CATL is aiming to build a recycling factory for battery materials in the central Chinese province of Hubei. Specifically, the group is planning a joint venture with the company Hubei Yihua Chemical Industry to recycle materials such as cobalt and lithium from used batteries of electric vehicles.
According to information from Reuters, the Chinese battery cell manufacturer estimates the investment in the planned factory at up to 32 billion yuan, the equivalent of around 4.3 billion euros. An engagement in the recycling sector is relatively new for CATL. According to the news agency, among other things, new standards and guidelines formulated by the Chinese government to promote battery recycling and to save materials probably played a role in CATL’s investment decision.
CATL is known to be one of the world’s leading manufacturers of battery cells for electric cars. The group’s success is mainly due to its strong position in the domestic market. According to information from the beginning of the year, CATL wants to defend this position by massively expanding its production capacities – specifically, it is talking about an increase in output to 230 GWh of battery cells this year and to 1,200 GWh in 2025, with the following intermediate steps: 380 GWh (2022), 540 GWh (2023) and 830 GWh (2024).
The expansion of production capacity is to be accompanied by expansion to Japan, Indonesia, the USA and Europe, with Germany playing a key role in the European market. The background to this is the construction of CATL’s first production facility outside China, which started in Erfurt. The groundbreaking ceremony took place there in October 2019, and completion is planned for 2022. The battery cells produced there will be supplied to BMW and Volkswagen, among others.
CATL recently acquired the Canadian mining company Millennial Lithium to secure raw materials for production. The takeover of the lithium producer is only the latest example of a series of investments that CATL has made in recent times to expand its supply chain vertically. The battery maker recently bought stakes in Neo Lithium Corp, also a Canadian company, Greenland’s North American Nickel and Australia’s Pilbara Minerals, among others. Since April, a CATL subsidiary has also held a stake in China Molybdenum’s Kisanfu mine, a cobalt site in the Democratic Republic of Congo.
With the construction of a recycling factory, CATL is now apparently also focusing on secondary raw materials, which are recycled and reprocessed from discarded electric car batteries. This is also evidenced by a recently concluded strategic partnership with BASF, which focuses on solutions for cathode materials and battery recycling – especially for the CATL plant under construction near Erfurt. As early as 2020, CATL also agreed on a cooperation with Honda, which among other things involved discussing recycling and second-life approaches. So far, however, these have been rather selective forays in this direction. With the recycling plant in China, CATL seems to want to put its recycling commitment on a broader footing.
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