New energy vehicles are selling well. After the batteries are "retired", what should they do?

In the past two years, new energy vehicles have entered a critical phase of growth. With increasing sales and vehicle retention rates, an important question has emerged: What happens to power batteries once they are retired from electric vehicles? Representatives from the participating committees have emphasized the need to clarify responsibilities, establish a comprehensive battery recycling system, and support the development of a sustainable ecological civilization. Status: The first batch of automotive power batteries is now entering their "retirement" phase. The government's work report this year highlighted the importance of new energy vehicles, mentioning initiatives such as promoting integrated circuits, 5G technology, aircraft engines, and new materials, along with extending tax incentives for new energy vehicle purchases for another three years. This reflects the growing strategic importance of the sector. According to statistics, supported by favorable policies, China’s new energy vehicle sales reached 777,000 in 2017, securing the top spot globally for three consecutive years. Over 1.8 million units have been accumulated, accounting for more than half of the global market share. The rapid expansion of the new energy vehicle industry has driven demand for power batteries. While consumers remain focused on range and charging infrastructure, concerns about battery degradation are increasingly being brought to light. Wang Min, chairman of the Sichuan National People's Congress and head of Sichuan Qiyang Automobile Group, noted that the average lifespan of power batteries is between five and eight years. This means that vehicles launched around 2012 began entering their retirement phase in 2018. Experts warn that improper recycling of lithium-ion batteries—commonly used in new energy vehicles—can lead to heavy metal, alkali, and dust pollution. As a result, the Chinese government has taken steps to strengthen recycling efforts. At the end of February, seven ministries, including the Ministry of Industry and Information Technology, jointly issued the "Interim Measures for the Management of Recycling and Utilization of Power Battery for New Energy Vehicles." Some companies have already begun capitalizing on this opportunity. For example, Guoxuan Hi-Tech, a listed battery manufacturer, has established dedicated recycling companies and is building a recycling production line. Exploration into step-by-step utilization and recycling has become a key focus. Unlike regular batteries, power batteries are large and complex, requiring advanced technical solutions for recycling. The Interim Measures emphasize the extended producer responsibility system, placing the main burden of battery recovery on automakers. However, current recycling policies in China are still developing, making it challenging for manufacturers to manage the entire lifecycle of their products. Chen Hong, a National People’s Congress deputy and chairman of Shanghai Automotive Group, called for clearer regulations and stricter oversight. He recommended establishing new energy vehicle recycling qualifications and gradually phasing out non-compliant enterprises. Currently, industry efforts are focused on cascading utilization and recycling. Once a battery’s capacity drops below 80% of its original rating, it is no longer suitable for use in vehicles. However, these retired batteries can still be repurposed for energy storage systems or low-speed electric vehicles. After cascading use, the batteries are sent for recycling. Qualified companies dismantle them according to technical standards, extracting valuable metals like cobalt, nickel, and lithium. Non-reusable materials are then disposed of safely in accordance with environmental regulations. To ensure proper tracking and prevent illegal disposal, the Interim Measures require battery manufacturers to coordinate with automakers, assign unique codes to batteries, and upload data through a traceability information system. Chen Hong also suggested integrating battery code information into the social credit system. This would allow recycling companies to report to authorities and update personal credit records, discouraging unauthorized battery disassembly and resale. Given that China’s battery recycling industry is still in its early stages, representatives proposed allocating a portion of vehicle purchase costs or government subsidies into environmental protection funds. This would support research and development in battery reuse and lifecycle management. Shou Ziqi, an NPC deputy and Secretary of the Shanghai Municipal Environmental Protection Bureau, suggested introducing market-based mechanisms under government guidance. By encouraging closed-loop transactions, the industry could achieve both environmental and economic benefits, ensuring that retired batteries reach certified recycling facilities. As the new energy vehicle market continues to grow, the need for a robust and sustainable battery recycling system becomes ever more urgent. With coordinated efforts from policymakers, manufacturers, and recyclers, the industry can move toward a greener and more efficient future.

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