Current situation, cost economy, process and development of lithium battery recycling

Overview of lithium battery recycling:

The normal service life of new energy vehicle batteries is generally 5-8 years. If electric vehicles are mainly used for Didi or taxi rides, they will be retired in no more than three to four years. The disposal of retired car batteries can be divided into two ways: one is to test the lithium batteries after retirement, and the batteries that pass the test can be reused in stages, and the other is to physically disassemble and reuse the products that fail the test.

In recent years, with the continuous efforts of national policies, the new energy vehicle and energy storage markets have shown a rapid growth trend, and power batteries have also become the "pigs on the wind", making rapid progress. According to the usage cycle of new energy vehicles and the marketization process of new energy vehicles in China, the wave of scrapped power batteries is about to begin, which will drive the lithium battery recycling industry into an accelerated period of development. According to data, it is expected that by 2030, the recycling volume of lithium-ion batteries in China will reach 6.028 million tons, and the market size will exceed 100 billion yuan. The lithium battery recycling industry, which is at the forefront of the trend, is facing the current situation of wind lithium battery recycling

Such a huge market size has attracted tens of thousands of enterprises to enter one after another. As of April 2024, the Ministry of Industry and Information Technology has announced a whitelist of 156 enterprises that meet the industry standards for the comprehensive utilization of waste power batteries (i.e. the "regular army" of power battery recycling), but there are 120000 enterprises engaged in power battery recycling that can be found on the Enterprise Check platform alone.

The regular army plays a crucial role in the field of power battery recycling. They have professional equipment, advanced technology, and strict environmental standards to ensure safe and environmentally friendly disposal of waste batteries. However, due to high recycling costs and difficult profitability, regular military forces face significant challenges in the market.

At the same time, black workshops have gained a foothold in the market by recycling at low prices and selling at high prices. They often lack necessary environmental protection equipment and professional knowledge, and dispose of waste batteries through violent dismantling, illegal dumping, and other methods, seriously polluting the environment and endangering people's lives and health. What is even more worrying is that these black workshops often refurbish the recycled batteries and re-enter the market, posing great safety hazards to consumers.

With the rapid development of the new energy vehicle market, the retirement issue of power batteries is becoming increasingly prominent. However, behind this seemingly prosperous industrial chain lies the chaos of power battery recycling. The struggle between the "regular army" and the "black workshops" is becoming increasingly fierce. Who can dominate the ups and downs in this game?

What are "Xiang", "Feng", and "Wind Speed"?

Lithium battery recycling cost:

(1) Legitimate enterprises ":

The cost of raw materials almost determines the total recycling cost of "legitimate enterprises". The total cost of battery recycling for "legitimate enterprises" mainly consists of raw material costs, fuel costs, environmental governance costs, auxiliary material costs, labor costs, equipment depreciation costs, dismantling costs, land leasing costs, product inspection costs, electricity costs, and other expenses. Among them, raw materials account for the largest proportion, reaching 75% -90% (PS: the fluctuation range comes from the price fluctuations in the upstream raw material market and the cost structure differences of different recycling sub technologies (wet and dry)).

Dry recycling:

The dry recycling process technology has high requirements for the recycling environment, which leads to high environmental related costs. Due to the relatively high requirements for the quality of lithium battery recycling sites and property management in the location, the use of dry recycling technology for the regeneration and recycling of lithium batteries incurs relatively high site costs, shared costs, taxes, and other expenses. According to public information, whether it is using dry recycling technology for the regeneration and recovery of lithium iron phosphate batteries or ternary lithium batteries, other expenses account for about 35% of the total cost except for raw material costs, and the total cost is second only to raw material costs.

Wet recycling:

The cost of auxiliary materials is the main cost in the non raw material cost of wet recycling. Due to the relatively high amount of auxiliary materials such as acid-base chemical reagents, precipitation reagents, and catalytic reagents required for the recycling of lithium batteries using wet recycling technology, the cost of auxiliary materials required for the regeneration and recycling of lithium batteries using wet recycling technology is relatively high. According to publicly available information, when using wet recycling technology to recycle lithium iron phosphate batteries and ternary lithium batteries, the proportion of auxiliary material costs to the total cost excluding raw material costs is about 30% and 42%, respectively, second only to the total cost of raw materials.

(2) 'Military oriented enterprises':

The cost structure of "military oriented enterprises" is relatively crude and simple. The difference in cost structure between "military oriented enterprises" and "legitimate enterprises" is mainly due to the fact that "military oriented enterprises" usually use manual and violent dismantling methods to dismantle waste lithium batteries, and "military oriented enterprises" usually abandon key safety and environmental protection related processes such as quality testing, environmental protection treatment, discharge treatment, dust-free technology, and product verification. Overall, the cost structure of "military oriented enterprises" is only composed of raw material costs, fuel and power costs, labor costs, equipment depreciation costs, and other expenses. The costs of environmental protection treatment, product inspection, and lithium battery dismantling are almost zero. According to public information, the raw material cost of "military oriented enterprises" accounts for as much as 89% of the total cost, followed closely by other expenses at 5% of the total cost, followed by fuel and power costs and labor costs at 3% and 2%, respectively.

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