The Ministry of Industry and Information Technology released a public announcement on July 30 regarding the repeal and revision of policies and standards related to the "cascade utilization" of retired new energy vehicle power batteries, along with measures to regulate related industry activities.

This announcement aims to eliminate the lingering influence of the "cascade utilization" concept in the market, prevent certain companies from simply disassembling and repackaging retired power batteries to pass off inferior or used products as new, and effectively standardize market order while safeguarding public safety.

China's retired power battery recycling management system is entering a new phase of standardized, clear-cut regulation, as evidenced by exhibitors studying battery structures at a recent supply chain expo.

The policy removes the "cascade utilization" designation

This policy adjustment is not sudden but rather a natural progression of continuously escalating industry oversight. The "cascade utilization" concept was first introduced in 2012 within the State Council's "Energy-Saving and New Energy Vehicle Industry Development Plan (2012–2020)" to maximize the residual value of retired power batteries and avoid resource waste from direct dismantling.

Over the following decade, supporting policies were consistently strengthened. In 2021, the Ministry of Industry and Information Technology, along with other departments, jointly issued the "Management Measures for Cascade Utilization of New Energy Vehicle Power Batteries," clarifying requirements for the production, use, and recycling of cascade products and improving the management mechanism.

With the explosive growth of the domestic new energy vehicle industry, the retirement wave of power batteries is accelerating. Data from the Ministry of Industry and Information Technology shows that China is about to enter a phase of large-scale retirement for power batteries, with approximately 400,000 tons of retired power batteries generated in 2025, and the annual figure is expected to exceed 1 million tons by 2030.

Behind this rapidly expanding retired battery market, safety hazards and industry chaos are becoming evident. A relevant official from the Ministry's Department of Energy Conservation and Comprehensive Utilization stated that the "cascade utilization" label was previously misunderstood by the market, with some believing that such "second-hand" products could compromise on performance and safety. Some companies exploited this by selling simply refurbished batteries under the "cascade" name, even illegally using them in high-risk areas like electric bicycles, causing serious quality and safety issues.

This announcement no longer treats "cascade utilization" as a special, differentiated product category but instead unifies all battery products made from retired power batteries under the general regulatory framework for "battery production."

In January 2026, the "Interim Measures for the Management of Recycling and Comprehensive Utilization of Retired Power Batteries from New Energy Vehicles," jointly released by six departments including the Ministry of Industry and Information Technology, will no longer use the "cascade utilization" concept. Instead, it will clearly state that no organization or individual may use retired power batteries, directly or after processing, for electric bicycles or other areas prohibited by laws, regulations, or mandatory standards.

The release of this announcement fully implements the requirements of that departmental regulation, eliminating all gray areas at the policy and standard level and ending long-standing public misunderstandings.

The industry shifts toward compliant, new-track recycling

After the policy takes effect, the power battery recycling industry will undergo a thorough structural shake-up. The Ministry official noted that "cascade utilization" previously served as a shield for low-quality products. Now, with the concept completely removed, products made from retired power batteries must meet the same quality and safety standards as new products, bearing equal producer responsibility.

This means compliant companies facing higher regulatory costs will no longer be at a disadvantage, helping to reverse the "bad money drives out good" phenomenon. Gao Chengyuan, Deputy Secretary-General of the Guangdong Social Policy Research Association, told China Business News that while some existing business layouts may require short-term adjustments, the policy will drive resources toward compliant recycling fields, shifting the industry from concept-driven to technology-driven growth, benefiting high-quality development overall.

Yuan Shuai, Deputy Secretary-General of the Zhongguancun Internet of Things Industry Alliance, said that for companies in the industry, the path forward is clear: first, abandon the mindset of profiting from information asymmetry and rule-bending, embedding quality and safety as red lines in all operations. On the technology front, companies must invest more in core R&D, eliminating rough manual assessment and dismantling methods. More accurate battery health detection, efficient reassembly and adaptation, and safer packaging processes will become core competitive advantages.

Gao Chengyuan emphasized that compliance is the core prerequisite for market success. Companies should strictly follow policy requirements to build a full life-cycle traceability system, connect with the national power battery traceability management platform, and ensure that battery sources, flows, and disposal are fully traceable, closing off non-compliant circulation channels. Additionally, businesses must stay updated on relevant national standard revisions, iterating internal quality control systems in a timely manner to align with the latest regulatory requirements and avoid compliance lag risks. Finally, companies should collaborate with automakers, battery manufacturers, and formal dismantling firms to establish stable closed-loop partnerships, build a standardized recycling network, ensure compliant raw material supply, and strengthen the safety foundation of the entire chain.