China’s EV Market Is Booming. There’s Just One Problem

China's electric vehicle (EV) market has experienced explosive growth, with annual sales soaring from around 1 million in 2018 to more than 16 million in 2025. As EV batteries have a typical lifespan of about eight years, the nation is now facing the challenge of managing a surge in retired batteries. The number of batteries requiring disposal or reprocessing is expected to skyrocket in the coming years, presenting a significant waste-management and recycling problem.

According to a joint study by researchers from China and the United States, the country generated 400,000 metric tons of EV battery waste in 2023. By 2030, this figure is projected to rise to 1.69 million metric tons, and by 2040, it could reach a staggering 22.39 million metric tons. Critics of EVs have long contended that their environmental advantages are overstated, as they do not eliminate tailpipe emissions, but rather shift the pollution burden to the end-of-life stage.

While China initially took steps to build a recycling system, the reality is that much of the used-battery supply continues to flow through uncertified recyclers. This raises serious environmental and safety concerns, including contamination and improper disposal. In Jiangxi Province, an uncertified company was found to have improperly dismantled 364 metric tons of waste lithium iron phosphate batteries in 2024, causing vegetation to die across 6 acres of forest and killing over 420 cubic feet of standing timber.

China began developing a formal EV battery recycling system in 2018, placing over 150 companies on a certification "white list" authorized to process retired vehicle batteries. By 2023, these certified companies had a combined annual processing capacity of 623,000 metric tons, more than doubling the volume of batteries retired that year. However, the certified companies only managed to handle around 25 percent of those batteries, highlighting a major gap in recycling efforts.

An investigation by Yicai, a prominent Chinese financial news outlet, revealed the extent of this gap. The researchers attempted to contact every company on the white list and found that more than 100 were either no longer operating or could not be reached. The authors called this effort to control the informal market a "losing battle," stressing the environmental and safety risks posed by improper battery dismantling, including fires, water contamination, and soil pollution.

Unlicensed operators pose a significant threat to the recycling process, as they can pay more for used batteries by avoiding the costs associated with safe testing, dismantling, and pollution control. They often sell batteries to unapproved applications, such as aftermarket range-extending battery packs, which can create substantial fire and safety risks due to the lack of proper testing and grading.

A recent incident in Changzhou, Jiangsu Province, saw a Xiaomi SU7 electric sedan catch fire due to the use of an aftermarket range extender battery.

Recycling batteries into raw materials offers a more commercially promising path, with advanced processes capable of recovering over 95 percent of certain critical battery materials. However, unlicensed recyclers, lacking the necessary technology and infrastructure, are unlikely to achieve such high recovery rates. The use of uncertified recyclers not only poses environmental risks but also exposes workers to toxic materials, raising concerns about health, human rights, and pollution.