Feasibility Plan For Battery Recycling
The recycling of power batteries has become a key link in the global new energy industry chain. With the explosive growth of the electric vehicle market, the global production of new energy vehicles is expected to exceed 18 million units in 2025, with the installed capacity of power batteries reaching 654GWh, corresponding to a theoretical scrapping volume of 470,000 tons.
Facing multiple challenges such as resource scarcity, environmental pressure and economic value, a recycling solution driven by both technology and policy is taking shape globally.
01. Industry Status Quo: Supply and Demand Pattern and Market Predicament
In the first half of 2025, the Chinese lithium battery recycling market as a whole presented a complex situation of weak supply and demand. Although the number of retired upstream power batteries has continued to grow, the retirement pace has not met expectations. Coupled with the limited increase in recycling in the consumer electronics and energy storage sectors, the supply of raw materials has not been fully released.
The downstream demand side is affected by the slowdown in the growth rate of the new energy industry chain, and the procurement demand is relatively weak. The prices of recycled products such as black powder and copper and aluminum auxiliary materials are under pressure, and the profit margins of enterprises are constantly being squeezed.
Data shows that in 2024, the actual amount of used lithium-ion batteries recycled in China was 654,000 tons, among which the amount of recycled lithium iron phosphate batteries and waste reached 400,000 tons, accounting for a further increase of 61.2%, while the amount of recycled ternary lithium batteries and waste was 243,000 tons
02. Recycling value: Resource Security and environmental Protection
The legal and compliant disposal of retired power batteries and the sustainable development of the recycling industry have become the current industry consensus.
The primary significance of lithium battery recycling lies in addressing the issue of resource shortage. Cobalt and nickel are the most scarce resources in power batteries. Since 2016, the price of nickel has doubled from its low point, while the price of cobalt has more than tripled.
Half of the cobalt reserves are in the politically highly unstable Democratic Republic of the Congo. In the context of soaring prices of scarce resources and uncertain production volumes, obtaining resources from battery recycling and extending the battery's service life have become particularly important.
Environmental protection is another important consideration. Used power batteries contain a large amount of heavy metals, organic substances, electrolytes and toxic gases produced by their conversions, all of which seriously threaten the environment and human health. Improper recycling and disposal of batteries can easily lead to risks such as fires and explosions. Moreover, retired batteries contain a large amount of toxic and harmful substances, which can easily cause environmental pollution
03. Technical Route: Secondary utilization and recycling
At present, the main technologies for the recycling and utilization of used vehicle batteries are secondary utilization and regeneration utilization.
Secondary utilization refers to the process of testing, screening and reorganizing used batteries to enable their continued use in other fields, such as energy storage systems and electric bicycles. Generally speaking, the average service life of power batteries is 5 to 8 years, and their performance declines with the increase of charging times.
When the remaining battery capacity drops to 70%-80% of the initial capacity, it can no longer meet the requirements for on-board power usage. However, these batteries can still be used in low-speed electric vehicles, backup power supplies, power storage and other fields where battery performance requirements are relatively low.
Recycling involves disassembling, separating and purifying used batteries to recover valuable metal elements such as lithium, cobalt and nickel. In the "Interim Measures for the Management of the Recycling and Utilization of Power Batteries in New Energy Vehicles" jointly issued by multiple national ministries and commissions, it is proposed that the utilization of used power batteries should follow the principle of first using them in a secondary manner and then recycling them
04. Recycling process: Pretreatment and advanced treatment
The mainstream recycling processes for lithium-ion batteries are divided into four types: wet process, pyrometallurgical process, combined process and repair and regeneration process. At present, the mainstream recycling processes in China mainly consist of traditional process disassembly combined with hydrometallurgy.
The recycling and treatment of used batteries mainly consist of three processes: pretreatment, secondary treatment and advanced treatment.
The pretreatment mainly involves deep discharge, crushing and physical sorting. To prevent short circuits and spontaneous combustion of used batteries, it is necessary to discharge the batteries before disassembling them. The mainstream approach is to immerse the positive and negative terminals of the battery in a conductive salt solution to achieve short-circuit discharge.
Secondary treatment is aimed at separating the positive and negative electrode active materials from the substrate. The main methods include heat treatment, organic solvent dissolution, and alkaline solution dissolution, etc. Advanced treatment, which involves leaching and separation purification to extract valuable metal materials, is the key to the recycling process.
In recent years, heat treatment technology has been widely applied. Generally, low-temperature pyrolysis technology is adopted to treat used batteries, that is, heating under a protective atmosphere to separate organic matter from powder materials.
This technology can effectively remove organic matter from batteries while recovering valuable metal elements. A typical method is to pyrolyze used lithium batteries at a temperature of 450-600℃ in an inert atmosphere for 15-25 minutes, collecting the electrolyte vapor while recovering the positive and negative electrode materials as well as valuable metal elements
05. Industry Challenges: Cost and Competitive Dilemma The battery recycling industry is confronted with multiple challenges. The recycling channels are in chaos, making it difficult for regular enterprises to survive. At present, over 75% of retired batteries flow into unqualified small workshops, and the recovery rate through formal recycling channels is less than 25%. Small workshops obtain metal materials through low-price purchases and extensive disassembly, which not only leads to resource waste but also brings serious environmental pollution and safety hazards. Formal enterprises, due to high environmental protection investment and significant cost pressure, find it difficult to compete with small workshops, resulting in a situation where "bad money drives out good". Technical bottlenecks and cost pressures are also major challenges. The recycling of power batteries involves multiple links such as disassembly, testing and reassembly, with high technical thresholds and large equipment investment. For instance, the secondary utilization technology of ternary lithium batteries is still not mature, with poor thermal stability and potential safety hazards. The recycling cost of lithium iron phosphate batteries is high and their economic viability is not good. In addition, the integrated design of the battery and the vehicle body (such as BYD's Blade battery) increases the difficulty and cost of disassembly. The policy, regulation and standard system is also not perfect. Although the state has issued the "Interim Measures for the Management of the Recycling and Utilization of Power Batteries in New Energy Vehicles", the enforcement of the regulations is insufficient and there are no mandatory regulatory measures. The industry standards for battery recycling are ambiguous, and there are significant differences in battery sizes and materials among different manufacturers, which leads to poor compatibility of recycling equipment and makes it difficult to handle on a large scale
06. Policy Support: Regulatory Conditions and Industry Prospects
The Ministry of Industry and Information Technology recently released the "Industry Normative Conditions for Comprehensive Utilization of Waste Power Batteries from New Energy Vehicles (2024 Edition)", revising the normative conditions from 2019.
The new version of the regulatory conditions has raised the technical indicator of lithium recovery rate in the smelting process from no less than 85% to no less than 90%, and added new technical indicators such as the recovery rate of electrode powder after crushing and separation being no less than 98% and the impurity aluminum content being less than 1.5%, guiding enterprises to strengthen technological innovation.
China has basically achieved the "nearby recycling and nearby disposal" of used power batteries. In places like Ganzhou, Jiangxi Province and Changsha, Hunan Province, industrial clusters for comprehensive utilization of power batteries have been formed. However, at present, the expansion speed of industry investment is relatively fast, and the utilization rate of the existing comprehensive utilization capacity in some regions is not high. It is urgent to guide the industry to invest in an orderly manner and make a reasonable layout.
In February 2025, The State Council's executive meeting reviewed and approved the "Action Plan for Improving the Recycling and Utilization System of Power Batteries for New Energy Vehicles". The meeting pointed out that at present, the power batteries of new energy vehicles in our country have entered the stage of large-scale retirement, and it is particularly important to comprehensively enhance the capacity and level of power battery recycling and utilization
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