First Batch of New Energy Vehicle Batteries Approaching Eight-Year Warranty Expiration: What Happens After Disposal?

In recent years, the share of new energy vehicles (NEVs) in passenger cars has been steadily increasing. By the end of 2024, the total number of NEVs in China is expected to reach 31.4 million, with the country leading the world in battery installations for many years. As the first batch of batteries approaches the end of their eight-year warranty period, coupled with various subsidy policies for NEV replacements, China is set to face a peak period for the retirement of power batteries. Reports estimate that by 2030, the market scale for battery recycling will exceed 100 billion RMB. Efficient recycling and green utilization of these batteries are crucial. According to regulations from the Ministry of Industry and Information Technology and other relevant departments, since 2016, manufacturers of passenger vehicles must provide at least an eight-year or 120,000 km warranty for core components such as batteries, motors, and electronic controls. This means that the first batch of NEVs benefiting from these policies are now entering their warranty expiration period. At the same time, with new models constantly upgrading in terms of range, functionality, and safety, many owners are choosing to replace their vehicles before the warranty period ends. In August last year, the Ministry of Commerce and six other departments raised the standard for vehicle scrapping and replacement subsidies, increasing the subsidy for individuals who scrap old vehicles and purchase new energy passenger cars from 15,000 RMB to 20,000 RMB. In January of this year, the National Development and Reform Commission and the Ministry of Finance further clarified that individuals scrapping NEVs registered before December 31, 2018, and purchasing designated models could enjoy a subsidy of 20,000 RMB per vehicle. Replacing old vehicles not only allows owners to take advantage of subsidy policies but also helps avoid issues such as battery capacity degradation, slow charging, and safety concerns. Therefore, many NEV owners have decided to upgrade their vehicles. The proper disposal of these batteries is essential to prevent waste of resources. Whether it is personal users replacing old vehicles or the retirement of operational vehicles like buses and ride-hailing cars, a significant number of power batteries will be retired. It is estimated that by 2030, the total volume of retired batteries in China will exceed 3.5 million tons. These batteries contain heavy metals and chemical substances such as lithium, cobalt, and nickel. Improper disposal not only leads to resource wastage but could also cause safety incidents like electric shock and explosions, as well as pollution of soil, water sources, and air. Therefore, finding an efficient and safe method for recycling these used batteries is critical for the sustainable development of the new energy industry. Experts have pointed out that the actual retirement cycle of power batteries often exceeds the industry estimate of eight years by more than five years, meaning that the true large-scale retirement wave will gradually arrive after 2030. Currently, it is a window period for industrial layout, and establishing a safe, efficient, and sustainable recycling system before this wave arrives is crucial. So, what happens to a retired power battery during the recycling process? The first step in battery recycling is to complete a scanning registration, which is then uploaded to a national traceability platform. After that, the batteries are sent to different workshops for discharging, disassembly, and capacity testing. Currently, there are two main routes for retired batteries: cascade utilization and recycling, with capacity testing being a key step in determining their final path. Capacity testing involves performing a health check on each battery to measure how much energy it can still store. If a battery's capacity is measured to be less than 60% of its nominal capacity, it is deemed unsuitable for cascade utilization; those with capacities above 60% are allocated to cascade utilization products based on different project needs. Before capacity testing, batteries of different models, sizes, and structures must undergo non-destructive disassembly. Previously, this was primarily done manually, which was inefficient and posed risks such as short circuits and fires. However, the newly upgraded flexible intelligent disassembly production line has resolved these issues, achieving zero thermal runaway during the disassembly process and improving overall disassembly efficiency by 50%. After capacity testing, cells with a capacity above 60% are deemed suitable for cascade utilization and sent to an automated production line for reassembly and packaging. They can continue to 'serve' in applications where high energy density is not required. Seemingly inconspicuous used batteries contain significant potential for a second life in the eyes of technicians. After screening and evaluation, these cells are widely used in home and enterprise energy storage systems, low-speed electric vehicles, backup power supplies, construction machinery, and various other fields, covering dozens of application scenarios. Technicians explain that as long as the previously functional cells have passed strict evaluations and are of acceptable quality, combined with a scientific overall package design, their lifespan can generally be extended by 1 to 5 years, truly maximizing their utility. Despite advancements in recycling technology and an improving policy framework, a survey report from the Development Research Center of the State Council reveals that by the end of 2023, the standardized recycling rate of power batteries for new energy vehicles in China is less than 25%. A significant number of retired batteries do not enter formal channels; instead, they are sold to dismantlers or disposed of privately. What causes these batteries to go astray? The recycling director of GreenMei (Wuhan) Urban Mining Industry Group, Luo Laixin, stated that batteries sold to private enterprises or individuals in informal workshops do not require invoices, making them highly lucrative, sometimes worth thousands or even tens of thousands of RMB. The majority of the cars they recycle do not have batteries, accounting for over 70% of the total. Industry insiders indicate that there is a common dilemma in the power battery recycling industry: compliant enterprises struggle to earn profits while non-compliant small workshops enjoy low costs and high returns. Compliant enterprises operate according to national standards, requiring continuous investments in facility construction, equipment upgrades, safety, environmental protection, and technology development, leading to high costs and slow returns. In contrast, many unqualified small workshops take a different path: they rarely engage in environmental protection, use the simplest and most brute methods for battery disassembly, causing pollution and safety hazards, while also capturing resources by offering higher acquisition prices. To address issues such as the long recycling chain and complex flow of power batteries, the Ministry of Industry and Information Technology and other regulatory bodies are continuously strengthening source management and oversight throughout the entire process. They have introduced policy documents that clearly state that companies must establish a quality assurance mechanism that allows for product traceability and accountability. How can the rebirth journey of retired batteries achieve full process monitoring and traceability? In a battery production workshop of a battery manufacturing company in Ningde, Fujian, each battery cell produced has a unique QR code, much like its ID, recording key information such as production time, environmental conditions, and performance parameters. If any anomalies occur, traceability information can be retrieved at any time. Additionally, leveraging big data analysis, this information can support the optimization and upgrading of batteries. Once these cells are assembled into battery packs, they will also be assigned new traceability codes, achieving more comprehensive lifecycle tracking. In a new energy vehicle manufacturing plant, before the battery packs are installed, the information of the vehicle and the battery pack is bound together. After binding, the relevant information is uploaded to the national traceability management platform for new energy vehicle batteries, placing power batteries under lifecycle supervision, with each step from installation, usage, to retirement and recycling clearly recorded. In February of this year, the State Council's executive meeting approved an action plan to improve the recycling and utilization system for new energy vehicle power batteries, emphasizing the need to strengthen management across the entire chain, target bottlenecks, and build a standardized, safe, and efficient recycling system. This is a future-oriented systemic project that requires firm accountability from enterprises, raising technical thresholds, and leveraging digital means to enhance the visibility and management capabilities of the entire lifecycle.