The Rise of China’s Renegade Battery Recyclers
China is the world's largest EV market and unregulated freelance traders have emerged to take advantage of the lucrative battery recycling industry.
Big Idea:
In China, a growing gray market of traders and small recycling workshops has emerged alongside the giant battery recycling plants. These players are capitalizing on the increasing number of retired EV batteries containing valuable metals such as lithium, cobalt, and nickel.
Why It Matters:
China, the world's largest EV market, regards batteries as a key resource for green transition. The effective recycling of EV batteries is crucial as global competition for critical minerals intensifies. China aims to establish an efficient, safe, and environmentally friendly battery recycling system for Chinese automakers to produce electric cars with recycled batteries at scale.
Yes, But:
Chinese battery recycling regulations are still in their early stages. The presence of unregulated operators, constituting around a fifth of the market, poses safety and environmental risks. The lack of strict enforcement allows these operators to offer higher prices to battery owners, diverting valuable cells away from official recycling channels.
Key Details:
- The Chinese EV battery recycling industry grew from 2.9 GWh in 2017 to 21.2 GWh in 2020, and the global market is expected to reach $10.45 billion by 2030.
- Technological advancements in direct recycling, hydrometallurgical, and cryogenic processes are enhancing efficiency and environmental sustainability.
- Freelance traders use social media to source used batteries, revealing the grassroots level of this industry. These practices, currently unregulated, highlight the market's potential.
- The shift to recycled EV batteries could reduce manufacturing costs, lower the carbon footprint of battery production and alleviate pressure on finite metal resources.
What’s Next:
The Chinese market is likely to see further technological advancements, stricter regulatory enforcement, and market consolidation.
The Intrigue:
As China seeks to regulate and enhance its battery recycling market, there are opportunities for growth, cost reduction, and improved environmental credentials. The effective recycling of EV batteries would not only benefit the domestic market but also position Chinese automakers favorably in the global competition, especially in regions like Europe where recycled content requirements are mandated.
By the Numbers:
- China's EV battery recycling market is projected to exceed 40 billion yuan by 2025.
- In 2020, China decommissioned 200,000 tons of power batteries, with projections of 780,000 tons by 2025.
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