But as the batteries in China’s first wave of EVs reach the end of their useful life, early owners are starting to retire their cars, and the country is now under pressure to figure out what to do with those aging components.
The issue is putting strain on China’s still-developing battery recycling industry and has given rise to a gray market that often cuts corners on safety and environmental standards. National regulators and commercial players are also stepping in, building out formal recycling networks and take-back programs, but so far these efforts have struggled to keep pace with the flood of batteries coming off the road.
Like the batteries in our phones and laptops, those in EVs today are mostly lithium-ion packs. Their capacity drops a little every year, making the car slower to charge, shorter in range, and more prone to safety issues. Three professionals who work in EV retail and battery recycling told MIT Technology Review that a battery is often considered to be ready to retire from a car after its capacity has degraded to under 80%. The research institution EVtank estimates that the year’s total volume of retired EV batteries in China will come in at 820,000 tons, with annual totals climbing toward 1 million tons by 2030.
In China, this growing pile of aging batteries is starting to test a recycling ecosystem that is still far from fully built out but is rapidly growing. By the end of November 2025, China had close to 180,000 enterprises involved in battery recycling, and more than 30,000 of them had been registered since January 2025. Over 60% of the firms were founded within the past three years. This does not even include the unregulated gray market of small workshops.
Typically, one of two things happens when an EV’s battery is retired. One is called cascade utilization, in which usable battery packs are tested and repurposed for slower applications like energy storage or low-speed vehicles. The other is full recycling: Cells are dismantled and processed to recover metals such as lithium, nickel, cobalt, and manganese, which are then reused to manufacture new batteries. Both these processes, if done properly, take significant upfront investment that is often not available to small players.