[SMM Analysis] Guotai Environmental Protection Enters the Battery Recycling Track

On February 24, Guotai Environmental Protection held its 15th meeting of the 4th Board of Directors, reviewing and approving the "Proposal on Amending the Business Scope, Revising the <Articles of Association>, and Handling Industrial and Commercial Registration Changes." This adjustment not only represents a simple business expansion but also marks a critical transformation of this traditional environmental protection enterprise into the field of new energy circular economy—adding businesses such as lithium-ion battery recycling, PV equipment leasing, and battery manufacturing, officially entering the rapidly growing closed-loop of the new energy industry chain.

Guotai Environmental Protection's strategic adjustment is not accidental. In recent years, China's new energy vehicle industry has maintained rapid growth. Data shows that in 2025, China's NEV production and sales both achieved nearly 30% growth, with NEVs accounting for 47.9% of new vehicle sales. As early power batteries gradually enter their retirement phase, a massive backend market is accelerating its formation.

Power battery recycling involves the collection, processing, and reuse of waste power batteries, aiming to promote resource circulation, protect the ecological environment, and drive long-term industry development. Currently, the standardized recycling rate for waste power batteries in China remains below 50%, with a large number of waste batteries flowing into informal channels such as "small workshops," posing environmental risks and causing the waste of strategic resources. Standardized recycling and utilization of retired power batteries are of great significance for reducing environmental pollution, ensuring the security of national critical metal resources, promoting industrial greening, and enhancing international competitiveness.

In February 2025, the State Council Executive Meeting reviewed and passed the "Action Plan for Improving the NEV Power Battery Recycling and Utilization System," explicitly proposing to improve the standard system and achieve standardized, safe, and efficient recycling and utilization of power batteries. Shortly thereafter, six departments including the Ministry of Industry and Information Technology, the National Development and Reform Commission (NDRC), and the Ministry of Ecology and Environment jointly issued the "Interim Measures for the Recycling and Comprehensive Utilization of Waste Power Batteries from New Energy Vehicles," which will take effect on April 1, 2026.

This upcoming regulation is regarded by the industry as a "watershed" for the sector. The "Management Measures" establish a "full life cycle" supervision system for power batteries, create a national traceability information platform for NEV power batteries, promote the monitoring of power battery flows and information traceability throughout their life cycle, and clarify the recycling responsibilities of power battery enterprises and NEV producers.

This means that power battery recycling will shift from the past "guerrilla" operations to an era of "regular army" engagement. The introduction of the new regulation sets a clear "code of conduct" for the industry, aiming to resolve the structural contradiction between the "segmented" layout of the industry chain and the "full life cycle" management requirements, and to build a closed-loop chain of "production—use—recycling—regeneration."