China figured out how to sell EVs. Now it has to deal with their aging batteries.

· Source: MIT Technology Review Narrated · Field: Technology & Digital — Electric & Alternative Fuel Vehicles, Emerging Technologies & Innovation, Public Policy & Governance · Depth: Intermediate, medium

Summary

China is facing a significant challenge with hundreds of thousands of aging electric vehicle (EV) batteries entering the market, creating a burgeoning gray recycling economy. By late 2025, nearly 60% of new cars sold in China were electric or plug-in hybrids, leading to an estimated 820,000 tons of retired EV batteries this year, projected to reach 1 million tons by 2030. These lithium-ion batteries degrade to under 80% capacity, reducing range and increasing safety risks. While China has seen rapid growth in its formal recycling ecosystem, with 180,000 enterprises involved by November 2025, these efforts struggle to keep pace. Unregulated workshops often cut corners on safety and environmental standards, dumping toxic wastewater. Major manufacturers like BYD, Geely, and CATL are implementing take-back schemes and advanced recycling systems, with CATL's subsidiary Runpee boasting over 240 collection depots and high metal recovery rates. However, the bankruptcy of over 400 smaller EV brands complicates comprehensive system development.

Key takeaway

For investors evaluating the long-term sustainability of the EV market, understanding battery end-of-life solutions is critical. Your investment thesis should account for the significant infrastructure and regulatory challenges associated with battery recycling, particularly in markets like China. Consider companies with established, closed-loop recycling systems or those actively investing in such capabilities, as these will likely mitigate future environmental liabilities and secure critical material supply chains. Prioritize firms demonstrating clear strategies for managing battery waste at scale.

Key insights

China's EV boom has created a massive battery waste challenge, fueling an unregulated recycling market.

Principles

Method

Retired EV batteries undergo either cascade utilization for secondary applications or full recycling to recover valuable metals like lithium, nickel, cobalt, and manganese for new battery manufacturing.

In practice

Topics

Best for: Investor, Entrepreneur, Business Analyst, Policy Maker, Executive

Related on AIssential

Open in AIssential →

Editorial summary, takeaway, and curation by AIssential. Original article published by MIT Technology Review Narrated.