China’s EV Battery Recycling Industry Faces New Rules and Supply Challenges

eptember 30, 2026 | Industry News

China’s EV battery recycling industry is facing underused processing capacity, difficult feedstock procurement and volatile project economics, according to a September 29 investigation by National Business Daily. nbd.com.cn

The report follows the September 28 release of China’s New Battery Industry Development Plan for 2026–2030. Issued by seven government departments, the plan includes strengthening recycling systems, improving product traceability and developing lifecycle carbon-footprint management. 工业和信息化部

A Change in Second-Life Battery Regulation

On July 30, the Ministry of Industry and Information Technology (MIIT) abolished second-life-use provisions in its battery recycling industry guidelines and ended the separate listing system for second-life battery enterprises. Existing listings for materials-recycling businesses remain valid. 工业和信息化部

Importantly, this should not be described as a blanket ban on every form of battery reuse. MIIT’s explanation states that compliant production activities may continue. Products made from retired EV batteries must meet the quality and safety requirements of their intended applications, while use in electric bicycles and other prohibited applications remains banned. 北京市经济和信息化局

Installed Capacity Does Not Guarantee Supply

National Business Daily reported that GEM processed approximately 52,600 tonnes of retired EV batteries in 2025 and expected around 80,000 tonnes in 2026, against maximum processing capacity of approximately 200,000 tonnes. The 2026 figure is a company expectation, not a completed annual result. 每日经济新闻

Recyclers interviewed by the newspaper described difficulties obtaining batteries through trading intermediaries, including sellers holding inventory purchased at higher prices. Lithium-price swings have also disrupted investment assumptions, prompting some businesses to pause or withdraw from recycling projects. 每日经济新闻

Implications for Battery Supply Chains

The investigation also highlights cooperation between recyclers and battery manufacturers, with recovered materials returning to battery-material production. Such arrangements aim to connect waste collection, processing and manufacturing, rather than relying entirely on spot-market transactions. 每日经济新闻

At the policy level, the new development plan separately identifies lifecycle traceability, testing and certification, and carbon-footprint management as priorities. These are relevant considerations for companies assessing the documentation behind battery products and their supply chains. 工业和信息化部

For battery buyers, a practical takeaway is to assess more than purchase price: verify cell provenance, application-specific compliance, test evidence and warranty responsibility. Recovered raw materials used to manufacture new cells should also be distinguished from previously used cells assembled into another battery pack. These are different sourcing questions, not interchangeable product descriptions. 北京市经济和信息化局

Wiren will continue to follow developments in battery recycling, product standards and supply-chain traceability, with a focus on their implications for energy storage and motive-power applications.