The peak of power battery retirement is approaching, can the recycling industry usher in a shining moment

With the booming development of the global new energy vehicle industry, the construction of a power battery recycling system has become an urgent task. As a city with a leading ownership of new energy vehicles, Shanghai's power battery recycling has become a hot topic of discussion among many representatives and committee members at the recent Shanghai Two Sessions.
The recycling of power batteries is a key issue that must be faced in the high-quality development of new energy vehicles. Studies have shown that the market is about to usher in a peak of power battery retirement by 2025.
In recent years, the domestic power battery recycling industry has grown rapidly, but there are also some irregularities. For example, the level of technology constrains the scale of the industry and also brings significant safety and environmental hazards.
The reporter learned during the interview that there is still a lot of room for improvement in the existing power battery recycling technology, and relevant policies also need to be improved.
How to help upstream and downstream enterprises in the power battery industry chain effectively implement the 'producer responsibility system' to achieve carbon reduction in the industry chain, as well as how to utilize and extract the last bit of value of power batteries, reduce resource waste and environmental pollution, are all issues that recycling enterprises should consider, "Yan Chao, General Manager and Secretary of the Board of Beijing Changjiu Logistics Co., Ltd., told Securities Daily reporters.

2025 is a critical milestone
2025 is a critical milestone for the retirement of power batteries. The current peak of power battery retirement refers to the small peak that will occur from 2025 to 2027. It is expected that there will be another wave of retirement peak from 2030 to 2032, "Zhao Xiaoyong, General Manager of Beijing Sedmei Resource Reuse Research Institute Co., Ltd., told reporters frankly.
Zhao Xiaoyong introduced that from 2018 to 2020, there were approximately 4 million new cars equipped with power batteries. According to the average lifespan of power batteries from 5 to 8 years, the retirement time of these vehicles' power batteries is between 2025 and 2027.
The power battery is regarded as the "heart" of new energy vehicles. Usually, when the battery capacity decays to below 80% and cannot effectively meet the needs of new energy vehicles, it is necessary to recycle it. According to the China Academy of Commerce Industry Research, China's retired power batteries will reach 1.04 million tons by 2025 and 3.5 million tons by 2030.
In response to the peak of power battery retirement, the Ministry of Industry and Information Technology issued the "Industry Standard Conditions for Comprehensive Utilization of Waste Power Batteries in New Energy Vehicles (2024 Edition)" (hereinafter referred to as the "Standard Conditions") in December 2024, which will be implemented from January 1, 2025, aiming to further strengthen the comprehensive utilization of waste power batteries in new energy vehicles and promote green and sustainable development of the industry.
At present, the recycling of retired power batteries mainly includes two methods: recycling and cascading utilization. Among them, recycling is to extract metal materials such as cobalt, nickel, and lithium from batteries to recover valuable resources; cascading utilization is to disassemble and reassemble batteries and apply them to fields that do not require high battery energy density, "said Bu Yili, a researcher at Shenzhen Qianhai Drainage Network Fund Sales Co., Ltd.

The main source of retired power batteries is operating vehicles, such as buses, short distance logistics vehicles, and ride hailing vehicles. The recycling method is mainly through bundled bidding, which is equivalent to price competition. Gu Ning, Deputy General Manager of Changjiu Logistics New Energy Business Unit, said that with the upcoming peak of private new energy vehicle scrapping, 4S stores may become an important port for retired power batteries.
Still in the stage of savage growth
Wang Xiaokang, President of the China Industrial Energy Conservation and Clean Production Association, stated at the 2024 New Energy Battery Recycling Conference that it is expected that by 2030, the market size of power battery recycling in China will exceed 140 billion yuan, an increase of about 9 times compared to the actual market size in 2022.
The vast blue ocean market has attracted the influx of many enterprises and capital, making the power battery recycling industry a mixed bag of good and bad. Around 2021, with the rapid rise in lithium prices, many "small workshops" with extensive operations emerged in large numbers. These "small workshops" often have strong concealment, difficult supervision, and prominent safety hazards, which have brought many troubles to the development of the entire industry.
He Li, fund manager of Beijing Zhi Yu Zhi Shan Investment Management Co., Ltd., admitted that due to poor recycling channels, the battery recycling rate of formal recycling channels is relatively low, and a large number of waste batteries flow into informal channels, which not only affects recycling efficiency but also increases safety and environmental pollution risks.
The emergence of a large number of non-standard enterprises such as' small workshops' has directly led to the 'food shortage' of standardized enterprises. Zhao Xiaoyong further stated that as of the end of 2024, there were over 100000 registered power battery recycling enterprises in the market, but only over a hundred standardized enterprises. This means that regulated enterprises not only compete for resources with each other, but also compete for resources with non-standard enterprises.
Zhao Xiaoyong believes that with the arrival of the peak of power battery retirement, the wild growth of the power battery recycling industry will be reversed. There are differences in technological content and environmental protection between standardized and non-standard enterprises. In the future, the industry will move towards a healthy development trend, market concentration will further increase, and leading enterprises will be more competitive
The relevant person in charge of Greenmei Co., Ltd. told the Securities Daily reporter that the recycling of power batteries is not just about completing the recycling step. The real thing to do is to recycle and dismantle them for resource utilization, that is, to extract valuable elements from scrapped batteries for remanufacturing. This is the ultimate problem and the most meaningful key step. "Enterprises need to have super strong chemical smelting capabilities, which is the key to resource remanufacturing of scrapped batteries

In the core material sector, fluctuations in upstream lithium prices also affect the development of the power battery recycling industry. Since the beginning of this year, due to the significant decline in lithium prices, recycling sites in the downstream industry chain have faced financial pressure, and the enthusiasm of recycling manufacturers is generally not high, "said Duan Zhiqiang, founder of Suzhou Wanchuang Financial Consulting Co., Ltd.
The decline in raw material prices has also led to a decrease in the price of new power batteries. In the short term, this has affected the cost-effectiveness of products that are used in a tiered manner, resulting in a lack of market competitiveness. However, in the long run, the raw material metals for battery production are still relatively limited, and from the perspective of sustainable development and producer responsibility, the demand for power battery recycling will only become increasingly urgent, "said Yan Chao.
Promote standardized development
Promoting the standardized development of the battery recycling industry has been a consensus among both upstream and downstream industries in recent years.
In order to guide the development of the industry, since 2018, the Ministry of Industry and Information Technology has successively released five batches of enterprise lists that meet the "Industry Standard Conditions for Comprehensive Utilization of Waste Power Batteries in New Energy Vehicles", commonly known as the "white list" in the industry. After the release of the fifth batch of lists in November 2023, the number of companies on the "white list" for power battery recycling has reached 156. From the perspective of enterprise declaration types, the number of enterprises with hierarchical utilization is the highest, accounting for about 60%, and there are about 10 enterprises with both recycling and hierarchical utilization types.
At present, the main players in the domestic battery recycling market can be divided into three categories: first, vehicle manufacturers represented by BYD Co., Ltd; The second is battery companies represented by Ningde Times New Energy Technology Co., Ltd; The third is battery recycling companies represented by Greenmei and others.
Overall, the processing capacity of the industry matches the amount of retired batteries, which means that there are many power battery recycling manufacturers outside the 'whitelist', and the market competition is very fierce. Duan Zhiqiang said that currently, formal recycling sites are relatively scattered and few in number, and the business model is not very clear, which is a major problem restricting power battery recycling.
Waste power batteries themselves have certain safety hazards and are not suitable for long-distance transportation. Therefore, many entities that possess these waste resources hope to find qualified recycling enterprises nearby, but the efforts of some legitimate enterprises in this regard still need to be improved, "Duan Zhiqiang further stated.
Currently, it is also common to use unqualified and non compliant transportation to transport power batteries. Yan Chao believes that compliant logistics transportation is one of the most important foundations for the traceability of retired power batteries, and clear battery flow is also an important prerequisite for the construction of the recycling system.

The management and traceability of all aspects of the life cycle of power batteries is a common call from the industry for the standardization of power battery recycling. In December 2024, at the "2024 China Battery ID Achievement Conference", 16 enterprises in the entire battery industry chain related to mining, material production, battery production, automobile production, scrapped vehicle dismantling, and comprehensive utilization received the first batch of Chinese battery ID digital identities.
Allowing power batteries to have their own 'ID card' is not only beneficial for industry standardization, but also for China's power batteries to enter overseas markets, "Zhao Xiaoyong said. This is the direction of industry development.
In the future, the government may introduce more policies, such as improving access mechanisms, regulating battery recycling, etc., to promote the standardization and healthy development of the industry. He Li believes that for recycling companies, due to market barriers such as scale, technology, and channel barriers, they still need to establish diversified recycling channels and networks, reduce dependence on a single channel, and improve the recycling rate of waste batteries.