The Ministry of Industry and Information Technology (MIIT) has announced the immediate termination of the "cascade use" policy for retired electric vehicle (EV) batteries, effectively ending a 14-year regulatory era. The move removes 100 previously approved companies from the official compliance list, including major players such as Shanghai BYD Co, Huayou Resources, SVOLT Energy Technology, and Gotion High-tech.

An official announcement on July 30 detailed four sweeping changes. First, the MIIT has abolished all clauses related to "cascade use" from the 2024 edition of the industry standard conditions for comprehensive utilization of retired EV batteries. Second, it has ended the administrative management of "cascade use" enterprises, revoking the official qualification status of 100 companies that had previously been recognized. The existing list of "recycling" enterprises remains valid, however. Third, the regulation strictly prohibits any organization or individual from repurposing retired EV batteries—whether intact, disassembled, or reassembled—for use in electric bicycles or other banned applications. Any battery product made from retired batteries must now meet the same quality standards as new ones. Fourth, the MIIT is ordering a full cleanup of related standards and activities, requiring standardization bodies to abolish or revise national and industry standards that mention "cascade use," while social groups must stop related promotion, training, and exchanges.

The concept of "cascade use" was first introduced into top-level policy in 2012, aimed at resource conservation by reusing retired EV batteries—which often retain significant capacity—in less demanding applications like backup power for communication base stations. Over the years, policies were repeatedly strengthened, including the establishment of a dedicated management system in 2019 and a specific management method in 2021. However, the practice has deviated significantly from its original intention.

The abrupt policy reversal is driven by serious safety risks and market disorder. The MIIT’s Department of Energy Conservation and Comprehensive Utilization explained in a concurrent statement that retired EV batteries generally suffer from poor consistency and varying residual capacity. When simply disassembled and reassembled without strict quality control, these batteries are prone to thermal runaway due to overcharging, short circuits, or extrusion, posing significant fire and explosion hazards. In practice, some enterprises exploited the "cascade use" label to market substandard batteries, confusing consumers and threatening public safety.

To address this, the MIIT and other agencies earlier in 2025 jointly issued a new interim regulation that redefined the comprehensive utilization of retired EV batteries strictly as recycling—involving dismantling, crushing, sorting, and smelting for resource recovery—and explicitly excluded the concept of "cascade use." However, even after that regulation took effect, illegal operators continued to carry out "cascade use" activities in remote urban-rural fringe areas and villages, funneling unsafe batteries into high-risk applications like electric bicycles. This, coupled with lingering references to "cascade use" in other policy documents and standards, created confusion and undermined enforcement.

A MIIT official stated that removing the 100 companies from the compliance list does not affect their legal and compliant production activities. As long as they fully adhere to all laws and mandatory standards, these companies can continue to manufacture qualified products from retired batteries and compete in the market on an equal footing. The official emphasized that the policy shift will guide the industry away from "price competition" toward "quality competition," and resources will accelerate toward technologically capable leading firms.

"In the past, the 'cascade use' label was vaguely understood by the market, implying that because these products were 'second-hand,' they could compromise on performance and safety. Some enterprises took advantage of this to sell poorly tested, simply refurbished batteries under the 'cascade use' banner, even illegally using them in high-risk areas like electric bicycles. This led to serious quality chaos and safety hazards. Now, with the concept completely removed, products made from retired batteries must meet the same quality and safety standards as new products, and bear the same producer responsibility. This levels the playing field for legitimate companies that incur higher compliance costs," the official said.

The move comes as China faces a looming wave of retired EV batteries. Industry forecasts predict the annual retirement volume will exceed one million tons by 2030. The surge poses a severe challenge to recycling oversight, as batteries that fall into informal channels could cause pollution, safety incidents, and the loss of strategic metals like lithium, cobalt, and nickel. This year, policy implementation has accelerated. In April, five government departments launched a joint law enforcement campaign targeting illegal sales, failure to fulfill traceability responsibilities, and environmental pollution from unauthorized dismantling. In May, the MIIT convened a national working group to establish a long-term mechanism for managing the large-scale retirement of EV batteries. The latest announcement is expected to further crack down on industry malpractices and steer the sector toward safety and standardization.