The electric vehicle (EV) industry in China has been experiencing remarkable growth in recent years, with production and sales consistently ranking first globallyThis rapid expansion of the new energy vehicle market has spotlighted power batteries, a critical component of these vehiclesAs the demand for electric vehicles surges, so does the interest in finding sustainable solutions for the management of power batteries throughout their lifecycle, particularly in the face of the impending wave of battery retirements.

According to Zhang Tianren, a prominent figure in the industry, "China has emerged as a pivotal force in the global automotive electrification transition, with the power battery sector being an essential element." In light of the increasing global demand for electric vehicles, the creation of a comprehensive safety loop for power batteries and the promotion of a high-quality battery recycling industry has garnered significant attention.

With the first batch of power batteries reaching the end of their average lifespan—typically ranging from five to eight years—there is a growing concern about how to recover these batteries efficiently

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Yu Qingjiao, president of the Battery Hundred People Association and secretary-general of the ZGC New Battery Technology Innovation Alliance, indicates that while the market for battery recovery in China holds vast potential, the industry is still in its infancyThere exists a notable gap between the total volume of retired batteries and the actual amounts being recycled, hindered by inadequate infrastructure and non-standardized management practices.

In terms of market dynamics, data from the China Association of Automobile Manufacturers (CAAM) indicates that in 2023, new energy vehicle production reached 9.587 million units, with sales hitting 9.495 million, marking year-on-year growth rates of 35.8% and 37.9%, respectivelyThe market share of electric vehicles has now reached an impressive 31.6%. Concurrently, figures from the China Automotive Power Battery Innovation Alliance report that the cumulative installed capacity of power batteries in 2023 hit 387.7 GWh, a notable increase of 31.6% from the previous year.

As the discussion on battery reuse and recycling intensifies, Zhang highlights the potential for a major retirement wave of power batteries in the near future

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High-tech industry forecasting suggests that by 2023 alone, China will see over 580,000 tons of retired batteriesProjections indicate that by 2025, the amount of spent power batteries requiring recycling could reach 137.4 GWh, equivalent to about 960,000 tons.

While the recycling industry is gaining momentum with support from national policies, Zhang warns of significant challengesThe country’s dependence on imported raw materials such as cobalt, nickel, manganese, and lithium—a vital resource for battery production—underlines a precarious situationDespite being the fourth-largest holder of lithium reserves globally, with extensive deposits mainly located in regions like Qinghai and Tibet, China’s dependency on imports exceeds 65%, making it vulnerable to geopolitical uncertainties.

Market fragmentation in the domestic battery recycling landscape is another pressing issue

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According to estimates, over 40,000 companies are registered for battery recovery, a stark contrast to the limited number of firms authorized under the Ministry of Industry and Information Technology's guidelinesThis discrepancy raises significant management challenges, with a substantial portion of batteries funneled into unregulated markets rather than legitimate recycling channels.

Zhang expresses his concerns, stating that the unchecked flow of waste batteries into these informal settings poses environmental hazards and contradicts the very essence of advancing new energy initiativesAdditionally, pricing instability in the battery recovery market complicates matters furtherThe limited access to retired batteries for certified companies, combined with their higher operational costs for compliance with environmental standards, puts them at a competitive disadvantage against smaller, non-certified operations offering inflated buy-back rates.

He estimates that nearly 70% of retired batteries are captured by these informal entities, which merely patch them for resale or dismantle them improperly,causing severe disruptions in the norms of battery recovery

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Describing used power batteries as a "city mine" with immense potential, Zhang warns that improper management could turn them into a significant environmental hazard, citing the detrimental effects of leftover lithium hexafluorophosphate and heavy metals like nickel and cobalt.

In terms of carbon emissions, which are significant within the battery sector, China has yet to establish comprehensive regulationsWith the European Union's new battery directives mandating the declaration of carbon footprints starting in February 2025, many domestic manufacturers are beginning to require upstream suppliers to disclose carbon emission dataHowever, the current infrastructure for carbon footprint assessment remains rudimentary and disjointed.

As the landscape of power battery recycling continues to evolve, the call for a robust ecosystem that encompasses the entire lifecycle of batteries has become more urgent

During the recent two sessions, Zhang advocated for creating a well-defined ecosystem around battery life management, emphasizing the importance of a digital tracking system that ensures comprehensive accountability from production through to recyclingHe believes that integrating the roles of manufacturers, automakers, and recycling enterprises will enhance collaboration and resource optimization.

Moreover, Zhang sees the need for a structured approach to managing carbon footprints within the battery production chainHe proposes the establishment of robust standards for measuring and reporting emissions, which, in the long run, could significantly mitigate the environmental impacts associated with battery production and usage.

To further advance the industry, Zhang called for enhanced oversight of the qualifications of recycling businesses, recommending stricter criteria for companies wishing to operate under the regulatory white list