The year 2025 marks a significant turning point for the retirement of electric vehicle batteries, as it has been dubbed the “year of battery retirement.” According to public data, with the number of new energy vehicles in China surpassing 31.4 million, the wave of retiring power batteries, which typically have an eight-year lifespan, is approaching. The Battery Recycling Utilization Committee of the China Electronics and Energy Saving Technology Association predicts that by 2025, the volume of retired power batteries in China will reach 820,000 tons; starting in 2028, this figure is expected to exceed 4 million tons, leading to an industry output value for battery recycling exceeding 280 billion yuan.
Battery recycling is gradually becoming an area of intense focus. It is crucial to enhance the capacity for battery recycling not only for efficient resource utilization but also for the sustainable development of the new energy vehicle industry. Retired batteries are not mere waste; they are valuable resources containing significant potential. Their secondary utilization and resource recovery play a vital role in the circular economy. The Ellen MacArthur Foundation emphasizes the importance of front-end design to improve the quality of recycling, making the secondary utilization and resource recovery of retired batteries key components of this economy.
Secondary utilization involves repurposing retired batteries for use in applications such as energy storage and low-speed electric vehicles, where the performance requirements are less stringent, thereby extending their useful life and maximizing resource efficiency. Resource recovery entails processes like disassembling and shredding the retired batteries to extract metals such as lithium, nickel, cobalt, and manganese, facilitating re-resource utilization. This process not only helps reduce resource consumption but also significantly decreases reliance on imported metals, thereby holding substantial strategic significance.
However, each stage of battery recycling demands considerable investment. Building a recycling system, deploying collection points, identifying clients for secondary utilization, and managing metal recovery processes, along with the safe disposal of non-recyclable materials, all require substantial financial backing. If these investments do not yield adequate economic returns, battery recycling could turn into a purely environmental burden, increasing net costs for businesses, which may ultimately be passed on to end users. This situation is clearly detrimental to the sustainable development of the green economy.
Fortunately, China’s battery recycling sector has made notable progress. In February 2025, the State Council approved the Action Plan for Improving the Recycling System for New Energy Vehicle Power Batteries, emphasizing the use of digital technology to enhance monitoring of battery flows throughout their lifecycle, ensuring traceability from production to sales, disassembly, and utilization. The Ministry of Industry and Information Technology has also revised and published the Industry Standards for Comprehensive Utilization of Waste Power Batteries from New Energy Vehicles (2024 Edition), significantly raising technical thresholds, such as increasing lithium recovery rates from 85% to 90%, ensuring electrode powder recovery rates of no less than 98%, and limiting aluminum impurity content to below 1.5%.
At the enterprise level, the domestic battery recycling market has seen diversification. For instance, BYD, a leading automotive manufacturer, established a battery disassembly and recycling research team as early as 2015. By the end of 2023, it had set up recycling plants in Shanghai and Guangdong, achieving an annual production capacity of 1.3 GWh. CATL, a major battery manufacturer, entered the recycling sector in 2013 through its acquisition of Bangpu Recycling, with its wholly-owned subsidiary achieving remarkable success in the recycling of lithium batteries and leading the industry in the recovery rate of recycled metal materials. Greenme, a specialized recycling company, has developed key technologies for battery resource recovery and recycling, establishing a nationwide collection network and forming partnerships with many well-known new energy vehicle and battery production companies for targeted recycling of retired power batteries.
Despite the support from policies and participation from enterprises, challenges remain in the recycling and reuse of electric vehicle batteries. The low utilization rate of collection points is a primary issue. Although policies have spurred the establishment of collection points, the limited number of retired batteries and the inadequacy of recovery channels have led to low utilization rates at many locations. The market is fragmented and often lacks effective management, resulting in a significant flow of batteries into gray or illegal channels, which disrupts market order. The diversity of battery types and inconsistent standards further complicate recycling efforts. The multitude of designs and materials used in power batteries poses significant challenges for recycling companies, making it difficult to achieve economies of scale and seriously hindering industry growth.
Moreover, the disassembly process presents safety hazards. Currently, most disassembly work relies on manual labor, with varying levels of worker skill. Coupled with the flammable and explosive nature of battery packs, this can lead to short circuits, leaks, and, in severe cases, fires or explosions. From an economic perspective, the financial viability of recycling is still inadequate. While recovering metals from battery electrodes can yield some revenue, the complex processes and immature business models make profitability challenging. Technically, there are numerous difficulties in the pre-treatment and separation stages of recycling. For example, recovering clean aluminum foil from ternary batteries is particularly challenging, while leaching and recovering active materials from electrodes also present significant hurdles.
To address these challenges, a multifaceted approach is needed. In terms of policy regulation, it is essential to strictly implement the requirements of the Action Plan and reinforce the responsibility of enterprises. New energy vehicle manufacturers must sign agreements with recycling companies and submit recycling plans during vehicle approvals to be included in local promotion directories. Additionally, a stronger crackdown on illegal recycling channels is required to standardize market order. In terms of technological development, encouraging enterprises to increase investment is crucial. On one hand, it is necessary to develop more efficient and environmentally friendly disassembly and recycling technologies to improve resource recovery rates and reduce costs; on the other hand, utilizing advanced technologies such as the Internet of Things and big data for lifecycle tracking of retired batteries, alongside the introduction of intelligent disassembly robots, can enhance both efficiency and safety in the disassembly process.
From a market operation perspective, fostering collaboration between upstream and downstream industries is encouraged. Automotive manufacturers, battery companies, and recycling enterprises should strengthen cooperation to create a stable recycling supply chain. For instance, automakers could establish recovery channels to direct retired batteries to qualified recycling companies, while battery manufacturers could leverage their technical advantages to participate in the recovery and processing process, enhancing resource utilization efficiency. Innovative business models, such as battery leasing and trade-in programs, should also be explored to lower consumer costs and boost battery recovery enthusiasm. Furthermore, public education campaigns should be strengthened to raise consumer awareness of the importance of battery recycling. Through various channels, the significance of battery recycling should be promoted to encourage consumers to properly dispose of retired batteries at authorized collection points, fostering a positive social atmosphere.
