The Chinese Ministry of Industry has now published detailed guidelines for setting up recycling facilities for batteries of electric cars. The new regulations are likely to pose major challenges for some electric car manufacturers.
As early as February 2018, the Ministry issued provisional regulations obliging manufacturers of electric vehicles to set up a network for the collection and recycling of used batteries. The guidelines that have now been clarified describe two types of recycling facilities that the industry must set up as required. Smaller facilities for the temporary storage of five tonnes and larger facilities with a minimum capacity of 30 tonnes designed for long-term operation.
If a manufacturer sells more than 8,000 New Energy Vehicles (NEVs) in an administrative area, it must build one of the larger storage facilities there – or earlier if the existing facilities do not provide the necessary capacity or meet safety standards. In these centres, batteries may be collected, sorted, stored and packaged – but not dismantled. Existing plants must be adapted to the new regulations within six months.
The battery recycling facilities are supposed to collect, sort, store, package and ship used-up electric car batteries, but are not allowed to disassemble these, except for inspection purposes. The ministry of industry is insisting that these facilities are to trace and collect data on their inventory and to communicate this data to the manufacturers, who in turn have to make a report on the data.
The stricter requirements and the associated investments are likely to hit some companies hard. With some subsidies coming to an end, even established carmakers will face economic challenges. China’s largest NEV manufacturer BYD recently issued a profit warning, while BIAC BluePark, China’s largest manufacturer of fully-electric cars, expects a loss in 2019. The new regulations on battery recycling are now causing further costs, but without providing the urgently needed revenue for many companies.