Recently, at a "trade-in for new" press conference held by the Ministry of Commerce, data related to the recycling of scrapped vehicles was released: In May, the recycling volume of scrapped vehicles in China reached 523,000, a year-on-year increase of 55.6%; from January to May, the national recycling volume of scrapped vehicles was 2.2 million, a year-on-year increase of 19.4%, and it is expected to achieve the annual target of 3.78 million.

At the same time, SAIC Passenger Cars, Geely Holding Group, Great Wall Motors, Changan Automobile, Chery Automobile, and NIO have all disclosed related recycling data in their recent Environmental, Social, and Governance (ESG) reports. Among them, NIO's all models have a vehicle recyclability rate generally exceeding 98%.

Expected to Break Through the Million-Vehicle Mark in This Year's Scrap Total

In the ESG reports released by various car companies in 2023, they all emphasized their determination to actively implement the Extended Producer Responsibility (EPR) system, as well as the effectiveness and data related to it.

For instance, Great Wall Motors achieved the recycling of 4,325 tons of scrapped vehicles in 2023, with more than 10,000 parts recycled per vehicle, and the recyclable value reached 5.76 million yuan; Changan Automobile's 2023 ESG report disclosed that by the end of 2023, the comprehensive utilization rate of recycled resources from scrapped automobiles had reached 75%, the recyclability rate of vehicles reached 96%, and the utilization rate of recycled materials for key parts was no less than 5%; Chery Automobile's all models have a vehicle recyclability rate as high as 95%, and the reusability rate also reached 85%; NIO's all models have a vehicle recyclability rate generally exceeding 98%, with the lowest model ES8's reusability rate also reaching 90%, and the highest model ES6 is close to 92%.

"The total scrap volume is expected to reach nearly ten million units in 2024," said Cui Dongshu, Secretary-General of the Passenger Car Market Information Joint Conference of the China Automobile Circulation Association. He believes that the current passenger cars with emission standards below the National III standard, some of which have been in use for more than 13 years, are in poor condition and have serious emission pollution; while the vehicles with the National IV emission standard also have an average age of about 10 years, and their emission pollution is also a real problem. The series of "trade-in for new" policies introduced this year are a major benefit for the automobile market, which can accelerate the elimination of old models and promote the upgrade of the automobile industry and automobile consumption.

Hu Fenglin, a researcher at the New Energy Innovation Technology Center of Shenzhen Advanced Technology Research Institute, told reporters from China Automobile News that in response to some unreasonable phenomena in the scrapping and dismantling industry in previous years, the "Regulations on the Recycling of Waste Motor Vehicles" and its "Implementation Rules" were implemented in 2020, and in 2021, the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Finance, and the Ministry of Commerce jointly issued the "Notice on Printing and Distributing the Pilot Implementation Plan for the Producer Responsibility Extension of Automobile Products" (hereinafter referred to as the "Notice"), which clearly takes the production enterprise as the main body, implements the concept of life cycle management, and stimulates the enthusiasm of all parties to fulfill their responsibilities through innovative policy incentive mechanisms, thereby improving the comprehensive utilization rate of waste vehicle resources. The "Notice" proposes that by 2023, a number of waste vehicle recycling and utilization models with promotional value, taking automobile production enterprises as the main body of responsibility, will be formed to ensure that the comprehensive utilization rate of recycled resources from scrapped cars reaches 75%, the recyclability rate of cars reaches 95%, and the utilization rate of recycled materials for key parts is not less than 5%. From the current situation of the car companies that have released the 2023 ESG report, they have basically formed a recycling system and have achieved or exceeded the targets proposed in the "Notice", laying a good foundation for the next step.

Helping to Reduce Carbon Emissions and Building a Complete Recycling System

Scrap car recycling and reuse are not only the practical needs of the automotive industry development but also the due meaning of regulating the order of the recycling field and promoting environmental protection.

Combined with the "old for new" policy implemented this year, how to reasonably, standardly and effectively digest the "old" while increasing the "new" is also the specific connotation of promoting policy implementation. "According to the relevant policies introduced in China, the scrapping, recycling, and dismantling of cars are an important part of the recycling and utilization of renewable resources," said Cui Haoping, a researcher at the Guangdong Urban Economic Development Research Center, to the reporter. Scrap car dismantling and recycling refers to the recycling of scrapped vehicles under the premise of being legally compliant, and carrying out harmless treatment, dismantling reusable parts and main assemblies, as well as new energy vehicle batteries, etc. In the downstream application market, the recycling and dismantling are related to the recycling and reuse of metals and non-metal materials, which is of great significance for protecting the environment, saving resources, and promoting the circular economy. He gave an example that after a scrapped small car is refinedly dismantled, it can be broken down into about 36 kg of rubber, 70 kg of plastic, 740 kg of scrap iron, 100 kg of aluminum, etc. Effective recycling and reuse of these can reduce the demand for primary resources and reduce the pressure of mineral mining on environmental protection.

Previously, data released by relevant departments showed that in 2020, there were about 18 million scrapped cars in China, but only about 2.4 million entered formal dismantling enterprises, accounting for only 13.33%. "There are multiple benefits to the recycling and utilization of scrapped vehicles. If they cannot be effectively and standardizedly recycled, they will not play a positive role in resource utilization or environmental protection," said Lin Shuren, a researcher at the East China Automobile New Material Technology Research Institute, to the reporter of China Automobile News. In the past, there was a "dislocation" phenomenon, such as the difficulty for formal scrapped vehicle recycling and dismantling enterprises to collect cars, while a large number of scrapped cars flowed to informal channels. At the same time, some places have insufficient unified management of out-of-town recycling; the waste treatment link is not smooth enough; the recycling market price competition is fierce, and formal recycling enterprises cannot compete with informal channels and other phenomena, which have hindered the development of the scrapped vehicle recycling industry to a certain extent. After the implementation of policies such as the "Regulations on the Recycling of Waste Motor Vehicles" and its "Implementation Rules", with the supervision and inspection carried out by various places, the order of the scrapped car recycling market has improved significantly.

It is against this background that car companies actively build a recycling system at the enterprise level to help the effective recycling and reuse of scrapped vehicles and related parts.

SAIC Group's 2023 ESG report proposed that under the concept of the producer responsibility extension system with the core of building a scrapped car recycling system, SAIC Passenger Cars is committed to playing the main role in the whole life cycle of automotive products. By joining hands with recycling and dismantling companies, a standardized recycling system is created; a reverse recycling system is constructed, and the comprehensive utilization scenario is expanded; the whole life cycle carbon emission evaluation is improved, and a green supply chain is created; data recording is carried out, and information is disclosed