With the vigorous growth of the new-energy vehicle (NEV) industry, China has emerged as a global leader in both power battery production and consumption. Based on estimated battery lifespans, China is on the cusp of a significant phase of power battery retirement. State Administration for Market Regulation (SAMR) statistics indicate that in 2024, China's retired power batteries amounted to approximately 400,000 tons, with recycling volumes exceeding 300,000 tons, representing a market size of over 48 billion yuan ($6.8 billion).

Xu Guangjian, a public policy professor at the School of Public Administration and Policy of Renmin University of China, explained to People's Daily that waste power battery recycling and utilization primarily follow two models: resource recovery through the extraction of valuable raw materials like lithium, cobalt and nickel, and secondary applications where batteries are tested, disassembled and reassembled for uses such as emergency power sources or energy storage equipment.

"Power batteries are rich in critical strategic resources such as lithium, cobalt and nickel," Liu Hongsheng, an official with the SAMR, told People's Daily. Improper handling of these metals from spent batteries poses significant safety risks, including fires and explosions. Furthermore, the heavy metals and hazardous substances present can lead to severe pollution of soil, water and air.

However, these critical metals are precisely resources China has a high demand for. Used power batteries can contain substantially higher concentrations of these metals than virgin ore, presenting an immense opportunity if effectively utilized—akin to discovering a new mineral source. Efficient extraction and regeneration of these vital metals can significantly reduce reliance on mining and imports.

Disorderly growth 

China produced over 13 million NEVs in 2024, maintaining its global top position for 10 consecutive years. Despite the vast potential of China's power battery recycling market, a pressing issue is the lack of standardization in recycling and utilization practices.

The soaring prices of essential battery resources like lithium, cobalt and nickel have fueled a dramatic increase in the number of waste power battery recyclers. Corporate information provider Tianyancha reports approximately 196,000 battery recycling enterprises exist in China. Over the past five years, newly registered related enterprises have steadily climbed, peaking in 2024 with over 38,000 new registrations. As of November 18 of this year, 36,000 new companies had registered, a 14.5-percent increase compared to the same period in 2023.

Zhu Liyang, President of the China Association of Circular Economy, told Economic Daily that while this indicates an industry boom, it also presents the challenges of disorderly competition.

To guide industry development, the Ministry of Industry and Information Technology has released a "white list" of 156 enterprises that meet industry standards. However, legitimate recycling companies are facing a "starvation" dilemma. Li Zhenbiao, Director of the Circular Economy Research Center at the China Automotive Strategy and Policy Research Center, told People's Daily that waste power batteries are often sold via auction to the highest bidder. This allows smaller recyclers, who invest less in environmental protection and safety, to outbid compliant companies.

Fu Qiang, President of Battery Science and Technology Co. Ltd., noted that "white list" enterprises have a combined annual processing capacity exceeding 1 million tons, with plans for over 4.25 million tons. Yet, most are operating below full capacity.

Many car owners desire a more consumer-friendly recycling system. A Beijing-based NEV owner surnamed He told People's Daily, "For example, when buying a car, 4S stores (full service car dealerships offering sales, spare parts, services and surveys) could provide clear recycling guidelines and a dedicated contact, or we could use a one-click reservation via the car manufacturer's app. This way, we'd know who to contact and how to hand over batteries, preventing people from cutting corners or selling to unreliable channels for a higher price."

Furthermore, power battery recycling is hampered by suboptimal technological levels. Disassembly currently relies heavily on manual labor, which is inefficient, costly, and poses significant risks of short circuits, leakage, fires and explosions. The processing equipment is also rudimentary, and a mature, efficient comprehensive utilization system has yet to be established.

Solutions 

In response, the State Council, China's highest state administrative organ, approved an action plan in February to improve the used NEV power battery recycling system. The plan aims to create a standardized, safe and efficient recycling and utilization framework, ensuring power batteries are traceable throughout their entire lifecycle, from production and sales to disassembly and utilization.

Addressing market irregularities, the SAMR has issued a suite of national standards for power battery recycling and utilization. These include detailed guidelines for recycling outlets of power batteries, covering site selection, facilities and personnel. For black mass, a fine, powder-like mixture obtained during the process of recycling lithium-ion batteries, a lack of unified technical standards has impacted metal extraction. The Regenerated Black Mass for Lithium-ion Batteries national standard now defines its properties, classification, chemical composition and hazardous substance limits, aiming to enhance downstream smelting safety and environmental friendliness. Furthermore, the ministry also sets standards for recovery: no less than 98 percent for nickel, cobalt and manganese, and no less than 85 percent for lithium. 

"Technological innovation is the most urgent task for enterprises," Zhang Yuping, President of Wuhan Power Battery Recycling Technology Co. Ltd., told Economic Daily. He emphasized that with the continuous emergence of new material batteries, companies must develop advanced technologies to meet diverse recycling needs.

Echoing the need for innovation, Cao Wenyu, Deputy General Manager of BYD Co. Ltd.'s Second Business Division, told China Industry News, "We integrate the concept of 'easily dismantlable and recyclable' into our entire vehicle design, providing convenience for recycling from the source."

Beyond technological advancements, institutional refinement is also vital. In an interview with China Industry News, Wang Jianxin, Vice Chairman and Executive Secretary General of the China Battery Industry Association, advocated for an Extended Producer Responsibility system. This policy would assign responsibility for the battery's full journey—from production to recycling—to the manufacturers. Practically, this entails "vehicle-battery separation," where the battery is purchased independently, making the battery producer liable for its maintenance, servicing and insurance. This approach aims to alleviate user concerns, such as the high cost of NEV insurance, while ensuring responsible usage and effective recovery. BR

Copyedited by G.P. Wilson 

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