On the evening of July 30, China's Ministry of Industry and Information Technology (MIIT) issued an announcement to abolish and revise policies and standards related to the 'cascade use' of retired electric vehicle (EV) power batteries, while comprehensively regulating related industry activities.

The move aims to eliminate the inertial market influence of the 'cascade use' concept and prevent companies from profiting by simply disassembling and repackaging retired batteries to pass off inferior or old products as new ones. The goal is to regulate market order and maintain public safety, according to MIIT.

Understanding 'Cascade Use' Batteries

'Cascade use' batteries are products made by processing retired power batteries through steps like testing, sorting, disassembly, and reassembly. These are then used in applications such as backup power for communication base stations. However, as the EV industry grows, the volume of retired batteries is rising, entering a phase of large-scale decommissioning. These retired batteries often suffer from poor consistency and varying residual capacity. If only simply disassembled and reassembled without strict quality control, the resulting products can easily cause thermal runaway due to overcharging, short circuits, or compression, posing serious safety risks.

In early January, journalists found that many merchants were privately dismantling retired vehicle batteries and illegally processing and selling them under the guise of 'cascade use'. This led to a joint law enforcement action in April by five ministries, including MIIT, to regulate the recycling of retired batteries and crack down on illegal activities.

Core Principle of the New Rules

MIIT's latest announcement explicitly abolishes clauses related to 'cascade use' and prohibits its improper application to rectify industry chaos. An official from MIIT's Department of Energy Conservation and Comprehensive Utilization noted that the 'cascade use' label was previously misunderstood by the market, as if products were allowed to have lower performance and safety standards because they were 'second-hand'. Some companies exploited this to sell poorly tested, refurbished batteries as 'cascade' products, even for high-risk uses like electric bicycles, leading to quality issues and safety hazards.

The announcement establishes a core principle: The key to determining whether a retired power battery can re-enter the market is whether it fully meets the quality standards and safety requirements of its intended application. To address these issues, MIIT previously issued policies on product design, testing, performance, labeling, and certification for 'cascade use' activities.

On December 31, 2025, MIIT and other departments jointly issued a management measure that redefined the comprehensive utilization of retired EV batteries as activities like disassembly, crushing, sorting, and smelting for resource recovery, excluding the 'cascade use' concept. However, since that measure took effect, some illegal enterprises have continued 'cascade use' activities in rural-urban fringes, using the resulting products in prohibited areas like electric bicycles, disrupting market order. Additionally, some existing policy documents still contain 'cascade use' terms inconsistent with the new measure, causing public confusion.

100 Companies Removed

To resolve these issues, the latest announcement abolishes 'cascade use' clauses from the 2024 industry standard, halts the management of 'cascade use' enterprise announcements, and removes previously announced 'cascade use' companies from the list of compliant enterprises. This affects 100 companies, including Shanghai BYD Co., Ltd., Tianjin Gree Gotion New Energy Co., Ltd., Hefei Gotion High-Tech Power Energy Co., Ltd., Hunan Brunp Automotive Recycling Co., Ltd., and Duofluoride New Energy Technology Co., Ltd..

An MIIT official emphasized that removing these companies from the list does not affect their legal and compliant production activities. As long as they comply with all laws and mandatory standards, these companies can continue to produce qualified products from retired batteries and compete in the market. The announcement now treats all battery products made from retired batteries under the general 'battery production' regulatory framework, rather than as a special 'cascade use' category.

Safety Red Line and Future Reforms

The announcement also reaffirms an unbreakable safety red line: It explicitly prohibits the use of such products in areas banned by laws and regulations, including electric bicycles, electric balance bikes, electric scooters, energy storage systems above 100 kWh, power banks, and toys. Furthermore, it requires relevant authorities to accelerate the abolition or revision of policies and standards related to 'cascade use', strengthen joint supervision, and enforce penalties for producing substandard battery products from retired batteries.

MIIT emphasized that this announcement is not just a cleanup of policy terminology but a profound reshaping of the underlying logic of China's power battery recycling industry, with systemic and structural impacts.