China's First Big Wave of Retired EV Batteries Is Here, and Recyclers Can't Keep Up

China spent a decade building the world's largest electric vehicle market. Now it's dealing with the messy part: the batteries are starting to come back.

Annual sales of battery-powered vehicles in China, including fully electric cars and plug-in hybrids, jumped from about 1 million in 2018 to more than 16 million in 2025. EV batteries typically last around eight years before they lose enough capacity to be retired from road use. That math means the country is entering its first major wave of battery retirements — and the numbers are big enough to worry waste managers, regulators, and the environment.

China reported 400,000 metric tons of EV battery waste last year. A joint study by researchers in China and the United States projects that figure will grow to 1.69 million metric tons in 2030 and 22.39 million metric tons by 2040. For context, that's roughly a 55-fold jump from today's level in fifteen years.

A Recycling System With Plenty of Capacity and Not Enough Throughput

China started building its formal EV battery recycling system back in 2018. More than 150 companies have since been placed on the government's certification "white list," which authorizes them to process retired vehicle batteries.

By 2023, certified companies had a combined annual processing capacity of 623,000 metric tons — more than 1.5 times the volume of batteries retired that year. But here's the gap: they actually handled only about 25 percent of those batteries. The rest flowed somewhere else.

An investigation published earlier this year by Yicai, a Chinese financial news outlet, showed just how hollow some of that official capacity really is. Its reporters tried to contact every company on the white list and found that more than 100 were no longer operating or couldn't be reached at all.

The researchers behind a paper titled "The Urgency to Regulate Informal EV Battery Recycling in China" described the country's effort to control the informal market as a "losing battle."

What Happens When Batteries Go to the Wrong Place

The consequences of improper disposal aren't abstract. In a case announced in Jiangxi Province in 2024, an uncertified company was found to have improperly dismantled 364 metric tons of waste lithium iron phosphate batteries. The contamination that followed killed vegetation across 6 acres of forest and destroyed more than 420 cubic feet of standing timber.

"There is poisoning, explosion, and fire caused by improper battery dismantling, waste water being dumped into rivers, contaminants being seeped into groundwater and polluting the soil," Laixiang Sun, a professor at the University of Maryland and coauthor of the study, told Inside Climate News.

"There is the lithium, copper, and nickel in the batteries," said Yan Wang, a professor of mechanical engineering at Worcester Polytechnic Institute. "You cannot dump them into the environment."

Sun's research estimated that uncertified recyclers handled nearly 270,000 metric tons of retired batteries in 2023. Without intervention, the study projects the volume flowing through informal channels could reach 1.26 million tons in 2030 and 16.79 million tons by 2040.

The economics explain why. A sprawling network of informal operators can pay more for used batteries because they skip the costs of safe testing, dismantling, and pollution control. Selling to them is often easier for vehicle owners, too.

Retired batteries still hold real value, so few end up in landfills. In principle, packs in decent shape can be repurposed for less demanding jobs like stationary storage, while worn-out cells can be recycled into raw materials for new batteries. Repurposing, though, requires testing and grading batteries, modules, and sometimes individual cells — a technically complex and expensive process. A Tesla Model Y battery pack, for example, can contain more than 4,000 individual cells.

Unlicensed operators skip most of that testing and tear packs apart at far lower cost. Some then sell used cells for unapproved uses, including aftermarket range-extending battery packs. Because those cells may not have been properly tested, the modifications can create real fire and safety risks.

The danger became public in November, when a Xiaomi SU7 electric sedan caught fire in Changzhou, Jiangsu Province. The owner later told the Sanxiang Metropolis Daily that the battery involved was an aftermarket range extender, not the vehicle's original factory-installed battery.

The Brighter Path: Black Mass and the Materials Inside

Recycling batteries back into raw materials looks like the more commercially promising route. Processors turn retired packs into "black mass," a powder containing lithium, cobalt, nickel, manganese, graphite, and other materials. Those can then be separated, refined, and reused in new batteries. Some advanced processes recover more than 95 percent of certain critical battery materials.

Unlicensed recyclers, lacking the technology and infrastructure, rarely hit those recovery rates. Their lower costs come at the expense of the environment and of workers who risk exposure to toxic materials.

"It is about health, about human rights, about pollution in the air, water and soil," Sun said. "It is an enormous problem."

New Rules Take Effect, Modeled on Europe's Battery Passport

Beijing isn't standing still. A new national regulation governing EV battery recycling took effect on April 1. China is adopting an approach similar to Europe's "battery passport" system, requiring automakers to bear more responsibility for collecting and recycling used batteries. Batteries removed from retired vehicles must now be directed through approved channels and processed by certified companies.

The regulation matters because responsibility has been diffuse. Sun argues the government's efforts alone won't solve the problem.

"Automakers have to take responsibility, even if it pushes up costs," he said.

"Car owners must be aware of their responsibility too. They have to be willing to sacrifice a small amount of money rather than sell batteries to the informal recyclers."

The study concludes that with the right mix — automaker responsibility, stricter controls on informal recyclers, and incentives for consumers and certified recyclers — certified companies could handle 60 percent of retired EV batteries by 2030 and 92 percent by 2060.

A Global Problem, Not Just a Chinese One

China isn't alone in struggling to make recycling pay. The economics of battery recycling have proven difficult everywhere.

Ascend Elements, one of the largest battery recyclers in the United States, invested heavily in facilities in Georgia and Kentucky and raised more than $1 billion after 2021. But high construction costs, weaker EV demand in the US, and uncertainty around federal support made the expansion hard to sustain. The company filed for Chapter 11 bankruptcy protection in April.

"We are the first of its kind," Yan Wang said, noting he wasn't involved in the company's daily operations. "Being first means you always make mistakes."

Two other major North American recyclers, Li-Cycle and Lithion Technologies, entered insolvency proceedings in 2025. Glencore, the Swiss commodity trading and mining giant, has taken over Li-Cycle.

Yan Wang and Sun agree on one point: China has enough certified capacity to manage the coming wave of retired EV batteries. The country has also emerged as the global leader in EV battery recycling, thanks to a vast and rapidly growing supply of used packs.

The open question is whether Beijing can keep retired batteries out of the informal market. If it can't, China risks repeating a familiar pattern — rapid industrial growth followed by a fresh wave of pollution. The country's next decade will show whether its recycling rules can bend that curve.

Battery recycling coverage continues on our Battery Tech page, alongside our EV and semiconductors sections.

Sources: Inside Climate News, WIRED, NDRC regulation notice