China to Regulate EV Battery Recycling

Chinese authorities are implementing regulations to formalize electric vehicle battery recycling markets as informal operations have captured roughly 70% of retired battery volumes, creating safety and environmental concerns. New EV battery recycling rules would require end-of-life batteries to remain with vehicles through authorized recycling channels, rather than entering unregulated networks where small operators disassemble and resell components. 

The initiative aims to establish producer responsibility systems while addressing the competition formal recyclers face from lower-cost informal operators. 

China dominates global electric vehicle production and builds over 70% of worldwide EVs. At that scale, projections cited by state news agency Xinhua forecast retired EV batteries to surge from 1.1 million tons in 2025 to 3.9 million tons by 2030. 

Informal recycling networks emerged as volumes increased, with smaller unregulated companies acquiring batteries, dismantling them, and selling materials outside established channels. The trend raised safety, environmental protection, and traceability concerns while making it difficult for licensed recyclers to acquire retired batteries. 

Major battery recycling operations face challenging conditions according to Duo Fu, who leads battery market research at consultancy Rystad Energy. Licensed companies operate under full compliance requirements with higher costs while losing feedstock to smaller recyclers. Only approximately 30% of retired electric vehicle batteries currently enter formal recycling systems. 

Regulations effective April 1 mandate that electric vehicle batteries cannot be separated from vehicles at end of life under interim measures issued in January. Batteries must flow through authorized recycling channels, with more comprehensive regulatory frameworks expected subsequently. 

The Ministry of Industry and Information Technology published approved company lists including CATL subsidiary Brunp, Huayou Cobalt, and BAIC Penglong. Muyi Yang, who analyzes Asian energy markets for think tank Ember, says China is constructing closed-loop systems centered on producer responsibility. 

Mandatory digital identification tracking follows batteries through complete lifecycles. Similar to the European Union’s forthcoming digital battery passport, each unit receives QR codes tracking manufacturers, raw material origins, and ownership histories. Fu notes 2027 will prove significant as both China and the EU implement battery traceability requirements. 

Chinese electric vehicles historically used lithium iron phosphate batteries while European and American vehicles favored nickel manganese cobalt chemistries. Lithium iron phosphate batteries proved less profitable to recycle given their lack of high-value metals. Since 2021, WhaleFall Tech has developed lithium iron phosphate recycling technology originating from the Ningbo Institute under the Chinese Academy of Sciences. 

advises WhaleFall Tech, says the technology transforms lithium iron phosphate battery recycling from marginal operations into key battery material infrastructure. As more jurisdictions enact EV battery recycling regulations, industry players like Massimo Group (NASDAQ: MAMO) may have to tweak their operations to accommodate the changing regulatory environment.

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