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On March 8th, Chinese recycler GEM signed a battery recycling supply agreement with five companies, including Camel Group, Eagoal New Energy Group, Henan Zhongxin New Materials, 5C Recycling, and Meihua New Materials. The agreement states that over 50,000 tonnes of end-of-life (EoL) batteries and production scrap will be supplied to GEM by these companies by the year 2027.
The recycling supply agreement for securing feedstock
As per the agreement, GEM will receive no less than 10,000 tonnes of EoL batteries or production scrap from each partner during the contract period. The goal of this partnership is to build a close-loop value chain that covers the recovery of NCM battery materials from EoL EVs and batteries and the manufacturing of pCAM/CAM and batteries. GEM will handle the disposal of EoL batteries and will be responsible for logistics, storage, disassembling, and recycling. Additionally, GEM will work with its partners to establish a network of battery collection across China. This contract is valid for three years from the date of signing.
Collaboration with Youpai Energy Technology
Early this month, GEM also announced a collaboration with the Chinese recycler Youpai Energy Technology (Youpai) to build a recycling facility in Guangzhou. Youpai, a subsidiary of Chinese OEM GAC, currently operates a battery reuse pilot plant in Guangzhou with an annual capacity of 2,000 batteries. While there are few details disclosed about the Guangzhou plant, it will likely address the recycling gap, thereby assisting GAC in building a closed-loop battery value chain.
Rho’s Evaluation
The overcapacity issue in China has reached a critical point, and securing feedstock has become one of the priorities for most recyclers for their development in 2024. Although some companies such as Brunp and CATL have built a vertical supply chain, more capacity coming online across various regions will generate a recycling scrap shortage issue in the country. It also reflects on the decrease of the utilization rate of recycling facilities and companies are becoming more cautious on recycling investment.
Source: GEM, Youpai New Energy Technology
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Source: GEM, Youpai New Energy Technology