The accelerated development of the power battery recycling system and the trillion-yuan market urgently need to solve the dilemma of "the formal sector being unable to meet demand."

This newspaper (chinatimes.net.cn) reporter Liu Kai, Beijing

Recently, the Department of Energy Conservation and Comprehensive Utilization under the Ministry of Industry and Information Technology convened a meeting in Beijing. The meeting held discussions on issues such as providing innovative policy support, improving the recovery mechanism, and完善ing the standards system. Representatives attending the meeting said they will build consensus, and speed up the improvement of the recovery and utilization system.

The convening of this symposium comes at a crucial window period in which policies for the recovery and utilization of motive power batteries are being implemented in a dense and rapid manner. Not long ago, six departments including the Ministry of Industry and Information Technology jointly issued the Interim Measures for the Administration of Recovery and Comprehensive Utilization of Waste Motive Power Batteries for New Energy Vehicles. In the industry, it has been viewed as the strictest new recovery regulation. During the Two Sessions, a draft of the Ecological Environment Code was also revised, upgrading green design provisions for electrical and electronic products, motor vehicles, and other products from advisory clauses to legal requirements.

A wave of retirements continues to expand

In 2025, China’s sales of new energy vehicle new cars are close to half of total new car sales, and this proportion is up by 7 percentage points compared with the same period last year. Meanwhile, based on the 5- to 8-year service life of motive power batteries, the period from 2025 to 2030 will be the peak time for motive power battery retirements. According to estimates by research institutions, by 2030, the amount of waste motive power batteries generated in that year will exceed 1 million tons, which means that in the coming years, the scale of retired batteries will show an accelerating upward trend.

Along with growth in scale, the evolution of battery technology routes is also affecting the profitability logic of the recycling industry. In the early new energy vehicle market, ternary lithium batteries dominated. These batteries contain high-value metals such as nickel and cobalt, and the economic value-added of recycling is relatively higher. With technological progress and cost considerations, the market share of lithium iron phosphate batteries continues to rise. Research data show that among decommissioned batteries in the medium and long term, lithium iron phosphate batteries account for about 69%, becoming the absolute mainstay. The reporter has learned that the wet-process recycling gross margin of ternary lithium batteries can reach around 10%, while the recyclability economics of lithium iron phosphate batteries highly depend on the price volatility of lithium carbonate. At the current price level, the wet-process recycling gross margin for lithium iron phosphate cathode powder is below 4%. During this year’s Two Sessions, National People’s Congress deputy and Chairman of Huayou Cobalt Industry, Chen Xuehua, pointed out that the recycling of lithium iron phosphate batteries faces three major problems: the closed-loop of the recycling business depends on the price of lithium metal, resulting in weak profitability stability; insufficient resource utilization of phosphorus-iron slag leads to resource waste; and as the wave of lithium iron phosphate battery retirements is approaching, a modern circular industry system is needed to support high-quality development.

The shrinking of profit space is only one aspect. A deeper challenge lies in the technical processes. The wet-process recycling of lithium iron phosphate batteries produces large amounts of iron-phosphorus waste. At present, there are limited high-value utilization pathways, and processing costs remain high. Although ternary lithium batteries have higher metal value, differences in battery formulations among different manufacturers are significant, and the extraction and separation processes are also complex. During the Two Sessions, National People’s Congress deputy and Chairman of Bump Cycle, Li Changdong, said that battery recycling and utilization covers processes such as physical treatment, chemical treatment, and material synthesis. Chemical treatment involves the use of many hazardous chemicals, and a segmented layout presents high safety risks.

Automobile industry observer Zhao Yongqi told the reporter of 华夏时报 that the current difficulties in motive power battery recycling are largely “historical debts” left over from earlier design stages. In the early design stage, motive power batteries were rarely considered for convenience of disassembly after retirement. The structure of battery packs is complex, and there are various ways to link the cell modules, which also leads to the need for a large amount of manual operation during disassembly, resulting in low efficiency and safety risks. In addition, there are significant differences in battery specifications, structural designs, and management system among different companies, with low standardization levels, further increasing the difficulty of downstream processing.

During the Two Sessions, National People’s Congress deputy and Chairman of Sinovation Ventures, Liu Jingyu, also proposed that to achieve efficient recycling, standardization should be done at the materials system level and simplification at the structural level. If the design is simplified and standardized, in the future it will be possible to mechanically perform simple disassembly, thereby achieving the regeneration of materials.

A mismatch in supply and demand in the recycling market

Compared with the scale of the battery retirement wave, the capacity of the recycling system is under test. According to data from Tianyancha, as of September 2025, the number of domestic companies related to battery recycling has surged to 190k, far exceeding actual processing demand. Although the Ministry of Industry and Information Technology has already released five batches of 156 “white-list” enterprises that meet industry norm requirements, this system lacks mandatory legal force. Some “white-list” enterprises have issues such as “registered names without real substance” and insufficient actual recycling capacity, weakening the industry’s compliance and standardization.

This institutional shortcoming is particularly evident in specific market transaction links. Companies or platforms that hold waste battery resources often sell batteries through bidding, making the “highest price wins” phenomenon common. Regular recycling enterprises need to bear compliance costs such as environmental protection, safety, taxes, and the construction of traceability systems, and operating thresholds are high. In contrast, small workshops almost avoid all environmental protection and safety investments, so their operating costs are extremely low, and in bidding they often can offer higher purchase prices. This leads to large numbers of retired batteries flowing into non-compliant channels. Li Changdong revealed that currently, China’s rate of standardized recycling of waste motive power batteries is still below 50%. Zhou Xiaohang, senior manager of a project team at the Natural Resources Protection Association Clean Power, previously said in an interview that about 75% of waste motive power batteries have not entered the formal recycling network.

The reporter, after searching on platforms such as Xianyu and Xiaohongshu, found that there are many posts offering on-site recycling of motive power batteries. A merchant who said that they collect waste batteries across different parts of the country told the reporter: if customers are not convenient to disassemble, they can directly tow away the whole scrapped vehicle, and with the help of a disassembly workshop they know, they can take out the battery pack. Ultimately, what is needed is just the battery cells inside. After processing, these dismantled batteries are shipped in batches to downstream battery pack assembly plants, and ultimately flow into application fields such as two-wheelers, three-wheelers, power banks, and energy storage.

Even for the portion of batteries that flows into legitimate channels, the path to recovery and utilization is not smooth. At present, data exchange channels among vehicle OEMs, battery factories, and recycling enterprises have not yet been fully connected. Key data for a single motive power battery—production information, loading records, maintenance history, replacement status, and so on—are scattered among different entities. When recycling enterprises obtain retired batteries, they often cannot accurately assess the battery’s health condition and remaining value, affecting the efficiency and safety of cascade utilization and regeneration.

In response to the above issues, the newly issued Measures make multiple institutional arrangements. Wang Peng, Director of the Department of Energy Conservation and Comprehensive Utilization of the Ministry of Industry and Information Technology, introduced at a press conference that the Measures adhere to the basic approach of “all channels, all links, and the full life cycle” management. In channel management, it focuses on designing the “vehicle-and-battery integrated scrappage” system: when scrapping a new energy vehicle, a motive power battery must be included; otherwise, no deregistration registration will be processed. In link management, it clarifies the responsibilities and obligations of various entities in each stage such as battery production, sales, repair, replacement, disassembly, recycling, and comprehensive utilization. In life-cycle management, it proposes establishing a digital identity management system for motive power batteries of new energy vehicles. Using motive power battery coding as the information carrier, it links information across stages including production, battery loading and sales, battery swapping, repair and replacement, vehicle scrappage, battery recycling, and comprehensive utilization, to realize full life-cycle flow monitoring and information-based traceability.

The implementation of the digital identity system means that every motive power battery will be assigned a unique code and connected to a nationwide unified traceability information platform. Zhao Yongqi believes this helps achieve “source can be checked, destination can be tracked, nodes are controllable, and responsibility can be identified,” and provides technical support for regulatory authorities. The effectiveness of the system still needs to be tested in practice.

In addition, the Measures also clarify administrative penalty measures for violations. For behaviors such as failing to deliver waste motive power batteries as required, failing to fulfill recycling responsibilities, and violating coding and information reporting requirements, it sets administrative penalties such as orders to correct, warnings, and fines, and clarifies the entities responsible for implementing the administrative penalties. Wen Xuefeng, Deputy Director of the Department of Solid Waste and Chemicals under the Ministry of Ecology and Environment, said that the Ministry of Ecology and Environment will continue to enforce strict law, continuously strengthen routine enforcement and oversight of disassembly and treatment enterprises, and include illegal disassembly and disposal activities in special enforcement campaigns for illegal dumping and disposal of solid waste.

责任编辑：Li Yan’an Editor-in-Chief: Yu Jianping

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