After years of dismantling discarded televisions and laptops, a Shanghai recycling plant is readying itself for a new wave of waste: piles of exhausted batteries from the surge of electric vehicles hitting China's streets. The plant has secured licences and is undergoing upgrades to handle a fast-growing mountain of battery waste, said Li Yingzhe, a manager at the facility, run by the state-owned Shanghai Jinqiao Group.
"We believe there will be so much growth in the number of electric vehicles in the future," he said. Shanghai Jinqiao will be entering a market that includes Chinese companies like Jiangxi Ganfeng Lithium and GEM Co. Ltd, whose share prices have risen as they invest in battery recycling facilities of their own. That confidence comes even as companies face considerable hurdles launching battery recycling businesses, including high operating costs. The growth of China's electric vehicle industry - and the ambitions of recycling companies - is underpinned by a government drive to eventually phase out gasoline-burning cars, part of a broader effort to improve urban air quality and ease a reliance on overseas oil. Led by companies like BYD and Geely, sales of electric vehicles in China reached 507,000 in 2016, up 53 percent over the previous year. The government is targeting sales of 2 million a year by 2020 and 7 million five years later, amounting to a fifth of total car production by 2025.
According to the International Energy Agency, China accounted for more than 40 percent of global electric car sales in 2016, followed by the European Union and the United States. It also overtook the United States as the market with the greatest number of electric vehicles.
Production in China of the lithium batteries that power those cars has also soared. In the first eight months of 2017, Chinese manufacturers produced 6.7 billion batteries, up 51 percent from the year-earlier period, according to industry ministry data. All that activity could put China in pole position for dominating the global electric car industry, as well as related businesses like batteries and recycling. China began promoting electric vehicles in 2009, and as the first of those cars reach the end of their lifespan, lithium battery waste could be as much as 170,000 tonnes next year, industry experts estimate.
The figure is likely to keep multiplying in tandem with car sales. Dealing with all that waste poses huge problems for China. Lithium batteries are not yet classified as hazardous waste and are therefore not subject to stringent disposal controls. Battery waste includes heavy metals like cobalt and nickel, as well as toxic residues that could end up in waterways and the soil if not handled properly. Despite the challenges, battery waste also represents a significant opportunity for the country's growing recycling industry.
The China Automobile Innovation Centre, an industry think tank, estimates the recycling market could be worth 31 billion yuan ($4.68 billion) by 2023. Wang Chuanfu, president of BYD Co Ltd, China's leading electric carmaker, last month described the lithium, copper and cobalt extracted from spent batteries as "treasures". Still, the industry faces numerous obstacles. Recycling lithium batteries can be prohibitively expensive for many companies. And the industry has yet to agree on the standardisation necessary to handle spent batteries more profitably and in big numbers.
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