Research on Power Battery Full Life Cycle Asset Management (Annual Report of Power Battery Full Life Cycle Joint Innovation Center) December 2020 Foreword China EV100 is committed to becoming a high-level third-party think-tank for the industry of electric vehicles (EVs) and related fields in China, and conducting research is the top priority for building the think-tank. China EV100 mainly aims to create a platform, integrate internal and external resources, and organize professionals to conduct surveys and researches, so as to eventually form research reports that can be used as references for decision making. This Research Report was formulated based on interim research results and for internal reference only. Since it's not for public release, sources are not provided for the data cited, the viewpoints collected and the research evidences used for now. As some information is from external sources, and is not verified with the related enterprises one-by-one, if the analysis about some enterprises is inaccurate, the actual situation should prevail. Project Team Team Leader: Zhang Yongwei Deputy Team Leader: Xu Erman Members: Zhu Jin, Zhang Jian, Wang Xiaoxu, Yan Yancui, Li Songzhe (In no particular order) Acknowledgement Bao Wei, General Manager of Zhejiang Huayou Recycling Technology Co., Ltd. He Long, CEO of Findreams Battery (BYD) Co., Ltd. Jia Junguo, Level-3 Consultant of State Grid Electric Vehicle Service Co., Ltd. and Chairman of SEETIC Pan Fangfang, Deputy General Manager of China Lithium Battery Technology Co., Ltd. Sun He, Vice President of SK Innovation E-mobility Business Xu Zhibin, General Manager of ADI China Automotive Business Zhao Xiaoyong, General Manager of Beijing SDM Resource Recycling Research Institute Co., Ltd. Vale Minerals China Co., Ltd. (In the order of initial Chinese phonetic alphabet of surname) Abstract With the advent of the electrification era, the roles of power battery as five centers are becoming clear: It has become the cost center, security center, important data generation center, scarce resource consumption center and energy storage center of EVs. Battery manufacturers and vehicle manufacturers are constantly promoting the coordinated development across all critical stages of the power battery lifecycle and improving the efficiency of asset operation and management of the power battery lifecycle through technological innovation and model innovation. This report focuses on such three crucial stages of the power battery lifecycle as R&D and production, in-vehicle use, and recycling, and through literature review, enterprise questionnaire and field investigation, elaborates on the significance, progress and main obstacles of technological and model innovations in some key fields related to power battery asset management in recent years, and puts forward development suggestions. 1. R&D and production: At this stage, the industry strives to improve the lifecycle performance of power batteries and reduce the lifecycle cost by strengthening the technological R&D of battery management system (BMS) and the standardization of power batteries. Favorable policies and standards are promulgated to support the technological innovation of BMS and encourage the standardized development of power batteries, multi-enterprise layout and application of wireless BMS. Meanwhile, standardized power battery modules start to be used in commercially available models. 2. In-vehicle use: At this stage, the industry explores and applies innovative technologies and business models such as battery swapping, and strives to improve the management efficiency of the power battery lifecycle by leveraging the advantages of centralized resource management. The recently issued government policies have enhanced support for battery swapping, research institutions and enterprises have reserved key technologies in battery swapping, and various main players have arranged the battery swapping models and speeded up the construction of pilot projects. 3. Recycling: At this stage, the industry fully exploits the surplus value of power batteries and achieves the closed-loop lifecycle management of power batteries by improving the recycling economy of power batteries. The framework of support policies and standards has been basically established and gradually consummated. Driven by the effective promotion of EVs in some regions, the scale of recycling service sites has begun to take shape, cascade utilization of power batteries in some low-speed vehicles and energy storage projects has been proved to be economical, and the economy of lithium iron phosphate recycling has been improved through process optimization. 4. Data platform: Lifecycle data is an important asset to enhancing the power battery management efficiency, and the data platform is a significant carrier of power battery lifecycle data. Relevant policies advocate the lifecycle data concept, several main players actively build data platforms in various stages of the power battery lifecycle, and some enterprises have begun to explore the construction scheme of power battery lifecycle data platform. In order to enhance the power battery full lifecycle management efficiency, we have to overcome some obstacles: 1. Policies and regulations: First, the responsibility for safety under the battery swapping model is yet to be defined, so as to further clarify the boundaries of rights and responsibilities for asset operation; Second, the regulatory oversight of the recycling industry for retired batteries is to be enhanced, and the corresponding policies are urgently needed to promote closed-loop asset circulation; Third, there is no regulatory policy for the lifecycle information of power batteries and no effective information support for asset management; Fourth, there is no incentive mechanism for EVs to be connected to power grids and take advantage of the peak-valley electricity price difference, and the strategy for improving asset operation efficiency has failed. 2. Industry standards: First, some BMS testing standards are yet to be updated and improved, to increase the industry's overall level of battery state assessment and asset maintenance; Second, there are too many sizes for power batteries in the existing national standard, and the large-scale asset management faces various challenges; Third, there is a serious lack of battery swapping standards, and the channels for the broad circulation of assets are blocked; Fourth, there is a lack of standards for "vehicle-pile-grid" current and information exchange, hampering the efficient energy interaction between EVs and grids; Fifth, the data standards for various stages of the power battery lifecycle are not unified yet, and the integration of data assets is inefficient. 3. Key technologies: First, the BMS is the key foundation for maintenance and management of battery assets, and its key algorithm needs to be further optimized; Second, battery control strategies haven't taken the vehicle-to-grid (V2G) scenarios into consideration yet, and the application value of assets on the grid side is yet to be further explored; Third, further breakthroughs are yet to be made on the common technologies in the battery recycling industry, to increase the residual value of assets. 4. Commercial application: First, it's difficult to build an industry consensus in the field of passenger vehicles for the standardization of battery packs, which significantly increases the cost of asset operation; Second, constructing and operating battery swapping stations cost too much, which exerts some pressure on business operation; Third, the outcome of increasing asset value through the V2G model is dramatically compromised due to the lack of efforts to modernize power grids for smart operations and the lack of a warranty system for EVs; Fourth, the overall costs of the battery recycling industry are high, and the liquidity of assets is weakened; Fifth, there isn't a commercialization model for the data products of power batteries, and data owners are not highly motivated. Regarding the abovementioned problems in development, the suggestions are as follows: 1.Policies and regulations: First, increase policy support, standardize regulations on the battery swapping industry, and create an ecosystem for large-scale asset management ecosystem; Second, introduce legislation on battery recycling, and keep improving the management system across the industry, to ensure the realization of closed-loop asset management; Third, formulate a regulatory policy on the lifecycle data of power batteries, to ensure the integrity and effective utilization of data assets; Fourth, refine the peak-valley price mechanism for end-users and the regulatory measures for connecting EVs to power grids, to build a system for improving the value of assets. 2. Industry standards: First, improve the national standard system for BMS testing and standardization of power battery size, to provide the basis for effectively increasing the efficiency of asset operation; Second, accelerate the introduction of a standard for battery swapping, to guide the standardized development of the industry; Third, work on communication standards supporting the two-way charging and discharging of EVs, and promote the adoption of the new models; Fourth, improve the data standards for various stages of the power battery lifecycle, and lay a foundation for circulation and integration of data assets. 3. Technology R&D: First, attach importance to innovation with the software and hardware technologies for