A worker dismantles a scrapped vehicle in a recycling factory in Tianjin Ziya Economic and Technological Development Area on June 15. China’s auto recyclers are recording low profits as they face a dwindling supply of vehicles. Photo: Zheng Xinqia, intern reporter/Caixin

A vehicle recycling factory in Tianjin has closed one of its automated dismantling lines due to high operational costs and a decrease in the number of available vehicles. Photo: Zheng Xinqia, intern reporter/Caixin

A worker operates machinery in a recycling factory in Tianjin on June 15. The capacity utilization rate of the largest vehicle recycling factory in the city was less than 20% last year, as it only received around 30,000 tons of scrapped vehicles. Photo: Zheng Xinqia, intern reporter/Caixin

The current market price for scrapped vehicles is around 2,500 yuan per ton. Recyclers make profits from the difference between the purchase prices and scrap steel prices. The drop in scrap steel prices this year has eaten into profitability in the industry. Photo: Zheng Xinqia, intern reporter/Caixin

Discarded steering wheels pile up in a recycle factory in Tianjin. Photo: Zheng Xinqia, Intern reporter/Caixin

Discarded electric buses outside a recycling factory in Tianjin on June 15. Dismantling new-energy vehicles could potentially yield higher profits for recyclers, as the prices of metals found in their batteries, such as lithium and cobalt, have increased significantly in recent years. Photo: Zheng Xinqia, intern reporter/Caixin

Workers retrieve a lithium battery from a dismantled scrap vehicle in Tianjin Saidemei New Energy Technology Co. Ltd.’s factory in Tianjin on July 4. The company generated nearly 200 million yuan in revenue last year through lithium battery recycling. Photo: Zheng Xinqia, intern reporter/Caixin

Workers transfer a battery pack in the Tianjin Saidemei New Energy Technology factory. Photo: Zheng Xinqia, intern reporter/Caixin

Workers examine recycled battery parts. According to the State Council Information Office, China has recycled 115,000 tons of electric-vehicle batteries in the first five months of this year. Photo: Zheng Xinqia, intern reporter/Caixin

Battery packs retrieved from scrapped vehicles. Photo: Zheng Xinqia, intern reporter/Caixin

Battery parts such as electrodes (left) will be crushed, separated, and thermally restored into reusable materials. Valuable metals including nickel sulfate (blue) and cobalt sulfate (orange) can also be recovered from the batteries. Photo: Zheng Xinqia, intern reporter/Caixin

Researchers examine recovered materials from recycled batteries. Photo: Zheng Xinqia, intern reporter/Caixin

Scrapped vehicles piled up at a scrapyard in Tianjin Ziya Economic and Technological Development Area on June 20. The number of qualified automotive scrapping firms surged from 700 at the end of 2019 to more than 1,200 three years later. Photo: Zheng Xinqia, intern reporter/Caixin