2026 Power Battery Recycling Sector Faces Compliance Shakeout as New Rules Take Effect

On April 1, 2026, the Interim Measures for the Recycling and Comprehensive Utilization of Waste Power Batteries from New Energy Vehicles, issued by the Ministry of Industry and Information Technology and five other ministries, officially took effect, marking the industry's entry into a compliance-regulated phase. The measures introduce a mandatory scrapping system for vehicles and batteries together, a digital ID for power batteries, and a full-lifecycle traceability system, while granting multi-department joint enforcement powers. The Ministry of Ecology and Environment reported that more than 1,200 illegal recycling outlets have been shut down nationwide. The EU's New Battery Regulation, set to take effect in 2027, imposes strict requirements on full-lifecycle data traceability and disclosure of recycling metrics.

In 2025, domestic power battery retirement volume reached 820,000 tonnes, with comprehensive utilization exceeding 400,000 tonnes. The State Administration for Market Regulation disclosed in October 2025 that the domestic power battery recycling market size in 2024 exceeded RMB 48 billion. In 2025, exports of new energy vehicles accounted for 40% of total vehicle exports. Gotion High-Tech's power battery recycling project in Spain received approval in May 2026, with a total investment of EUR 950 million.

Automakers and third-party companies are deepening cooperation. Changan Automobile and Stellantis have each set up recycling joint ventures with Tianqi Co. Environmental company Wandes announced in March that it would spend RMB 31.95 million to acquire 68% stakes in two recycling companies, Anhui Jiaqi and Wuhu Minghao. Foreign environmental giant Suez Group acquired a 35% stake in domestic lithium battery recycler Xunying New Energy, establishing a lithium battery recycling cooperation project in Changshu. Leading recyclers continue to expand capacity. GEM recycled 53,000 tonnes of power lithium batteries in 2025, up 46% year on year, representing more than 10% of the total national scrap volume. Its battery recycling segment contributed 4.89% of revenue, with a gross margin of 8.15%. GEM plans to increase its battery recycling processing scale to 80,000 tonnes in 2026, up 52% year on year. Enterprises such as Ganfeng Lithium, Huayou Cobalt, and EVE Energy are also advancing capacity expansion and overseas recycling network layouts.