The automated equipment in the power battery recycling demonstration line at Jinci Energy Materials Co., Ltd. (referred to as "Jinci Energy") operates in an orderly manner. As a flagship project under China Minmetals New Energy Materials (Hunan) Co., Ltd. (referred to as "Minmetals New Energy"), Jinci Energy's power battery recycling demonstration line is using intelligent operations to achieve the recycling and reuse of spent power batteries, serving as a vivid microcosm of the industry's green and low-carbon development.

Currently, China's new energy vehicle industry has entered a new phase of high-quality development focused on improving quality and efficiency. Against this backdrop, the recycling and comprehensive utilization of spent power batteries has become a crucial link in establishing a green, circular system for the entire lifecycle of new energy vehicles. With continuous policy improvements and iterative advancements in process technology, the domestic spent power battery recycling industry is undergoing profound transformation.

Policies Safeguard Healthy Industry Development

According to data from the China Association of Automobile Manufacturers, in 2025, China's production and sales of new energy vehicles were 16.626 million and 16.49 million units respectively, representing year-on-year growth of 29% and 28.2%. New energy vehicle sales accounted for 47.9% of total new vehicle sales. Research institutions estimate that China is about to enter a stage of large-scale power battery retirement, with the annual volume of spent power batteries expected to exceed 1 million tons by 2030.

Accelerating the improvement of the spent power battery recycling and utilization system is urgent and highly significant. In recent years, policy signals have been intensively released, supporting the healthy development of the power battery recycling industry.

Recently, the State Council issued the "15th Five-Year Plan for Carbon Peaking Action," which mentions strengthening the standardized recycling and refined utilization of renewable resources such as waste electrical and electronic products, spent power batteries, decommissioned wind and photovoltaic equipment, end-of-life vehicles, and scrapped agricultural machinery.

Prior to this, the "15th Five-Year Plan for Circular Economy Development" issued by the National Development and Reform Commission proposed vigorously promoting green construction throughout the entire engineering process, fully unleashing the potential of traditional "urban mining" resources, and accelerating the improvement of recycling capabilities for solid waste, including the "new three" items.

The "Interim Measures for the Administration of Recycling and Comprehensive Utilization of Spent Power Batteries from New Energy Vehicles" (referred to as the "new regulations"), which officially took effect on April 1 this year, has also become a key factor in reshaping the competitive landscape of the power battery recycling industry.

The Secretary-General of the Waste Battery Recycling Branch of the China National Resources Recycling Association stated that the new regulations define a compliance baseline, which will drive the industry's upgrade from extensive, unregulated growth to comprehensive, specialized standardization and normalization.

It is understood that before the implementation of the new regulations, due to the low entry barriers in the power battery recycling sector, the industry boom attracted a massive influx of capital, leading to a state of disorderly expansion. The core drawback of this unregulated growth was a severe imbalance between supply and demand, resulting in price chaos. A large number of market participants blindly hoarded goods, leading to intense internal competition.

The new regulations provide a precise solution, formally establishing two rigid systems: integrated vehicle-battery scrapping and full-lifecycle traceability management. These institutional measures accelerate the elimination of non-compliant production capacity. In the past, many companies could easily purchase retired batteries from unlicensed "small workshops." Now, the acquisition and circulation of "black market batteries" outside the traceability system are strictly prohibited, and various non-compliant market entities will face severe penalties.

Companies Hone Their Technical Capabilities

To seize the critical window of opportunity in the development of the power battery recycling industry, various parties in the industrial chain are actively advancing their business layouts.

Leading companies, leveraging their advantages in technology, channels, and qualifications, are continuously expanding their recycling networks. For example, GEM Co., Ltd. stated during investor relations activities that the company has established six power lithium battery recycling plants in the Pearl River Delta, Yangtze River Delta, Beijing-Tianjin-Hebei region, and Central China, forming a nationwide compliant recycling network. These bases are located close to battery cell manufacturers and automotive companies, enabling efficient fulfillment of the recycling responsibilities that producers must undertake under the new regulations and precisely meeting compliant recycling demand.

The wholly-owned subsidiary of Wondersun Environmental Technology Co., Ltd., Nanjing Wondersun Green Materials Technology Co., Ltd., entered the power battery recycling and end-of-life vehicle dismantling sector in March this year through the acquisition of Anhui Jiaqi Energy Technology Co., Ltd. and Wuhu Minghao New Materials Co., Ltd.

A relevant person in charge at Jinci Energy stated that the company built a power battery recycling demonstration line with an annual processing capacity of 5,000 tons as early as 2019. With mature processes and a comprehensive control system, it was successfully included in the Ministry of Industry and Information Technology's "white list" in 2021. At this stage, this demonstration line does not prioritize profitability; the company focuses on deepening technological iteration, talent pipeline development, and production process optimization to prepare for subsequent large-scale mass production and to handle the upcoming wave of power battery retirements.

Overall, the long-term development prospects for the power battery recycling and reuse industry are clear, but it still faces numerous challenges at the current stage.

"Easy to expand production, difficult to profit" has become a common dilemma for companies in the industry. Industry insiders note that the economic viability of lithium iron phosphate (LFP) battery recycling is relatively weak, especially when lithium prices are low, leading to thin profit margins and insufficient willingness to recycle among some companies. Furthermore, the current market for power battery recycling is primarily based on competitive bidding, often described as "the highest bidder wins." Compliant companies strictly adhere to various environmental, safety, and other compliance standards, resulting in persistently high costs for equipment operation and maintenance, environmental management, and safety control.

Faced with the industry's growing pains, in addition to continuous policy and regulatory efforts to optimize the market ecosystem, major companies are also actively seeking change and exploring ways to break through the challenges.

A relevant staff member at Ganfeng Lithium Group Co., Ltd. (referred to as "Ganfeng Lithium") stated that on one hand, the company deeply partners with leading enterprises to secure high-quality sources such as warranty replacement batteries or production scrap. On the other hand, it locks in long-term agreement prices for lithium iron phosphate materials to mitigate the impact of "price wars." Simultaneously, Ganfeng Lithium is also working to reduce per-ton costs through process optimization, automation, and economies of scale.

The relevant person in charge at Jinci Energy introduced that after multiple rounds of technological iteration, the company has maturely mastered the live crushing process for power batteries, effectively reducing copper and aluminum impurities in the black mass (the black mixed powder obtained after battery disassembly and crushing), thereby making full preparation for the subsequent hydrometallurgical process.

The accelerated implementation of artificial intelligence technology also brings new ideas for cost reduction and efficiency improvement in the industry. An expert committee member of the Energy Storage Application Branch of the China Industrial Association of Power Sources stated that in the past, determining whether a retired power battery was usable required complete disassembly and charge-discharge testing of the cells, which was extremely costly. Now, companies are beginning to utilize historical operational data from cloud-based BMS (Battery Management Systems), combined with AI algorithms or rapid electrochemical impedance spectroscopy (EIS) technology, to assess the state of health (SOH) of batteries without disassembly, significantly reducing testing costs.

Supported by multiple favorable factors such as policy foundations, regulatory efforts, and technological iteration, the domestic power battery recycling industry is steadily advancing towards a stage of standardized development. In the future, as the technological system continues to improve and supply-demand relationships gradually rebalance, the power battery recycling industry will continue to unleash its green economic value, providing solid support for the upgrade of China's new energy industry and the achievement of the "dual carbon" goals.