It is estimated that the scale of domestic retired power batteries will exceed 100Gwh in 2025, and market scale in the field of used lithium batteries recycling reached 78.41 billion RMB in 2025. Recently, SANY and BST have reached a strategic cooperation. The two parties will carry out long-term cooperation in battery banking, retired car battery recycling and other businesses, and jointly build a power battery recycling network. As a leading construction machinery company in China, why did SANY take the lead in entering the field of battery recycling?
1.Successful electrification transformation of enterprises entering the battery recycling industry
In recent years, the main products of the construction machinery industry have entered the electrification period. As the industry leader, SANY has become the leading enterprise of construction machinery electric vehicles. As of 2021, SANY has completed the development of 34 types of electric products, covering excavators, cranes, mixer trucks, dump trucks and road machinery. The sales volume of the company's electrified engineering vehicle products exceeded 1,000 units, with sales of nearly 1 billion RMB.
Especially in the field of heavy trucks, in 2021, SANY will sell a total of 1,497 new energy heavy trucks, accounting for 14.33% of the market share, ranking among the top sales of new energy heavy trucks in China. "Electrification is one of the important means of energy saving and emission reduction for commercial vehicles, especially heavy trucks. It is expected that the sales of new energy heavy trucks will reach 80,000 in 2025." said the chairman of SANY.
At present, SANY has successfully transformed into an all-round electrification, and has laid out in five major directions, including battery cells, electric drive bridge technology, fuel cell system and control technology, to seize the first-mover advantage. The important service of electric products is charging. In the design of electrified vehicles, in terms of technical routes, SANY has implemented a parallel mode of battery replacement and energy replenishment routes, and has jointly developed a mature power battery system solution with Chinese battery companies.
SANY has built an application and innovation platform around new energy vehicles - Xingbida Netlink Technology, which carries out sales of battery swap stations, vehicle leasing services, sales of charging and swapping equipment, vehicle custom development and design, battery leasing and other business. Sany Heavy Industry has entered the battery recycling industry this time. This last link in the full cycle of charging services will further enhance the core competitiveness of products and accelerate the transformation of enterprises to electrification.
2.Enterprises are scrambling to deploy the car battery recycling industry
Coincidentally, BYD also announced its entry not long ago. According to the news, BYD will establish Fudi Battery in Taizhou, Zhejiang, which is indirectly wholly-owned by BYD. Its business scope includes battery manufacturing and sales, recycling and cascade utilization of waste power batteries for new energy vehicles, and new material technology research and development. Two vehicle manufacturers have joined the battery recycling industry one after another, which may lead to increased competition in the field of battery recycling.
In addition, CATL, one of the Top 15 power battery companies, is also deploying in the field of car battery recycling. According to public information, as early as 2013, CATL acquired BRUNP RECYCLING and entered the field of car battery recycling. In October last year, the global power battery giant CATL announced that the planned investment amount should not exceed RMB 32 billion to build a BRUNP Integrated Battery Materials Industrial Park in Yichang, Hubei. According to industry analysts, CATL’s layout in the field of power battery recycling will help it complete the ecological closed loop of power batteries.
Another listed company engaged in recycling business, MIRACLE AUTOMATION, recently responded on the interactive platform that the company has signed a cooperation framework agreement with FAW Asset Management , a wholly-owned subsidiary of FAW Group. The two parties will jointly establish a car battery recycling system and jointly build a car battery recycling platform. Longnan Jintaige, a wholly-owned subsidiary of MIRACLE AUTOMATION, has carried out waste battery recycling business for many years, and has achieved all metal extraction processes for lithium-ion batteries. The recovery level is higher than the industry average, ranking in the forefront of the industry.
In addition to BYD, CATL, MIRACLE AUTOMATION and other companies, TINCI, RONBAY technology, GOTION HIGH-TECH and many other companies have also successively deployed the car battery recycling industry. With the increasing number of companies entering the industry, the competition in the field of power battery recycling has become increasingly fierce. In terms of battery recycling, a leading enterprise in the battery production industry, TIANNENG CO., LTD. said that it will also accelerate the deployment of battery recycling this year.
3.Great industry prospects due to huge market size and rising material prices
The battery recycling industry is an industry that has gradually formed after the development of the battery industry for many years with the formation of the battery exchange system. Most of the companies that used to be involved in the industry are in the field of battery production. Data shows that there are currently 38,500 power battery recycling-related companies in China, and 24,400 will be added in 2021, a year-on-year increase of 635%, which can be said to be an explosive growth trend.
So how big is the potential market in this industry that has attracted many companies to enter the market? Data shows that in 2020, China's cumulative scrapped power batteries exceeded 200,000 tons. At the same time, the price of raw materials for power batteries has risen rapidly. Recently, the price of power battery materials led by nickel has hit another record high. Data show that the spot price of nickel on the LME has exceeded $25,000 per ton, touching the peak in nearly a decade.
On the basis of the 25% rise in 2021, nickel prices will continue to rise this year, and the cumulative increase has now reached 18%. In addition, the price trend of lithium carbonate is also rapid. According to relevant media reports, the current market transaction price of battery grade lithium carbonate has been concentrated in 470,000 to 480,000 RMB/ton. Industry insiders said that with the sharp rise in raw material prices, car battery recycling is an extremely lucrative industry at present.
According to relevant data, as of the end of 2021, the number of new energy vehicles in China reached 7.84 million, accounting for 2.60% of the total number of vehicles, an increase of 59.25% compared with 2020, and still maintaining rapid growth. As report goes, the cumulative total of retired power batteries in China in 2020 will reach about 200,000 tons, and by 2025 this figure will rise to about one million tons, which is bound to bring a great increase to the car battery recycling industry.
4.Power battery recycling regulatory policies have been introduced one after another
With the increase in the number of enterprises entering the industry and the development of the industry, regulatory policies for car battery recycling have been introduced one after another, various requirements for recycling enterprises are being supplemented and improved, and the relevant responsibilities of enterprises in various links in the industrial chain are gradually clarified. At the same time, the speed of formulation of car battery recycling standards has been accelerated.
As a kind of power battery to provide power for electric tools, electric vehicles and other vehicles, lithium battery recycling is also an important part of battery recycling. In the future, battery recycling standards in related sub-sectors will be gradually expanded to further promote the standardized development of the industry. In the field of construction machinery, Jiangsu Province, China took the lead in passing the evaluation of relevant standards on April 23, which may become the first battery pack standard for battery swaps for pure electric heavy trucks in China.