China’s battery recycling industry in 2030: rising volumes, profits concentrated around secure feedstock

How much processing demand will emerge by 2030?

At MIIT’s January 2026 briefing, officials cited research projecting more than one million tonnes of waste EV batteries generated during 2030.^[1] Automakers should secure collection channels and processing partners early, translating future retirements into scheduled, traceable annual treatment plans.

A separate NRDC and China EV100 think-tank report projects over 1.5 million tonnes of retired batteries in 2030, approximately 69% LFP and 31% ternary batteries. Its framework assumes an average eight-year battery life.^[4] These estimates support annual demand on a million-tonne scale. Individual plants should be sized around locally accessible battery volumes.

Retirement timing depends on vehicle intensity, repairs, accidents, second-hand transfers and battery durability. Warranty expiry does not send a functioning battery automatically to a recycler. Automakers should forecast returns from their fleets and repair records, separating commercial vehicles, swapping assets and privately owned cars, then translate accessible sources into annual contracts.

Manufacturing scrap is another source. The IEA’s 2026 outlook expects it to dominate global recycling feedstock until the mid-2030s and identifies substantial excess processing capacity.^[5] New plants will compete for factory scrap while gradually taking more retired packs. Waiting for mass vehicle retirement is not a sufficient supply strategy.

Regulation brings collection responsibility back to producers

The six-department rules effective April 1, 2026 require automakers to take responsibility for batteries installed in vehicles they sell and establish or commission collection facilities matched to sales in relevant cities. Battery producers have obligations for batteries within their prescribed scope. Repair, swapping and dismantling businesses must transfer waste batteries through the specified channels, with coding, technical information and traceability requirements.^[2]

Automakers need to know who receives a battery and how it is processed. Providers able to combine collection, logistics, treatment records and material destinations can compete for longer-term contracts. Competitive bidding for individual loads will increasingly sit alongside annual service and compliance arrangements.

The April joint enforcement initiative targets improper transfers, traceability failures, illegal dismantling, pollution and transport violations.^[3] Licensed, compliant operations incur costs that informal competitors may avoid. Sustained enforcement should raise the cost of non-compliance and improve formal operators’ prospects of securing long-term contracts with repair businesses, dismantlers and automakers.

The rules also prohibit waste EV batteries from being used directly or after processing in electric bicycles. Other applications must meet the relevant product and safety requirements.^[2] Storage reuse projects must budget for testing, reconfiguration, remaining life, warranties and liability. Cheap acquisition can be offset by extensive sorting and repair.

Policy development continues. The September 28 explanation of the battery industry’s five-year plan includes improving collection and recycling. September’s proposed recycling standards-system guide remains a consultation document.^[13][14] Recycling is becoming a routine industrial responsibility, with demand grounded in physical waste and compliance rather than temporary incentives.

LFP changes how recyclers earn money

Ternary batteries offer nickel, cobalt and lithium recovery value. LFP lacks nickel and cobalt revenue, increasing dependence on lithium, copper, aluminium and other recovered components while requiring tighter reagent, energy and wastewater costs. Research shows that lithium salt prices can change the economic ranking of recycling routes.^[9]

The commercial calculation is straightforward: recovered-material revenue plus any contracted service fee, less feedstock purchasing, collection, dismantling, processing, environmental and financing costs. Rising metal prices also prompt battery owners to raise asking prices. If suppliers capture most of the material value upfront, higher throughput leaves little additional margin for processors.

GEM’s 2025 annual report provides a useful operating reference: its power lithium battery recycling business generated approximately RMB1.817 billion in revenue at an 8.15% gross margin. ^[6] This margin leaves a strong incentive to control purchase prices, inventory financing and overheads. Purchase discounts, recovery yields, utilisation and inventory turnover influence cash generation more directly than national market size.

Toll processing should be prioritised: the battery owner retains material ownership and pays an agreed processing fee. For low-value batteries, contracts should specify how material proceeds offset treatment costs and who covers any shortfall. Fees should reflect processing, environmental and financing costs, with contractual adjustment mechanisms. This reduces a processor’s need to hold inventory as a commodity bet.

Technology: establish reliable processing, then scale direct regeneration

Sources for the processes and application requirements: ^[2][8][9]

China already has substantial extraction capability. The 2024 industry specifications raised the smelting-stage lithium recovery benchmark to at least 90%.^[11] CATL’s 2025 ESG report discloses 210,000 tonnes of waste batteries and materials recovered and 24,000 tonnes of regenerated lithium salts, with reported recovery rates of at least 99.6% for nickel, cobalt and manganese and 96.5% for lithium. ^[7]

A manufacturer-linked recycler such as Brunp can access upstream material and return recovered outputs to battery manufacturing. Independent firms need to secure supply and qualify downstream products separately. Channel development and material qualification should proceed alongside equipment investment.

Direct regeneration deserves development, particularly for well-sorted material of known composition. Commercial deployment still requires consistent batches, impurity control and customer validation. A review of recycling economics finds that some models omit transport, dismantling and capital expenditure.^[10] Whole-process unit costs and customer acceptance rates are more useful investment measures than a single laboratory recovery yield.

Three businesses worth building towards 2030

The first is contracted processing linked to automakers, battery plants and large fleet operators. Advance information on models, quantities and condition enables better logistics and sorting. Automakers should prioritise demonstrable receiving capacity and auditable records, with contracts specifying service capacity, incident liability and material settlement.

The second is low-cost, industrial-scale LFP processing. Energy, reagent reuse, impurity control, copper/aluminium separation and product sales must be optimised together. A high lithium extraction rate alone does not establish resilience to low lithium prices. The complete cost curve determines the minimum feedstock value a project can tolerate.

The third is testing, sorting, automated dismantling and traceability services. Automakers need not own every step, yet these activities affect safety and efficiency. Building equipment and services around contracted customers is a stronger entry route than selling generic capacity against national retirement projections.

Imports of qualifying recycled black mass have been permitted since August 2025, adding a potential feedstock channel.^[12] This concentrated output of battery shredding and sorting can supplement domestic supply. Quality, transport and origin-country export rules still need checking, and uncontracted imports should not be treated as guaranteed utilisation.

Through 2030, the most likely outcome is growing processing volumes, a larger formal collection sector and profits concentrated among efficient operators. Projects with contracted inputs, qualified buyers and verified costs deserve support; large plants without them should be deferred. Automakers should integrate recycling into product costs and supply agreements now. Specialist processors should establish feedstock and delivery relationships first, then expand capacity.