The Russian-Ukrainian conflict has further exacerbated the shortage of some raw materials, and the recent short-term market in the futures market has made nickel prices exceed the $100,000 per ton mark, and the production cost of an electric vehicle may increase. At $1,000 (about 6,300 yuan), the new track for lithium battery recycling has become a new focus for major car companies such as Tesla.
Recently, the commodity futures market has staged a “surge”.
The fear of supply cuts brought about by the conflict between Russia and Ukraine and the short squeeze in the futures market have made nickel prices exceed the $100,000 per ton mark. The price change of “demon nickel” has also caused chaos in the industrial chain. Stainless steel manufacturers mainly use nickel pig iron, while battery manufacturers use nickel sulfate. After the London Metal Exchange LME suspended nickel trading on Tuesday, it caused a price squeeze. .
Lithium is also skyrocketing. In August last year, the price of battery-grade lithium carbonate was around 100,000 yuan / ton, and now it is nearly 500,000 yuan / ton. The increase of up to 400% is also “amazing”.
As an important raw material for the production of lithium batteries, the rise of lithium, cobalt and nickel raw materials has also caused a great impact on the supply and demand of lithium batteries. The trend of “madness” not only occurs in the supply side of raw materials, but also in the field of waste power battery recycling. From the beginning, the recycling price of power batteries is only 60% compared with new products, and now the price has been inverted, which has also caused many concerns.
In this way, the recycling and reuse of lithium batteries has also become a blue ocean market with a growing scale.
How big is the market size of lithium batteries, attracting giants to lay out
In modern society, lithium batteries are widely used in various electronic products and electric vehicles. In the past few years, the market size of lithium batteries has continued to expand. In 2020, it was about 44.2 billion US dollars, and it is expected to rise to 94.4 billion US dollars by 2025.
The main driver of growth is the strong demand for electric vehicles. Electric vehicles are expected to account for 10 percent of all vehicles on the road globally by 2025, and further increase to 58 percent by 2040.
As mentioned in an earlier article of All Weather Technology, according to the data in the new energy field disclosed by the Passenger Federation, in February 2022, the wholesale and retail volumes of domestic new energy passenger vehicles increased by 189.1% and 180.5% respectively, reaching 317,000 units and 27.2%. million units. Although the chain has decreased, it is better than the trend in February over the past year.
According to CCTV Finance, the global lithium battery recycling market size is about 3.6 billion US dollars in 2020, but it is expected to grow to 10.7 billion US dollars in 2026, with a compound annual growth rate of 19.4%.
Higher costs, “more wolves and less meat”, battery recycling into a new track
In the face of the conflict between Russia and Ukraine, which has further exacerbated the shortage of some raw materials (Russia is the world‘s third largest nickel producer), the supply cut off in the raw material market is even more worrying.
According to data from the Shanghai Steel Federation, the price of battery-grade lithium carbonate rose again on March 7, and has now reached 502,500 yuan / ton. Everbright Securities also pointed out that under the background of the continued high price of lithium ore, the economics of lithium battery recycling is prominent.
In addition, according to estimates by Morgan Stanley, soaring nickel prices could increase the production cost of an electric car by $1,000 (about 6,300 yuan).
A number of giants such as Tesla, Volkswagen, General Motors, and Ford have long been engaged in resource battles for lithium, cobalt, and nickel ore around the world.
Tesla and other giants: crazy “hoarding” lithium-nickel resources to oversize power battery recycling
As early as the Tesla Battery Day event in 2020, Tesla officially announced that it plans to launch a battery recycling service, and the recovered lithium-ion battery packs will be processed and recycled by designated factories. In September 2020, Tesla launched a battery recycling service in China, promising that scrapped lithium-ion batteries will not be landfilled, but will be processed by qualified professionals in professionally designated factories, which can be 100% recycled.
In August 2021, Tesla released its 2020 Impact Report, describing the company’s ongoing adoption of a “closed-loop” process that would allow it to keep 100 percent of its batteries out of landfills. Tesla wrote in the report: “None of our end-of-life lithium-ion batteries is sent to landfill, 100% is recycled. We actively implement circular economy principles.”
Renault also announced its involvement in battery recycling in October 2020 through its SmartHubs project. The company claims the West Sussex energy system, comprising 1,000 second-hand EV batteries, will provide cleaner, lower-cost energy for social housing, transport, infrastructure, private homes and local businesses.
From cascade utilization, recycling materials to improving technology, car companies are also making different attempts. In April 2021, Swedish carmaker Volvo reaffirmed its commitment to become a “circular business” by 2040, creating a closed loop that will recycle all materials in its cars.
In addition to Volvo, Nissan already uses secondary batteries from the Leaf for static energy storage in industrial and domestic facilities, and offers off-the-shelf home or commercial energy storage units called xStorage. The difference with the Nissan as a rival to the Tesla Powerwall is that you can choose to use new or used batteries.
Honda has also announced plans for its used hybrid and electric vehicle batteries. Honda’s European division will work with French company New Generation Metals (SNAM) to collect and recycle batteries for secondary use or to extract valuable elements.
BMW announced in October 2020 that it would be partnering with energy company Off Grid Energy to create sustainable secondary solutions for the batteries of end-of-life BMW and MINI electric and hybrid models.
In addition to the leaders in the automotive industry, under the expectation that the scale of new energy power battery decommissioning will continue to grow, many companies have poured into the battery recycling industry. Annual growth of about 253.3%. However, it is reported that among the above-mentioned registered enterprises, most of them are small and medium-sized enterprises, of which enterprises with a registered capital of less than 1 million account for about 25%, and enterprises with a registered capital of between 1 million and 5 million account for about 35%.
Although most of the waste power battery recycling industry is currently small and medium-sized competitors. According to the “Industry Standard Conditions for Comprehensive Utilization of Waste Power Batteries for New Energy Vehicles” issued by the Ministry of Industry and Information Technology of my country, as of the end of 2021, there are 27 companies that meet my country’s battery recycling industry standards, including CATL, GEM, Tianci Materials, Guoxuan High-tech, BYD and many other large-scale lithium battery giants.
Not long ago, Tianqi Co., Ltd. announced that it will further promote the green supply chain management system of waste lithium batteries with Jingdong Technology Information Technology Co., Ltd., realize resource sharing and complementary advantages in the “Internet + recycling” scenario, and create a lithium battery recycling ecosystem. JD.com will use its own supply chain, cloud computing and big data, logistics system construction and management capabilities to fully assist Tianqi’s “integrated Internet platform for power battery recycling industry” to land and operate.
In addition to the expected market size and rising cost pressure, Wall Street has heard “Why should we pay attention to the battery recycling track at this time? ” mentioned that power battery recycling is also of extraordinary significance: the recycling of power battery metal materials not only conforms to the vision of carbon neutrality, but also alleviates my country’s dependence on the supply of metals such as lithium, cobalt, and nickel. At present, it is necessary for my country to carry out power battery recycling and cascade utilization, mainly from the perspectives of environmental protection and resource safety.
In addition, from the perspective of the industry chain, you can also pay attention to the previous live broadcast of “Lithium Price Exceeds 450,000, Can the Industry Chain Bear It? ” to gain a deeper understanding.
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