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According to the Department of Energy Conservation and Comprehensive Utilization of the Ministry of Industry and Information Technology (MIIT) at the 2026 World Power Battery Conference, China's traction batteries will enter large-scale retirement during the 15th Five-Year Plan period. In 2025, the comprehensive utilization volume of traction batteries from new energy vehicles exceeded 400,000 tons, with recycling service outlets covering more than 300 prefecture-level cities.

Next Policy Directions

  • Gradually improve the system of laws, regulations, and standards;
  • Strengthen whole-chain management;
  • Accelerate innovation in technologies and business models to stimulate industry momentum.

The Combined Effect of the "Cascade Use" Phase-Out

In the same period, MIIT Announcement No. 20 of 2026 repealed the "cascade use" provisions. Read together, the two developments make the industry direction clear: the outlet for retired batteries lies in resource recovery paths such as dismantling, crushing, sorting, and smelting, and compliant enterprises compete on standardized processing capability and full-chain traceability rather than concept packaging.

Three Compliant Outlets for Retired Batteries

Once they leave the generator, retired traction batteries generally have only three compliant routes:

  • Cascade use — battery packs with degraded but not failed capacity are tested, dismantled, and reassembled for energy storage, backup power, and similar applications. Note that MIIT's 2026 announcement has repealed the "cascade use" provisions, so the original whitelist mechanism has changed; confirm the latest compliance requirements before pursuing this route.
  • Recycling for materials — batteries that cannot be cascaded enter hydrometallurgical or pyrometallurgical processes to extract nickel, cobalt, manganese, lithium, and other metals. Such disposal must be performed by enterprises with the corresponding qualifications; anything involving hazardous waste is managed as such.
  • Compliant storage and transfer — before either of the above, storage conditions, packaging, and the transfer manifest must all meet requirements. Batteries not fully discharged pose thermal runaway risks, and most storage accidents originate here.

For generators, the easiest point to overlook is the third: from the moment a battery is removed from equipment until it is handed to a disposal party, responsibility remains with the generator.

Four Types of Generators, Different Starting Points for Obligations

Retired batteries come from different kinds of entities, and compliance obligations trigger differently:

  • Vehicle and battery manufacturers — bear extended producer responsibility and must establish recycling service outlets and disclose recycling outcomes. The statistic of outlets covering 300-plus cities comes mainly from this tier.
  • 4S dealerships and repair shops — replaced battery packs are waste generated in the maintenance stage and must be handed to capable entities; they must not be dismantled in-house or resold to unlicensed buyers.
  • Bus, logistics, and leasing fleet operators — fleets retire in concentration, with large single volumes and concentrated batches, requiring advance arrangements for storage space and clearance scheduling.
  • Energy storage stations and commercial/industrial backup power users — retired battery clusters and modules are often mixed with electrical equipment; discharge and insulation treatment before dismantling is the key risk point.

The shared mistake across all four is "dismantle first, ask later." Once a battery pack is dismantled by untrained personnel, its structural information and safety design are destroyed, and it can only be handled in the most conservative manner afterward, with residual value falling accordingly.

What the 400,000-Ton Figure Does and Does Not Measure

This is the comprehensive utilization volume — neither the generation volume nor the recycling volume. The three measures are not interchangeable:

  • Generation volume — the total amount of batteries actually retired from equipment, determined by installations in earlier years and service cycles.
  • Recycling volume — the portion that actually enters formal channels, tied to outlet coverage, recycling prices, and owner willingness.
  • Comprehensive utilization volume — the amount that has completed cascade use or recycling treatment, the last link in the statistical chain.

Citing the 400,000 tons directly as "market size" overstates the proportion already processed compliantly. When quoting the figure externally, stating the measurement basis matters more than the number itself.

Source

China Environment News: cenews.com.cn.