On May 12, Sina Finance republished a Securities Daily article reporting that China’s power-battery recycling industry has reached a standardization inflection point, one month after the interim management rules for recycling and comprehensive use of waste new-energy vehicle power batteries took effect. The article said some battery-scrap prices have risen sharply this year. On May 11, lithium iron phosphate powder was quoted at RMB 17,000 per tonne for Li above 2.5% and RMB 29,500 per tonne for Li above 3.8%, while mixed ternary electrode powder was quoted at RMB 108,300 per tonne. Some ternary lithium and LFP categories were up more than 50% from the beginning of the year.
Those prices explain why recycling is no longer a marginal environmental service. Retired batteries contain lithium, nickel, cobalt, manganese and other materials that can support resource security and reduce dependence on primary mining. As EV sales scale up, the recycling channel becomes part of the strategic battery supply chain. The ESG value is not only waste reduction. It is resource recovery, pollution prevention, supply-chain resilience and future product-carbon credibility.
Listed companies are already positioning themselves. The article said GEM dismantled 52,576 tonnes of power batteries in 2025, up 46%, exceeding 10% of nationwide social scrappage, and recycled 15,076 tonnes in Q1 2026, up 40%. It also said CATL’s Brunp Recycling has built the country’s largest directional recycling base, with 99.6% recovery for nickel, cobalt and manganese and 93.8% for lithium, annual retired-battery processing capacity of 270,000 tonnes, 300,000 tonnes of additional waste power-battery recycling capacity under construction in 2026, and a future plan for more than one million tonnes of capacity.
These are hard numbers, but they should not lead to easy optimism. The same report noted that China has about 248,000 battery-recycling-related enterprises, while overall standardization remains low. Informal recyclers still compete aggressively for used batteries, second-life products vary in quality, non-compliant products enter the market, and illegal crushing and disposal create safety and environmental risks. This is the central contradiction: the market is valuable enough to attract capital, but disorderly enough to threaten the ESG case.
The compliance issue is especially important because batteries are hazardous industrial products. Poor dismantling can create fire, toxic-material and wastewater risks. Weak second-life testing can put unsafe products into storage, backup-power or low-speed-vehicle applications. If the industry grows without traceability, a battery sold as circular input may carry hidden environmental liabilities. Investors should therefore distinguish between permitted, traceable, technology-capable recyclers and commodity traders chasing scrap margins.
The strongest recycling businesses will control channels. Automaker partnerships, battery-maker closed loops, digital battery passports, standardized collection networks and direct contracts with fleets or insurers can reduce dependence on informal bidding. Technology also matters: high recovery rates are useful only if they are achieved safely, economically and with verified environmental controls. Scale without compliance can simply concentrate risk.
The policy angle is that battery recycling sits at the intersection of EV adoption, resource security and circular economy. If China can formalize the channel, it can reduce raw-material import pressure and strengthen the lifecycle credibility of its battery exports. If informal competition remains dominant, foreign buyers and regulators may discount circular claims and scrutinize environmental controls. In a world of battery passports and supply-chain due diligence, documentation is as valuable as recovered material.
The investment takeaway is selective. Battery recycling has moved from policy theme to earnings opportunity, but the winners will not be every company with a recycling announcement. The winners will be firms with traceable supply, technical recovery capability, environmental permits, stable downstream customers and the discipline to avoid unsafe scrap competition. This is where China’s EV success has to become circular, not just electric.
From Issue 005 · 11–17 May 2026.
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