[SMM Analysis] Number of Applicants for Vehicle Replacement Continues to Soar Sharply; How Can Battery Recycling Cope with the Wave of Retirements?

"As of September 10, the number of applications for automobile trade-ins nationwide this year has exceeded 8.3 million, equivalent to more than 30,000 people applying to exchange for new vehicles each day," according to the latest data released by the National Bureau of Statistics (NBS). The trade-in policy has become a powerful engine boosting automobile consumption.

With the allocation of 300 billion yuan in ultra-long-term special government bond funds to local governments in four batches to strengthen and expand the scope of consumer goods trade-ins, consumption potential is being released in an orderly manner.

Meanwhile, China's new energy vehicle (NEV) ownership has surpassed 31.4 million units, and the first batch of power batteries benefiting from 8-year warranties are gradually entering the retirement phase. Driven by the "trade-in" subsidy policy, the retired power battery recycling market, which should be experiencing a boom, is instead facing severe challenges.

As the trade-in policy advances, more NEVs will enter the retirement phase, increasing pressure on the power battery recycling market.

Data shows that China's retired power battery volume will reach 820,000 mt in 2025, corresponding to a recycling output value of approximately 70 billion yuan.

However, the standardized recycling rate remains below 50%, and illegal dismantling workshops persist despite repeated bans. The industry is facing the dual challenges of a retirement wave and recycling difficulties. In the face of the increasingly imminent "retirement wave," China is integrating the life cycle management concept throughout the main thread of the battery industry, striving to fully connect the entire chain of recycling, remanufacturing, and reuse.