Source: Southern Finance 21st Century Business Herald

Link: https://m.21jingji.com/article/20221001/herald/17f1fea78eacf808826e272aa6fe7149.html

Date: October 1, 2022

By Lin Dianchi, Southern Financial Media, Shenzhen

Influenced by the rising prices of raw materials and the "retirement tide" of power batteries, the lithium recycling industry is in the "windfall" of both policy and capital.

Ltd. ("Jiecheng New Energy") has been focusing on the integrated operation of resource recycling in the whole industry chain of new energy lithium battery recycling for ten years, and its business scale and annual comprehensive processing capacity rank among the top in the industry.

Zheng Weipeng, the founder and chairman of Jie Cheng New Energy, said in an interview with Southern Financial Media that the company's revenue is expected to reach 1.5 billion yuan this year, and the completed production capacity will reach 340,000 tons.

In July this year, Jie Cheng New Energy announced the completion of Series A financing, led by Bank of China Guangdong Finance, followed by Everbright Holdings, Longgang Golden Holdings (Shenzhen), Xin Yi Capital and other institutions, with a scale of more than RMB 100 million. It is understood that this round of financing will be mainly used for battery recycling technology research and development and capacity expansion.

The investment team of BOC Yue Cai New Energy said in an interview with the Southern Finance and Economics Media that Jie Cheng New Energy entered the field of lithium recycling early, and the core team has been steeped in the relevant fields for many years, with both pragmatic experience and long-term learning thinking; the company has formed good cooperation relationships with a variety of channel partners, including mainstream battery cell enterprises, and has good reputation for its business service capability and product quality. In addition, the company has laid out bases in the Pearl River Delta and Yangtze River Delta, actively stockpiling technologies related to next-generation battery recycling, forming a business closed loop of recycling and dismantling, secondary use and material regeneration.

Deeply engaged in lithium recycling and ahead of the game in "double carbon"

In 2012, Jie Cheng New Energy entered the lithium battery recycling industry, and was one of the first companies in China to lay out this industry. At that time, new energy vehicles were still in the demonstration and promotion stage, and the number of industry players and capital concerned with power battery recycling was very small.

At the time of its establishment, Jie Cheng New Energy was the first to target the recycling and trade of used lithium batteries for consumer electronics, and took the lead in building the first generation of harmless recycling production line for used lithium batteries in Shenzhen.

It was such an "inconspicuous" industry, but at that time, in Zheng Weipeng's view, it had considerable business prospects.

In 2014, Zheng Weipeng participated in a test drive of Tesla, and although Tesla was still a niche product at the time, Zheng was impressed by the superior performance of new energy vehicles.

Zheng Weipeng judged that as the power battery technology improves, the range will steadily rise and the cost of power batteries will continue to decrease. Once the price of new energy vehicles and traditional fuel cars converge, or even better than traditional fuel cars, new energy vehicles will rapidly increase in volume. When the power battery has spent 5-8 years of its life cycle, the recycling plant will be the home of the lithium battery.

It is also based on this that in 2019 Jie Cheng New Energy decided to establish a waste battery dismantling base in Huizhou with a capacity of 30,000 tons, and in the same year obtained the dual interface of national traceability platform for laddering and recycling.

In 2020, China announced its carbon peaking and carbon neutral targets. The new energy industry entered an explosive period, and the performance rate of the upstream and downstream of the industry chain exceeded expectations before the proper placement and treatment of retired batteries attracted the attention of the industry.

The broad prospects have attracted capital chasing. According to incomplete statistics, so far in 2022, more than ten investment and financing events have occurred in the domestic power battery recycling field, with a financing scale of over 2.4 billion yuan.

At present, Jie Cheng New Energy has accumulated rich procurement end channel resources and entered the supply chain of a number of head battery manufacturers, such as BYD, YIWU Lithium Energy and Xin Wanda. Many battery manufacturers, OEMs and auto dismantling plants supply Jie Cheng New Energy with retired batteries or B-class batteries, thereby realizing the recycling of production materials.

In addition, Zheng Weipeng revealed that the company's current battery recycling capacity is around 40,000 tons, which is already running at full capacity, and the overall industry will rapidly increase in volume this year.

Innovation driven by the Force, multi-regional whole industry chain layout

CITIC Securities calculates that if calculated on the basis of a 5-year battery phase-out period, batteries that began service after 2017 will soon be at end-of-life. It predicts that the battery market recycling space will reach 91.5 billion yuan in 2022 and will exceed 150 billion yuan in 2027.

Jie Cheng New Energy keeps up with the development of the industry and lays out the lithium industry highlands of the Greater Bay Area in advance. According to the introduction, the company established a comprehensive utilization industrial park in Jiangmen, with a total investment of 3 billion yuan. The industrial park covers an area of 300 mu, the first phase of 78 mu, is expected to be put into production in the first quarter of 2023, involving laddering, dismantling production, wet chemical smelting and other production lines. When the project reaches production, it is expected to handle 300,000 tonnes of retired power battery packs for new energy vehicles annually.

In addition, the Yangtze River Delta Recycling Industrial Park and the Beijing-Tianjin-Hebei industrial base are among Jebsen New Energy's plans to expand production. Jie Cheng New Energy related sources said, "Our expansion is around the national power battery industry cluster layout."

Jebsen New Energy has two main treatment methods for recycled batteries, namely gradual use and dismantling and recycling. The retired batteries with 80%~20% of remaining capacity can be applied to household energy storage or low-speed vehicles as a matter of priority; for waste batteries that do not meet the criteria for secondary use, Jebsen New Energy follows the principles of dismantling and recycling for testing, dismantling, shredding, screening, separation and other processes to make black powder and other materials and supply them to downstream metallurgical enterprises.

Testing is the first hurdle in the processing of recycled batteries, but it is also Jebsen New Energy's core strength. In order to improve the testing efficiency, Jebsen New Energy has set up a rapid testing centre laboratory. Compared to the testing time of peers, which is often several days, Jebsen's rapid testing centre can produce results on the same day at the earliest, so that the company's salesmen can bid accurately.

Due to the different sizes of power battery manufacturers, in the industry's view, it is difficult to make extensive use of the gradient. Jebsen New Energy, on the other hand, relies on its channel advantage with power battery manufacturers to acquire a considerable number of "consistent" lithium batteries. In the practice of back-end scenario development, the batch of batteries with convergent specifications will help the application scenario to be widely promoted.

It is worth noting that the National Energy Board recently issued a draft for comment, stipulating that ternary lithium batteries can not be used in large energy storage power plants, the gradient use of batteries for storage power plants to meet the relevant testing standards.

"Ternary lithium batteries are not suitable for the construction of energy storage power stations, Jie Cheng new energy gradient use has always only used lithium iron phosphate batteries, the new rules are conducive to regulating the development of the industry." Zheng Weipeng said.

In Zheng Weipeng's view, the power battery recycling industry based on the need to have the following core competitiveness: the industry's early sprouting relies on recycling channels to establish advantages; further development will also need legal compliance recycling qualification, to meet the requirements of environmental assessment, as well as enough to carry the surge in retired battery capacity; the future is to improve detection efficiency, charged crushing, improve smelting precious metal recovery rate and other technologies to build a moat, the competition is The cost control ability of enterprises.

However, Zheng Weipeng also mentioned that the industry needs to solve the problem of how to improve the utilization rate of battery recycling outlets and bring economic benefits.

(Author: Lin Dianchi Editor: Sun Chaoyi)