changed. Their charging and discharging performance simply no longer meets the requirements of vehicles. They are still stronger than other old power batteries and can be used in low-power contexts such as energy storage devices for households, mobile power sources, and emergency power sources.
Looking at the profit side, currently, the recycling of discarded batteries is calculated by weight, while the renewable use of retired batteries is calculated by kilowatt-hours. The quotation for recycling must consider factors such as the duration of use of power batteries and their degree of attenuation. When the power battery does not bulge, the recycling price of 1 kWh is between 160-350 yuan. Assuming a power battery of a 60kWh electric vehicle retires, and the recycling price is calculated according to 200 yuan/kWh, the price is 12,000 yuan. From the perspective of cascading utilization, recycling 1 ton of retired lithium iron phosphate batteries costs 8,540 yuan, but the return on regeneration is only 8,110 yuan. Thus, the actual loss is 430 yuan.
This type of stable loss not gain transaction has caused the power battery industry to have a situation where “upstream can’t find a seller, and downstream can’t find a battery.”According to incomplete statistics, the planned production capacity of China’s leading battery companies is expected to reach 2,500 GMH by 2025, which is 16 times the installed capacity in 2021, and can support the production of approximately 56 million EVs annually. It proves that the power battery market is not lacking in batteries, but rather shows a trend of power battery overcapacity, which is ultimately due to inadequate market mechanisms.
It is understood that the number of registered power battery recycling companies has increased from 300 in 2007 to nearly 3,000 in 2021. However, only 45 companies have released the “Comprehensive Utilization Industry Specification for Waste Power Batteries of New Energy Vehicles” from 2018 to 2021. More than 150 companies are using the battery in a cascading manner. The rest of the retired batteries still flow into the small workshops, and even the power battery recovery stations collected by regular outlets only account for about 20% of the entire market.
Currently, many scrapped new energy vehicles do not enter the channels of 4S stores, but flow into the scrap market, where they are dismantled and sold to small workshops for recycling at low cost and high prices. This has caused the power battery market to lose control. Even though more and more regular enterprises are layouting power battery recycling in the industry, compared with these small workshops, the refurbishment costs are higher, and they can not provide high prices for recovery, thus unable to obtain batteries.
To address this issue, China has taken corresponding regulatory measures. During the National People’s Congress in March 2022, several representatives expressed their views on battery recycling, and suggested to regulate the lithium battery recycling and utilization market, avoid inferior waste batteries flooding the market, clarify the law enforcement subject, improve the comprehensive law enforcement mechanism, and ensure the safety of the whole process from production to recycling of power batteries. According to the announcement from the Ministry of Industry and Information Technology on August 3, they will strengthen the construction of the power battery recycling and utilization system and study the management regulations for recycling.
Due to the lack of a corresponding pricing mechanism for power battery recycling in China, many small workshops are able to obtain high profits at a low investment through market bidding. As the main body responsible for battery recycling, many automobile manufacturers, such as Tesla, have launched battery recycling services in the Chinese market and promise to recycle and utilize lithium-ion batteries 100%. In addition, international car companies such as Volvo, Nissan, Honda, and BMW also have similar measures. However, in the practical process, there is a lack of power, resulting in the set-up outlets of automobile companies not functioning as they should.
Finally, how can we define the whole lifecycle of power battery recycling? Obviously, it should not end with retirement from the car, because the varying standards and models of power batteries have brought great difficulties to recycling and cascading utilization.Moreover, the current regulation on retired power battery management is still in blank period, allowing lawless elements to seek huge profits and causing chaos in the recycling of power batteries in our country. Therefore, the car manufacturers should take the initiative and actively shoulder their responsibilities by providing active power battery coding to prevent the gray area from emerging.
As surveys have shown, coding system is not only effective in vehicle management, but also in cascade utilization and scrap recycling. For example, retired batteries need to be tested before use. If the entire package is disassembled for testing, it will not only be costly, but also reduce the utilization rate and price of retired batteries. With the current technology, if the unqualified battery cells can be found through coding, and the charge and discharge of the battery cells can be shielded with corresponding technology, the bad battery cells can be screened out.
In addition, it is urgent to contain the chaos in the recycling of retired batteries. The regulatory standards related to the recycling of power batteries need to be strengthened by relevant departments, and the punishment for violators needs to be increased. The industry also needs to take its own responsibilities, continue to research and develop new battery cracking technologies and form a complete closed loop for the power battery industry.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.