In recent years, China’s lithium-ion battery industry has been developing rapidly, and it has ranked among the global first echelon in terms of both scale and process technology. At the same time, we should pay close attention to the accompanying issues of disposal and recycling of a large number of waste lithium-ion batteries. Green development, circular economy, and renewability are inherent requirements for the development of the new energy industry, and also basic prerequisites for achieving the "dual carbon" goals (carbon peaking and carbon neutrality). In fact, if waste lithium-ion batteries are not properly disposed of, they will become ordinary waste or even hazardous waste; however, with proper disposal, they can be turned into valuable resources, generating significant economic benefits. To take lithium-ion battery cathode materials alone, they contain non-renewable and high-value mineral resources such as lithium, cobalt, and nickel. Among them, the price of lithium resources has surged several times in the past year—specifically, the price of battery-grade lithium carbonate has risen from approximately RMB 60,000 per ton at the beginning of 2021 to RMB 550,000 per ton by the end of October 2022. This nearly tenfold price increase not only reflects the strong demand for lithium-ion batteries but also indicates that lithium resource recycling has enormous economic value. Therefore, whether from the perspective of complying with national environmental protection policies or realizing a closed loop in the new energy industry chain, the recycling of lithium-ion batteries is a rigid demand with extremely high certainty.

Lithium-ion batteries are mainly used in three major scenarios: 3C products (computers, communications, and consumer electronics), electric vehicles, and energy storage. Since 2015—the "first year of electric vehicles" in China—the first batch of power batteries has entered a period of concentrated retirement, and the lithium-ion battery recycling industry, a sunrise industry, is rapidly taking shape. We believe that the application and manufacturing of lithium-ion batteries have already entered the TWh era (terawatt-hour era); next, the lithium-ion battery recycling industry will inevitably nurture clear trend-driven opportunities, and the "great wave of recycling" has only just begun. As an investment institution, we should fully recognize the great significance and huge investment value of lithium-ion battery recycling, practice the concept of ESG (Environmental, Social, and Governance) investment, and accelerate the layout of projects with core competitive advantages in recycling channel resources and recycling process technology. We also suggest that entrepreneurs should develop a sense of urgency: in the current initial stage of the lithium-ion battery recycling industry, amid the favorable external environment where the competitive pattern is not yet clear and the prices of recycled products such as lithium carbonate remain at a high level, they should firmly seize the "development window period." Relying on their core capabilities, entrepreneurs should clarify their corporate development positioning and strategies, and strive to stand out from the current "hundred schools of thought" in the recycling industry.

Although the lithium-ion battery recycling industry has a bright prospect, we must also clearly recognize that there are still many challenges to be addressed for the healthy development of the industry: At the policy and regulatory level, relevant detailed rules need to be formulated, improved, and implemented as soon as possible; At the enterprise level, in some regions, there is a phenomenon of "bad money driving out good money"—"small unlicensed workshops" seize the market of "regular enterprises" through vicious competition, resulting in a fragmented, scattered, and chaotic competitive pattern; At the recycling operation level, the standardization, safety, and environmental friendliness of operations are still insufficient, and the level of automation is low; At the recycling channel level, the recycling system is not yet perfect, and waste batteries are prone to flow into unregulated channels. However, "problems arising from development must be solved through development." We believe that these issues can certainly be resolved through the continuous exploration of governments at all levels and the industry. Here, we have conducted a brief analysis of the lithium-ion battery recycling industry. Due to time constraints and the limited expertise of the compiler, there may be omissions and shortcomings. We sincerely welcome comments and corrections, and eagerly look forward to in-depth exchanges with entrepreneurs, practitioners, researchers, and colleagues from investment institutions.