Lithium battery recycling is an indispensable part of the completing the life cycle in the new energy vehicle industry, forming a closed loop of the industrial chain from production, sales, operation, after-sales services to recycling. For battery manufacturing companies, recycling contains business opportunities and also has a positive impact on its corporate social image.

In the context of the vigorous opening of the market space for new energy vehicle sales, the market for China's EV-Type LiB recovery has just begun. However, from the specific practice of the battery industry, the cost-side pressure is still high.

Dismantling and recycling has a high cash cost, in addition to the fact that ternary materials with dismantling value currently only occupies a relatively small proportion (accounting for 1% of the theoretically retired batteries in 2018). Also, because the market leaders are scattered, they obtain preferential bargaining power at the acquisition end.

The commercialisation process of echelon utilisation is still relatively slow, mainly because the consistency and safety issues of recycling batteries has not been resolved, which makes the establishment of a disassembling automation pipeline much more difficult.

The unstandardised development of the industry has caused the cost of re-use by enterprises to be continuously increased.

At present, the disposal of scrap EV-Type LiB in China is still in the market cultivation stage: the echelon utilisation is mainly based on the government-supported integrated energy storage system and new energy vehicle charging pile demonstration projects, and the dismantling and recycling is mainly based on small scale enterprises.

The future development trend is positive, and the pressure on the cost side of the market will be reduced during the gradual development of the industry in the future. In terms of echelon utilisation, with the EV-Type LiB coding system and battery specifications unified and standardised, and the popularity of PACK mode echelon utilisation, the difficulty of echelon utilisation will gradually decrease, and economic benefits will gradually become prominent; in terms of resource recycling, the proportion of ternary materials will gradually expand.

At the same time, the price of valuable metal raw materials has a clear upward trend, and the recovery efficiency will be significantly improved. At the same time, due to the industry's standardisation and the scale effect of leading enterprises' continuous deployment to accelerate industrial upgrading, it can significantly reduce cost-side pressure.

Scrap Lithium Battery Market Opportunity

In 2018, the global scrap lithium-ion battery recycling market size reached 111,783 tonnes, and it is expected to reach 641,595 tonnes by 2025, with a CAGR of 26.57% during the forecast period. In the global market, China is also one of the important regions, in 2018, its market size reached 71,161 tonnes (accounting for a 61% global market share), and it is expected to reach 417,165 tonnes by 2025, with an annual compound growth rate expected to be 26.60%. The second largest market is South Korea with 18,000 tonnes (16% share).

Table 1: Annual Scrap Lithium-ion Battery Recycling Market Forecast

China Share % ROW Global Growth (%)
2014 19,774 46.91% 22,379 42,153
2015 27,847 51.81% 25,902 53,749 27.51%
2016 36,165 55.49% 29,009 65,174 21.26%
2017 46,390 57.43% 34,386 80,776 23.94%
2018 71,161 63.66% 40,622 111,783 38.39%
2019E 101,321 64.92% 54,750 156,071 39.62%
2020E 144,584 65.41% 76,459 221,043 41.63%
2021E 204,641 66.70% 102,167 306,808 38.80%
2022E 263,180 66.46% 132,817 395,997 29.07%
2023E 317,971 65.93% 164,314 482,285 21.79%
2024E 371,997 65.79% 193,434 565,431 17.24%
2025E 417,165 65.02% 224,430 641,595 13.47%
China Scrap Lithium-ion Battery Recycling Forecast

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