Used EV Batteries Growing Alongside Electric Cars... Industry Faces 'Junggunanbang' Challenges

The Chinese used battery market is expanding rapidly, keeping pace with the unstoppable growth of the electric vehicle industry. However, due to the lack of consistent policies such as recycling standards and pricing, the industry is becoming chaotic with numerous small companies flooding the market, a concern raised even within the sector.

On the 12th, Chinese economic media Caijing cited data from the company information platform Aichicha, reporting that as of April 16, there were 51,621 companies registered in China under the business category of 'battery recycling.' In this regard, Wu Hui, chairman of the China Battery Industry Research Institute, explained, "There are currently many companies, but only about 200 are large enterprises," adding, "Only 88 companies are on the Ministry of Industry and Information Technology's whitelist, and most of these are small-scale operations."

[Image source=AP Yonhap News]

Luo Huanta, a researcher at the think tank Dadong Study, pointed out, "Overall demand for battery collection will explode," but also noted, "Currently, the industry lacks recycling processing standards, and pricing models vary." He further explained, "There are issues such as uneven supervision across different regions."

According to data related to new energy vehicles from Tianfeng Securities, about 390,000 new energy vehicles should have been scrapped in China last year, but the actual confirmed scrapping volume was only 90,000. Caijing evaluated that "this data discrepancy is related to many scrapped vehicles being processed in the black market or small-scale workshops."

Over the past decade, China's new energy vehicle market has shown rapid growth. Sales were only 17,600 units in 2013 but surged to 6,887,000 units last year. On a cumulative basis, the total number of new energy vehicles sold in China by the end of last year reached 13.01 million units. The China Automobile Dealers Association's Automobile Market Research Branch (Sunglianhui) expects this figure to exceed 20 million units by the end of this year.

The battery, which is essentially the 'heart' of new energy vehicles, generally has a lifespan of 5 to 8 years. As the battery replacement period for vehicles sold during the early production phase of new energy vehicles approaches, the demand for used battery recycling has increased in recent years. According to a report jointly released recently by research institutions EVTank and E-Business Economic Research Institute, the actual recovery volume of used lithium-ion batteries in China last year was 415,000 tons, a sharp increase of 75.8% compared to the previous year. The total industry market size reached 15.44 billion yuan (approximately 2.77 trillion KRW), growing 182.8% during the same period.

Most outlooks on market growth are optimistic. Huatai Securities forecasts that by 2030, the volume of used batteries will reach 437 GWh, and the recycling market will be worth 169.5 billion yuan. Some securities firms and consulting companies predict that the industry scale will exceed 100 billion yuan by 2025.

Leading companies are focusing on increasing recovery rates. Among the whitelist companies mentioned by Chairman Wu, industry leaders such as Bangpu Cycle and GEM are known to have recovery rates exceeding 90%. Caijing reported that Bangpu Cycle's recovery rates for nickel, cobalt, and manganese reach 99.3%, and lithium recovery rates also exceed 90%.

This content was produced with the assistance of AI translation services.