Mobile Metal Mines

Jay OwenSustainability News, Resource Efficiency, Greentech

China’s EV Life Cycle Is Evolving

Here’s an interesting statistic: for every five new vehicles sold in China last month, one was powered by alternative energy. In September, the so-called new-energy-vehicle penetration rate, a gauge of electric car popularity, nudged past 20% for the first time in the world’s biggest car market. Last year, it was only 5.8%. At that pace, Beijing’s goal of having EVs make up one-fifth of new car sales annually by 2025 looks a shoo-in.

Even more reassuring, over 70% of EVs are being purchased by individual consumers. In a nation of 1.4 billion people where car ownership is still only about one-quarter that of the U.S., rising acceptance of EVs is music to the ears of Tesla, Nio, Xpeng and the host of other automakers like VW and BMW trying to increase sales.

While Tesla grabs a lot of headlines (and rightly so, its China shipments topped 56,000 units in September), local carmakers are embracing EVs at a much quicker rate than their foreign counterparts. BYD, the Chinese automaker that counts Warren Buffett as a backer, sold just over 70,000 new-energy-vehicles last month.

Surging demand has prompted related companies to bet big on the sector. CATL, the world’s No. 1 battery maker, said earlier this month it needs around $17 billion to invest in the new manufacturing facilities it has announced since 2020.

The quicker-than-expected electrification of the automobile industry in China, and elsewhere, has also pushed up the cost of raw materials like cobalt and lithium. China only has about 1% of the world’s global cobalt reserves and prices in the nation have risen about 40% this year.

Cobalt at a plant in the Democratic Republic of Congo before being exported, mainly to China, to be refined.
Photographer: SAMIR TOUNSI/AFP

That makes EV battery recycling an even more urgent task. The first crop of EVs are coming to the end of their life in China after first appearing in fleets around 2008. Some 720,000 tons of EV batteries will be available to recycle by 2025, according to estimates, and regulators are paying this end of the spectrum more attention.

China has even been buying used EV batteries from overseas, Bao Wei, the general manager of Jiangsu Huayou, a recycling unit of Zhejiang Huayou Cobalt, said at a forum in Nanjing recently. Bao described the now millions of EVs that are on the roads globally as “moving metal mines.”

It’s a concept Elon Musk touched on too at Tesla’s annual general meeting on Oct. 7, saying you can think of batteries as “essentially high-grade ore.” “So you can either get your lithium and your nickel and the various constituents of the battery from rocks, or from batteries. It’s much better to get them from batteries,” he said.

After Jiangsu Huayou buys retired batteries, some of them are used in energy-storage applications, where aged cells are still useful. Then after a while, their key ingredients are extracted and sold on to battery makers, creating a perfect circle. It helps lower EV-battery-making costs by up to 20%, according to Bao.

And there’s that 20% figure again. China’s EV penetration rate is coming full circle.