Power battery "retired period" significant business opportunities for new energy companies to seize the beach recycling market

On March 9, China's battery manufacturer camel shares announced that the company plans to invest 5 billion yuan to build a camel group power battery step utilization and regeneration industrial park project. If all production is completed, it is expected to form an annual recovery and treatment in 2025 of about 30 Million tons of waste power battery capacity, and the corresponding cathode material production capacity, to achieve an annual output value of about 7.5 billion.

This is not the first case involving power battery recycling. In fact, the first batch of new energy power batteries put into use in 2013 and 2014 will enter the “decommissioning period” one after another, driven by environmental protection requirements and policy specifications. The construction of a mechanism for recycling power batteries is increasing.

According to statistics from the China Association of Automobile Manufacturers, as of 2017, the sales of new energy vehicles in China reached 777,000 units, ranking the first in the world for three consecutive years, with an accumulated total of approximately 1.8 million vehicles, accounting for more than 50% of the global market. The rapid development of new energy vehicles has also led to a rapid expansion of the power battery recycling market. CITIC Securities expects that the recovery of power batteries will approach 40 Gwh by 2020, and that the recovery of power batteries by 2022 will approach 70 Gwh.

Faced with this market that has yet to be formed but is expected to exceed 10 billion yuan in size in the next four years, as the camel shares, more power batteries and related new energy companies, from the economic benefits and scarcity of resources, saw the power battery Potential business opportunities in recycling.

In fact, under the pressure of upstream raw material prices, and the pressure from downstream automakers to pass the “subsidy retreat”, power battery companies are seeking to break through the path of both ends of the squeeze, while the recycling of power batteries in the construction of a sustainable closed-loop industry At the same time, the chain may become a big cake for these companies to gain profits.

However, it is worth noting that the deputy director of the China Automotive Brand Research Center and the founder of Wenfeng Automobile, Zhang Zhiyong, told the Times Weekly reporter that “even if the future industry outlook can be expected, at this stage, battery recycling is not a profitable one at first. The market is a foundation for the continuous operation of the front end of the industry chain."

New market opportunities

Unlike traditional fuel vehicles, new energy vehicles are powered by batteries made of trace elements such as cobalt, nickel, manganese, and lithium. The domestic power battery is mainly a lithium-ion battery. Although it has the advantage of environmental protection and cleanliness, its batteries also have With the service life of the "trouble."

It is reported that when the battery capacity is attenuated to 60%-80% of the initial capacity, the effective service life of the design is reached and replacement is required. Therefore, the useful life of a passenger car battery is generally 4-6 years, and the electric commercial vehicle has a long mileage and a large number of charging times, and the useful life of the battery is only about 3 years.

This means that the domestically-used new energy vehicles in 2014 will gradually usher in the “retirement period” of power batteries in 2018. A research report released recently by CITIC Securities pointed out that in view of 2014-2017, domestic shipments of power batteries were 5.9GWh, 7.0GWh, 30.5GWh, and 39.2GWh, respectively, and CAGR is still expected to maintain over 30% in the next three years. It is expected that the recovery of power batteries will approach 40 Gwh in 2020, and the recovery of power batteries in 2022 will approach 70 Gwh.

Calculated in accordance with the value of metals contained, 70Gwh will enable the power battery recycling market to exceed 10 billion yuan. This is undoubtedly an attractive market for power battery companies that urgently need to reduce costs.

In the announcement of the above camel stocks announcement, the company actively involved in the recycling of lithium batteries in 2017, and the Power Battery Recycling Industrial Park will form a “double closed-loop” industrial chain of automobile battery recycling and power battery recycling together with the company’s existing business. The company will achieve green and recycling development in the new energy industry.

In fact, with the expansion of the power battery recycling market expected in the past six months, many leading companies have begun to increase the layout.

In August 2017, Guoxuan Hi-Tech announced that it has invested RMB 50 million in the production of cobalt products with Lanzhou Jinxuan. In Anhui and Gansu, two battery resource recycling technology companies, Anhui Jinxuan and Gansu Jinxuan, have been established to engage in power. Lithium battery recycling, dismantling and processing business, the cooperation between the two to achieve complementarity of the industrial chain, and then open up the link between lithium upstream raw materials and battery recycling.

In addition, as one of the few domestic companies that produce both power batteries and electric vehicles, BYD has also built a recycling chain within its internal system: through the Baolong factory, it cooperates with distributors to complete the removal, testing and reuse of decommissioned power batteries; The dismantling and recycling of used battery materials are completed through the Huizhou Material Factory.

In the era of Ningde, where the IPO has been around recently, the layout in the recycling field has been earlier. In 2015, Ningde Times obtained 69.02% of the shares of the subsidiary Ningde and Shengtuo, and obtained control of Guangdong Bangpu, the main business of dismantling the used lithium battery, and incorporated it into the scope of consolidation. In addition, a number of battery manufacturers and related companies such as GEM, Huayou Cobalt, and CNAC Lithium Battery are also actively deploying power battery recycling applications.

It is worth mentioning that power battery companies are eager to enter the recycling field, perhaps not only because of the good prospects for the recycling market, but also because of the profit pressure from the decline in profits caused by the increase in the cost of upstream raw materials in recent years. Guoxuan Hi-Tech reported in its performance report released on February 28 that the decline in company performance was due to the general decline in domestic power battery prices in 2017, while the price of upstream raw materials rose.

According to a research report released on March 13 by Essence Securities, the gross profit margin of Guoxuan Hi-tech's power battery business in the first half of 2017 was 37.91%, which was 10.8 percentage points lower than the 48.71% in 2016; Chengfei integrated lithium battery business in 2017 Gross profit margin in the first half of the year was 24.76%, which was 1.78 percentage points lower than the 26.54% in 2016. The gross profit margin of the first half of 2017 was 31.91%, which was 7.2 percentage points lower than 2016's 39.11%. .

Recycling market is booming

Although the power battery recycling market has broad prospects, Zhang Zhiyong told the Times Weekly reporter that today's market is still not a market, and the entire recycling system has not yet formed. “Some new energy vehicles will have a repurchase commitment when they are sold, but now they are In terms of energy, the number of new energy companies is relatively low, and there has not been a large number of battery scrap cases.

However, he also agreed that the construction of the power battery recycling system is very inevitable, the power battery is very polluting, improper recycling, whether it is to the society or the environment have great harm. Although in the long run, it is economically beneficial for companies to recycle raw materials during the production of batteries, at this stage, battery recycling is not a profitable market at first, but a letting. The foundation of the continuous operation of the front end of the industry chain.

Can not be ignored is that China's new energy vehicle power battery recycling does have many problems: recycling laws and regulations are not yet perfect, on the one hand, the government has not yet on the new energy vehicle power battery recycling special legislation; the other hand, the power The battery has not yet been standardized. The shape of the battery, the structure of the pole core, and the material of the housing are all different. This brings great difficulties for recycling. At the same time, the domestic recycling route for the power battery is still in the exploratory stage. The recovery technology of the target has not yet been implemented.

The industry generally believes that the recycling of waste power batteries, safe disassembling, environmental protection, ensuring product quality, and reuse technology are still common challenges faced by the industry. It is imperative to jointly establish a comprehensive recycling system, a standardized standard system, and a strong National Engineering Research Center to ensure the healthy development of the power battery recycling industry.

In fact, since the State Council issued the “Energy Conservation and New Energy Vehicle Industry Development Plan (2012-2020)” in 2012, relevant government departments have successively issued the “Guiding Opinions of the General Office of the State Council on Accelerating the Popularization and Application of New Energy Vehicles,” and “Electric Vehicles. There are many policy documents such as Power Battery Recycling Technology Policy (2015 Edition), “New Energy Vehicles Waste Power Battery Comprehensive Utilization Industry Specification Conditions,” and “Interim Measures for the Management of New Energy Vehicles Used Power Battery Comprehensive Utilization Industry Specification Notice”.

On February 26th a month ago, seven ministries and commissions such as the Ministry of Industry and Information Technology jointly issued the Interim Measures for the Management of Recycling and Utilization of Power Battery for New Energy Vehicles, clarifying the responsible parties for the recycling of new energy vehicle batteries, ie, who is responsible for the production and who is responsible for pollution. Who govern means that power production companies and car manufacturers have inescapable responsibility for the recovery of power batteries.

In response, Zhang Zhiyong analyzed that it is unrealistic to involve all the links in the industry chain in the construction of waste battery recycling channels. The government should strongly demand that vehicle companies take the lead, and “whole vehicle companies face consumers directly. It is the key link for the connection of new energy vehicle production and consumer use. It is also the most effective way for the whole vehicle company to dominate."

However, during the two sessions, Chen Hong, deputy to the National People's Congress and chairman of SAIC Motor Corporation, said that at the current stage, China’s power battery recycling policy system is not sound enough, and it is difficult for auto manufacturers to sell the power batteries of all vehicles sold from new cars to the end. Recovery of the entire life cycle management, "Recommended relevant departments to study the introduction of new energy vehicles, recycling qualifications, and gradually eliminate backward technology, environmental protection, non-compliance of enterprises."

In terms of the recycling of power batteries, the main aspects of current domestic industry exploration include cascade utilization, recycling, etc., which will soon be unsuitable for use in batteries for electric vehicles, and for ladders used in energy storage, low-speed electric vehicles, etc. Since then, they have been completely scrapped. The battery is transferred to the recycling process, such as dismantling, extraction of raw materials, and harmless disposal of waste.

It is worth noting that although there is already a lot of capital going into the recycling field, the current industry development point of view is not far from the maturity of the power battery recycling market. Zhang Zhiyong told the Times Weekly reporter that “whether the market can be shaped depends on the total amount of new energy vehicle market. If millions of production and sales are achieved every year, the maturity of the recycling market is not a problem, but in the next two or three years, Not yet this time."