Lithium battery recycling network race: diversified players' "refueling" layout

The global lithium battery recycling track is becoming increasingly crowded and complex. Industry participants are facing dual pressures: on one hand, increasingly strict recycling regulations and material recycling targets in the European Union and other regions are pressing, and on the other hand, upstream material price fluctuations pose a severe test on the economic viability of recycling.

In this context, players from battery manufacturers, material giants, professional third-party recyclers, and even automobile manufacturers are accelerating their layout.

At the same time, their path choices, technological priorities, and business models show significant differences, driving the acceleration of the entire industry chain to form a closed loop.

Market situation: Capacity growth slows down, profit challenges emerge

As the world's largest battery market, China has initially established a huge recycling and processing system.

As of the end of 2024, the total production capacity of officially certified lithium-ion battery cascade utilization and dismantling and recycling has reached 4.233 million tons per year, of which the recycling, dismantling and utilization capacity slightly exceeds the cascade utilization capacity.

A noteworthy signal is that the growth rate of industry production capacity has significantly slowed down compared to previous years. This indicates that the market is shifting from an early "enclosure style" expansion to a deeper focus on technology, efficiency, and sustainable profitability.

The challenge is particularly prominent in terms of economy. Since 2024, the profitability of the battery recycling industry has generally weakened due to the downward impact of upstream material prices.

GGII data reveals a harsh reality: some wet recycling companies are facing losses, with nickel cobalt recycling losing nearly 10000 yuan per ton and lithium carbonate losing nearly 3000 yuan.

Although mainstream hydrometallurgy technology has achieved a recovery rate of over 98% for metals such as nickel, cobalt, and manganese, and a lithium recovery rate of over 90%, there is relatively limited room for technological improvement, making it difficult to fully offset cost pressures.

At the same time, the rapid increase in market share of lithium iron phosphate batteries has also put forward new requirements for recycling technology and specialized processing capabilities, increasing the complexity of the industry. The existing production capacity structure urgently needs to be optimized to adapt to this change.

The tiered utilization market also faces multiple challenges such as scale contraction, compression of B-grade batteries, and low industry concentration.

Driving Forces and Trends: Policy Hard Constraints and Expectations of Scrap Wave

Despite numerous short-term challenges, the hard constraints of policies provide long-term support for the development of the industry.

The most important thing that cannot be ignored is undoubtedly the clear "countdown" set by the EU's new battery law for the industry:

By 2027, the recycling efficiency of lithium batteries needs to reach 65%, the lithium recovery rate needs to reach 50%, and the regeneration rate of key metals such as cobalt, nickel, and copper needs to reach 90%;

By 2031, these goals will be further raised to 80%, 80%, and 95%. The globalization trend of such regulations is forcing the entire industry chain to incorporate recycling into core strategic considerations.

At the same time, the market has strong expectations for a large-scale battery retirement wave in the future, which is another core driving force for the development of the industry.

Some institutions predict that after 2028, batteries scrapped from society will become the main source of recycled metals. The theoretical recycling rate is expected to reach a compound annual growth rate of 48% between 2024 and 2030, far exceeding the 14% growth rate of production line waste during the same period.

This indicates that a huge recycling market driven by terminal consumption is about to open up, providing vast future space for enterprises that can survive the current cycle.

Diversified players entering the game: significant differences in strategic paths

Faced with industry changes and future opportunities, enterprises from different backgrounds are leveraging their own advantages to adopt differentiated competitive strategies and accelerate the integration of the industrial chain.

Battery manufacturers are actively building closed loops to strengthen control over the entire lifecycle of batteries.

CATL has demonstrated leading scale and efficiency through its subsidiary, Bangpu Cycle.

According to its 2024 ESG report, the annual recycling of waste batteries reached 128700 tons, with 17100 tons of recycled lithium salts. The lithium recovery rate increased from 91.6% in 2023 to 93.8%, while the nickel cobalt manganese recovery rate remained at a high level of 99.6%. Bangpu mainly adopts the process route of wet metallurgy combined with pyrometallurgical pretreatment.

Guoxuan High Tech focuses on the combination of hierarchical utilization and recycling networks, with a recycling capacity of 12000 tons by 2024 and a clear goal of reaching 50000 tons by 2026.

Technically, the comprehensive recovery rate of iron, phosphorus, and lithium resources is 92.5%. It is worth noting that about 60% of its recycled batteries are used for cascade utilization, and a three-level recycling network covering the whole country is being constructed based on the principles of "safety, environmental protection, conservation, and proximity".

BYD's Fudi Battery focuses on cascade utilization and has production bases in Shanghai and Shanwei. By 2024, the recycling capacity will exceed 10000 tons. At the same time, it has mastered core technologies in dismantling and recycling and has cooperated with whitelist companies.

Yiwei Lithium Energy has entered through its subsidiary Hubei Jinquan New Materials and has built a 20000 ton/year processing production line.

Recently at the Shanghai Auto Show, EVE Energy further launched the "Cradle Plan" aimed at building the world's first transcontinental lithium battery recycling network, which will cover over 30 countries. At the same time, relying on the global layout of over 1000 outlets, full lifecycle digital traceability, and the open cooperation model of "CLS+Global Recycling Mall", it will promote the closed-loop from battery recycling to material regeneration and accelerate the industry's transformation to a circular recycling model.

International manufacturers such as LG New Energy are also accelerating the establishment of joint ventures with European partners to layout overseas recycling capacity.

At the same time, material manufacturers are actively extending upstream to ensure stable supply of key resources.

Hunan Yuneng regards recycling as a key closed-loop of its integrated strategy of "resources precursor positive electrode materials recycling", and plans to invest in the construction of a 20000 ton/year waste lithium battery dismantling and recycling project.

Zhongwei Co., Ltd. recently invested nearly 500 million yuan to build a comprehensive recycling system, covering the entire process from battery pack disassembly and cascading utilization to the production of various metal salts, demonstrating its determination to build comprehensive recycling capabilities.

Third party professional recyclers rely on their technological accumulation and network advantages to deeply cultivate the market. Companies represented by Greenmei have shown resilience under overall pressure in the industry.

According to its disclosure, the power battery recycling business has achieved profitability for two consecutive years, which is particularly prominent in the current market environment. In 2024, its recycling capacity reached 35930 tons, a year-on-year increase of 31%. The production of lithium carbonate exceeded 4000 tons, a year-on-year increase of over 44%. The lithium recovery rate exceeded 95% and hit the industry high of 97%.

The company has not only opened production lines for lithium iron phosphate and low-grade lithium slag recycling, but also established cooperative relationships with numerous two wheeler companies, battery factories, and automobile factories, including joint ventures with Guangzhou Automobile Group to build recycling plants. Greenmei aims to increase its recycling capacity to over 300000 tons by 2026.

The core competitiveness of such enterprises lies in their professional technology, economies of scale, and extensive industrial chain cooperation network.

Automobile manufacturers, as the ultimate users of batteries, have also begun to explore sustainable recycling models from the end. Toyota's latest move in China is of symbolic significance.

It has established a joint venture with China Minmetals and its subsidiaries to jointly promote the hierarchical utilization and resource recycling of vehicle power batteries. This is the first time Toyota has established a joint venture project in this field overseas, demonstrating that OEMs are deeply involved in the back-end value chain management of batteries.

Overall, the lithium battery recycling industry is transitioning from blue ocean exploration to deep water competition. Participants from different backgrounds have chosen different entry points and strategic priorities based on their own resources: battery factories strive for closed-loop, material factories aim to ensure supply, third-party channels focus, and car companies focus on terminal responsibility and new business models.

Although the specific process routes of hydrometallurgy and pyrometallurgy have not been fully unified, the pursuit of efficiency, cost, and environmental protection has become a consensus in the industry.

In the coming years, as technology continues to advance, business models continue to innovate, and retired batteries gradually increase in volume, the industry is expected to undergo further consolidation.

Enterprises that can truly achieve technological leadership, controllable costs, and build strong ecological synergy capabilities will gain an advantage in the reshaped industry landscape.