An increasing number of electric vehicle makers in China will undertake recycling of battery packs as Beijing pushes them to build facilities to tackle the waste and stamp out a growing source of pollution as the waste starts piling up in the next three to five years, market observers said.
“The landscape of powered battery recycling will definitely change by 2025 and EV makers have to start making plans now if they haven’t as yet,” said Rachel Miu, auto analyst with DBS. “We are not seeing a big amount for now, but it is known for sure that it will grow along with the widespread adoption of cars powered by battery packs.”
A total of 7.05 million tonnes of EV lithium-ion batteries are expected to go offline between 2021 and 2030, according to Greenpeace, weighing about 1,000 times the Eiffel Tower.
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There is a possibility that this could exceed the forecast. China wants 20 per cent of new cars on the roads to be new-energy vehicles – pure electric, plug-in hybrid and fuel cell cars – by 2025, or more than 4 million units. UBS predicts NEV sales on the mainland could top 6.6 million that year.
With China overtaking the US as the world’s largest market for EVs in 2015, the mainland should see the first of retired batteries now as the lifespan of an EV battery ranges from five to eight years.
“There have been different predictions about 200,000 tonnes of batteries [retired] in 2020 but the volume is far from that,” said Hans Eric Melin, managing director of Circular Energy Storage Research, a London-based consultancy focused on lithium-ion battery life cycle management.
Mainland China lacks a recycling system for regular car batteries, with most used batteries collected by small, unlicensed vendors who recklessly dispose of them after selling the lead to other manufacturers.
The government is keen to prevent unchecked and unregulated disposal of lithium-ion batteries as the extraction of lithium, cobalt and other materials could harm the environment.
In the United States, where more than 90 per cent of car batteries are collected by the assemblers themselves for recycling, the practice is attracting attention from both upstream and downstream players in China’s EV market.
California-based Tesla launched a battery recycling service in China last September while its Chinese competitor BYD, which has a battery recycling plant in Shanghai, introduced a page on its website last year showing a list of places where EV batteries can be recycled in various cities.
Other EV makers including Xpeng said they are fully aware of the significance and potential of the business, but it would be some time before they can lay out detailed plans.
More players are expected to join after Premier Li Keqiang underscored the importance of recycling EV batteries in the latest government report presented to the National People’s Congress in Beijing on March 5.
The report said that as the uptake of electric cars increases in the country, “more car parks, and electric vehicle battery charging and swapping facilities will be built, and the system for recycling power batteries will have to be developed at a faster pace”.
“We will see more policies, including incentives and regulations rolling out following this report,” said Yu Zhuoping, dean of the College of Automotive Engineering at Shanghai-based Tongji University.
Beijing issued its first set of industry guidelines for EV battery recycling in 2018, announcing a list of five companies certified to engage in battery recycling that was expanded to 22 companies in January.
Circular Energy Storage’s Melin said he was impressed with the way China has gone about building its battery recycling ecosystem.
“In many ways China has a very modern system, much better than most other countries, including the European Union. China also is host to some of the best recyclers in the world like GEM, Ganzhou Highpower and Brunp,” said Melin.
“In China, batteries are recycled because there is a demand for the materials in the battery value chain, while in Europe and the US they are recycled because we believe it’s waste,” he added.
Other market observers believe that as the growing number of electric cars pushes up prices for materials used in batteries, such as lithium and cobalt, recycling could be the key to keeping costs down.
“Recycling can be an important part of assemblers and battery makers’ businesses in line with the swelling business scale,” said Davis Zhang, a senior executive at Suzhou Hazardtex, an energy-solution provider that supplies specialised vehicle batteries. “With the key materials recycled, big costs on batteries can be saved.”
And with China pledging to become carbon neutral by 2060, recycling of EV batteries takes on an important dimension.
“Clearly the government has realised that if the EV batteries are not properly dealt with, displacing petrol-powered cars with EVs is still not that environment friendly,” said DBS’ Miu.
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