Regulatory Overhaul for Safer Battery Recycling

China's Ministry of Industry and Information Technology (MIIT) has issued a new announcement to abolish and revise policies and standards related to "cascade utilization" of retired electric vehicle (EV) batteries. The move aims to eliminate the market's habitual reliance on this concept, prevent companies from misrepresenting refurbished batteries as new ones, and ultimately standardize market order and public safety. The key measures include removing the term from the 2024 industry specification and banning the use of retired batteries in high-risk products like e-bikes.

Why the "Cascade Utilization" Concept is Being Abolished

The 2024 version of the Industry Standard Conditions for the Comprehensive Utilization of Retired Power Batteries from New Energy Vehicles broadly defined "comprehensive utilization" to include both cascade utilization and recycling. However, a new regulation effective December 31, 2025, has redefined "comprehensive utilization" strictly as the resource recovery process involving dismantling, crushing, sorting, and smelting. This definition now excludes "cascade utilization." To align with this new regulation, MIIT's announcement formally withdraws the cascade utilization clauses from the 2024 standard and removes all previously listed qualified cascade utilization companies from the official roster. This ensures consistency across the regulatory framework. The list of qualified recycling companies remains unchanged.

New Core Principle for Battery Products

The announcement no longer treats "cascade utilization" as a special product category. Instead, all battery products made from retired EV batteries will be subject to the same regulatory framework as new batteries. Previously, the "cascade utilization" label allowed some companies to market substandard, simple-refurbished batteries, often used in high-risk applications like e-bikes. The new policy establishes a core principle: a retired battery can only re-enter the market if it fully meets the quality and safety standards of its intended application. This requires producers to ensure their products have no unreasonable safety risks and meet national standards. Products must have quality inspection certificates, clear manufacturer details, and proper safety warnings. Furthermore, under the Circular Economy Promotion Law, products must be clearly labeled as "reused products" to ensure consumer transparency and prevent fraud. A critical red line remains: these products are strictly prohibited from use in e-bikes, electric balance bikes, electric scooters, energy storage systems over 100kWh, power banks, and toys.

Comprehensive Clean-Up of Industry Standards

The announcement initiates a systematic purge of the "cascade utilization" concept across national, local, and industry standards. National and industry standards bodies must urgently abolish or revise any documents containing the term, and new projects will be prohibited from using it. Local governments must revise or abolish supportive policies and local standards that encourage cascade utilization to eliminate confusion. Industry associations must rename any committees related to cascade utilization and stop all promotional activities around the concept. This effectively cuts off the market's propagation channels and outdated mindset.

Impact on the Industry: Quality Over Price

The abolition of "cascade utilization" as a distinct concept is seen as a profound restructuring of the battery recycling industry. First, it removes a loophole that allowed low-quality products to use the label as a shield. Products made from retired batteries must now meet the same quality and safety standards as new ones, ending the "race to the bottom." Second, it dismantles the business model of small workshops that simply dismantle and repackage batteries, as they cannot meet the new quality assurance requirements. The industry will shift from price competition to quality competition, concentrating resources in technology-leading firms. Finally, it promotes a safer, more efficient, and legally compliant recycling ecosystem.

Legal Operations Remain Unaffected

The industry standard conditions are guidance documents, not mandatory pre-requisites for business licenses. Therefore, the removal of 100 companies from the cascade utilization list does not affect their legal and compliant production activities. As long as companies fully comply with the Product Quality Law, the Circular Economy Promotion Law, and other mandatory standards, they can continue to produce qualified products from retired batteries and compete equally in the market.