China Abolishes Echelon-Use Policy for Retired EV Batteries, Removes 100 Companies from List

The Ministry of Industry and Information Technology (MIIT) recently issued an announcement on abolishing and revising policies and standards related to the "echelon use" of retired power batteries from new-energy vehicles and regulating industry activities. It abolished the echelon-use provisions, ended the management of echelon-use company announcements, and removed the 100 announced echelon-use companies from the industry specification list, including BYD, SVOLT and Gotion High-Tech. The policy adjustment brings to a close the special regulatory model for echelon use.

As the number of new-energy vehicles in China continues to grow, power batteries have entered a period of large-scale retirement. The resource-based utilisation of retired power batteries follows two paths: first, testing and recombining batteries with good remaining capacity for echelon use; second, crushing and smelting to extract metal materials for recycling. The original policy intent was to fully tap the residual value of batteries and complete the circular economy chain. However, in long-term industry practice, the concept of echelon use has gradually been distorted. Many small workshops, using echelon use as a cover, skip the complete testing process, simply disassemble and recombine retired battery cells, and produce low-cost battery products for the market. Such products have poor consistency and can easily cause thermal runaway and fire risks. Some non-compliant products have flowed into high-risk applications such as electric bicycles and power banks.

To address these industry problems, in December 2025 the MIIT issued the Interim Measures for the Recycling and Comprehensive Utilisation Management of Retired Power Batteries from New-Energy Vehicles, which redefines the scope of comprehensive utilisation of power batteries and clarifies that comprehensive utilisation refers only to resource-based utilisation through regeneration and smelting, removing the echelon-use concept at the policy level. The latest announcement is the supporting implementation of the interim measures, achieving full alignment of policy, standards and industry management. A responsible official from the MIIT Department of Energy Conservation and Comprehensive Utilisation said that echelon use will no longer be treated as a special category. All battery products produced from retired power batteries will be placed uniformly under the general battery production regulatory framework. The key to determining whether a retired power battery can re-enter the market is whether it meets the quality standards and safety requirements of the application scenario.

At the local level, Guangdong, Jiangsu, Zhejiang, Shandong, Sichuan and Hunan have continued to strengthen full-chain supervision of retired power batteries, issuing special programmes to centrally rectify illegal practices such as companies using the echelon-use label to simply disassemble and recombine retired battery cells, and illegally using retired power batteries in high-risk applications such as electric bicycles. The Hunan Provincial Department of Industry and Information Technology recently issued a policy to establish itemised dynamic supervision ledgers for all linked business entities across the province's power battery production, vehicle manufacturing and comprehensive utilisation chains, and to follow up on completing rectification of existing issues.