Key facts
- China is implementing a crackdown on illegal battery recycling operations.
- New regulations mandate EV and battery manufacturers to collect retired power cells.
- A significant wave of EV battery retirements is expected in the coming years.
- The battery recycling market is projected to exceed 100 billion yuan ($14.8 billion) by 2030.
- The industry faces challenges including fragmentation, price undercutting, and weak profitability due to fluctuating lithium prices.
China is preparing for a substantial increase in retired electric vehicle (EV) batteries as its government intensifies efforts to regulate and clean up the rapidly expanding recycling industry. The Ministry of Industry and Information Technology (MIIT), along with four other agencies, initiated a nationwide crackdown in April on illegal battery recycling operations. This campaign follows new regulations that require EV manufacturers and battery producers to collect end-of-life power cells.
The regulatory push comes as China anticipates a surge in retired clean energy products, with EV batteries expected to reach their end-of-life years ahead of solar panels and wind turbine components. The power battery sector experienced a boom in the early 2020s, and with a typical service life of five to eight years, many of these batteries are now nearing retirement. MIIT data indicates that retired power battery volumes grew by over 30% to 400,000 tons in 2025, with projections suggesting these volumes will double by 2027-2028. By 2030, retired power battery volumes are expected to reach 3.5 million tons, potentially creating a battery recycling market worth over 100 billion yuan ($14.8 billion), according to Frost & Sullivan.
Beyond batteries, solar panel retirements are forecast to surge after 2030, reaching 20 million tons by 2040, with recovery value growing significantly. Similarly, annual retired wind power capacity is expected to reach about 10 gigawatts by 2030.
The influx of recyclables highlights issues regulators aim to address. The domestic recycling industry has seen a proliferation of new entrants, leading to price wars and premiums paid for scarce retired equipment. Unlicensed operators have become common, undercutting compliant recyclers through improper dismantling and disposal practices. As of August 2025, China hosted over 180,000 battery-recycling companies, with more than 60% established in the preceding three years. The industry remains fragmented, with less than 30% of retired power batteries collected through formal channels.