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China’s New NEV Battery Recycling Mandate Puts the Onus on Struggling Carmakers

By Dave Yin / Nov 09, 2019 01:27 AM / Environment

Photo: VCG

Photo: VCG

China’s hundreds of electric car makers, already fighting for survival, must now dedicate resources to the post-consumer process.

China’s industry regulator called on manufacturers of new-energy vehicles (NEVs) and others to set up and standardize recycling plants for batteries of electric cars. These facilities will be shared by NEV manufacturers, battery makers, wrecking yards, integrated companies and more.

Guidelines published Thursday (link in Chinese) by China’s Ministry of Industry and Information Technology (MIIT) outline two types of recycling facilities that the industry must establish, depending on the need, although they must both be located in administrative areas where companies sell electric cars – starting at prefecture-level cities.

Smaller, “collection-style” recycling centers are for temporary storage and are limited to holding a total of 5 tons of batteries, whereas larger “concentrated storage-style” plants will have a minimum capacity of 30 tons and are designed for long-term storage. The larger centers are required in areas where NEV companies keep more than 8,000 vehicles or where existing recycling facilities lack storage capacity and safety standards.

Dedicated electric car battery recycling facilities are required to collect, sort, store, package and ship worn-out units, though they are forbidden from disassembling them for any purpose aside from conducting safety inspections. They are also expected to use digital tools to trace and collect data on their inventory and hand the information over to manufacturers, which must in turn report recycling data in a “timely fashion,” the ministry said.

Existing facilities were given six months to meet the guidelines’ requirements.

The directive updates 2018 provisions on NEV battery recycling, in which the ministry also urged the auto and battery industries to jointly build recycling pilot projects in several major Chinese cities. However, this week’s mandate follows a government commitment to phase out subsidies for all types of NEVs, which include all-electric, fuel cell and hybrid cars, to pare back the roughly 500 companies that have sprung up in response to government grants.

BYD, China’s biggest NEV maker, reported an 89% drop in third-quarter earnings and warned that profit could fall as much as 43% in 2019. BAIC BluePark New Energy Technology, China’s biggest maker of all-electric cars, also forecast a 2019 loss.

Contact reporter Dave Yin (davidyin@caixin.com)

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