On July 30, 2026, the Ministry of Industry and Information Technology (MIIT) issued an announcement abolishing the second-life application clauses in the Industry Standard Conditions for Comprehensive Utilization of Used NEV Power Batteries (2024 Edition). It will no longer carry out announcement management for second-life battery producers, and all such producers previously included in the announcement list were removed. The announcement list for disassembly recycling enterprises remains unchanged.
The announcement specified that it is prohibited to use used power batteries, after disassembly and reassembly, in the form of battery packs, modules, or cells for e-bikes and other application scenarios prohibited by laws and regulations. Second-life processed products must comply with the corresponding quality standards. Meanwhile, relevant standardization bodies will revise or abolish related national and industry standards for second-life applications, competent authorities will strengthen enforcement and investigate the production of substandard products from end-of-life power batteries, and industry associations and other social groups will cease activities such as publicity, exhibitions, and training related to second-life applications.
This adjustment does not prohibit second-life applications but removes the official qualification endorsement, returning the second-life business to market-based competition. Previously, announcement qualifications were an important reference for automakers and battery factories in allocating end-of-life battery supply. After cancellation, competition for battery sources will become more market-oriented, and enterprises’ detection capabilities, quality control levels, and downstream channels will become the main considerations.
In recent years, safety hazards and industry disorder related to second-life products from end-of-life power batteries have been prominent. Retired batteries exhibit significant differences in operating conditions and varying degrees of aging, making consistency and safety difficult to guarantee after reassembly. A large number of non-standard battery cells have entered the two-wheeled electric vehicle market, causing frequent safety accidents. Meanwhile, issues such as second-life qualification affiliation and shell company arbitrage have also been rather prominent. The regulatory approach has shifted from pre-approval of qualifications to in-process and post-event oversight, aiming to hold enterprises accountable for their product quality and safety responsibilities.
From the perspective of market impact, the policy is conducive to promoting the standardized development of the disassembly recycling industry and improving the lithium battery recycling market environment. Enterprises lacking actual processing capabilities and relying on qualification arbitrage will gradually exit, and channels for non-compliant second-hand battery cells will be squeezed. The competitive environment for legitimate recycling enterprises will improve, and some end-of-life batteries with low residual value and high sorting difficulty will flow more into the recycling process, which is expected to optimize the raw material supply for recycling enterprises. Crushing stage, policy adjustments will directly drive growth in demand for the crushing and dismantling of end-of-life batteries. Previously, some second-life companies only conducted simple sorting and reassembly, with batteries flowing downstream without undergoing the crushing process. As informal second-life channels are blocked, more end-of-life batteries will enter formal recycling lines, producing black mass through crushing and sorting, and the operating rate at the crushing end is expected to improve. At the same time, industry standardization will squeeze the survival space of non-compliant small workshops' crushing capacity, with formal enterprises possessing environmental protection qualifications and scale advantages benefiting more significantly. In the short term, when battery residual value is high, enterprises still prefer second-life application, and as the retirement volume of power batteries has not yet entered a rapid growth period, the increase in black mass production will be limited.
Hydrometallurgy, the increase in black mass supply will gradually transmit to the metal salt segment, providing some support for the production of recycled products such as nickel sulphate, cobalt sulphate, and lithium carbonate. It is worth noting that second-life applications still have legitimate scenarios such as energy storage and backup power supply, and second-life products that meet standards still have market space; not all end-of-life batteries will shift to recycling. The pace of production release is still constrained by multiple factors: enterprises need to judge the disposal method based on battery residual value and market prices, with low-residual-value batteries prioritized for recycling; hydrometallurgical capacity expansion and ramp-up require time, limiting short-term production growth. In the medium and long term, as the volume of end-of-life batteries gradually grows and industry standardization improves, the volume of batteries entering the formal hydrometallurgical system will steadily increase.
This policy is a continuation of a series of regulatory measures in the power battery recycling field since 2026. Multiple requirements for second-life application standards have been introduced this year, and industry supervision has continued to tighten. As local implementation rules and cross-departmental enforcement advance, the lithium battery recycling industry will further move towards standardization, with traceability management, safe production, quality control systems, and compliant operations becoming core competitive strengths of enterprises.
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