Retired Power Batteries Surge: Compliance and Second-Life Use Reshape the Industry Ecosystem

After years of development in the new energy vehicle industry, early-market electric vehicles are gradually entering the battery retirement cycle, marking the arrival of a large-scale power battery retirement wave. Battery recycling is no longer a supporting link in the industrial chain, but a core sector related to safety, environmental protection, and resource circularity. At present, compliant operation has become the foundation of the industry, while cascade utilization is unlocking the value of retired assets. These two directions have become the main focus of the sector, driving the power battery recycling industry toward a more standardized and sustainable stage of development.

1. Battery Retirement Wave Fully Emerges: Power Battery Recycling Faces Dual Challenges

The large-scale retirement of power batteries has become a clear industry trend. The massive stock entering retirement not only creates significant growth opportunities for the recycling sector, but also exposes potential risks.

• From a market perspective, the first batch of new energy vehicles launched between 2018 and 2020 is now reaching a 5–8 year usage cycle. In 2026, China’s retired power battery volume is expected to increase sharply, forming a trillion-level blue ocean market that is attracting widespread participation from companies and capital, with strong growth potential continuously being released.

• From an industry standpoint, inefficient operating models are no longer suitable for the current large-scale retirement environment. How to manage the retirement surge and mitigate existing risks has become a key challenge that the entire industry must address.

• From a safety and environmental perspective, retired batteries contain electrolytes, heavy metals, and other hazardous substances, posing potential risks to the ecological environment.

2. Regulatory System Continues to Improve: Compliance Becomes the Foundation for Long-Term Industry Development

With continuously strengthening policies and increasingly strict supervision, the power battery recycling industry is being pushed out of its previous disorderly growth stage, making compliant operation the minimum requirement for all participants.

At present, relevant regulatory measures have been fully implemented. The “one battery, one code” traceability system is being widely adopted, creating a digital record for each battery. This enables full lifecycle tracking—from installation and usage to maintenance and eventual retirement and recycling—thereby preventing the illegal circulation of scrapped batteries and refurbished substandard products at the source.

At the same time, policies have clearly defined the responsibilities of multiple stakeholders, including automakers, maintenance enterprises, and recycling organizations, significantly raising industry entry barriers. Small workshops with outdated equipment, incomplete qualifications, or failing environmental standards are being rapidly phased out.

For companies with proper qualifications, advanced equipment, and standardized processes, this wave of compliance not only helps avoid operational risks but also improves overall market conditions. It enables law-abiding and well-regulated enterprises to fully leverage their strengths and achieve steady, sustainable growth.

3. Second-Life Utilization Takes Shape: Unlocking the Circular Economy Value of Retired Batteries

The deep development of second-life battery applications and the expansion of diversified use cases are key to transforming retired batteries into valuable resources and building a green circular industry. With mature technologies such as precise testing, cell capacity grading, and balance restoration, retired batteries with different health conditions can be matched to suitable application scenarios, maximizing their remaining value.

Batteries in relatively good condition can be professionally refurbished and deployed in energy storage stations, communication base stations, and low-speed vehicles. This extends their service life while reducing operational costs for downstream industries. Batteries with severe degradation, on the other hand, are directed to material recycling processes, where key metals such as lithium, cobalt, and nickel are efficiently recovered. This helps reduce reliance on imported mineral resources and supports the achievement of carbon peak and carbon neutrality goals.

Meanwhile, second-life utilization is also driving the emergence of new business models, including battery health assessment, intelligent cloud warehousing, online auctions, and residual value guarantees. These developments are transforming a single recycling activity into full life-cycle value management, continuously enriching the business ecosystem of the industry chain.

The wave of power battery retirement is both a challenge and an opportunity for industrial transformation and upgrading. Compliance establishes the safety and environmental baseline, while second-life utilization unlocks resource and commercial value. Together, these two approaches complement each other and outline the main development path of the power battery recycling industry. Looking ahead, with continuous technological iteration and increasingly refined regulation, the circular power battery industry chain will become more mature. By maintaining compliance standards, advancing technological innovation, and activating idle resources, the industry can achieve stable and sustainable growth amid the wave of change, truly enabling the long-term green, healthy, and sustainable development of the new energy sector.