A recent trade-in policy push has significantly boosted the recycling of urban mineral resources this year. Data indicates that roughly 3.707 million vehicles were traded in during the first half of the year, and projections suggest the total volume of retired new energy vehicle (NEV) batteries in China will approach 500,000 tonnes by the end of 2024.
The question of how to properly process this large wave of old vehicles and their spent batteries is becoming increasingly urgent. For consumers, scrapping a vehicle under the trade-in scheme can unlock purchase subsidies for a new car.
Take Ms. Ma from Nanjing, Jiangsu, as an example. She recently decided to use the trade-in policy to dispose of her old car and buy a new one. Through a mobile mini-program for scrapped vehicle pickup appointments, she uploaded her vehicle's details and quickly received door-to-door collection service. Following her scrapped car, a reporter arrived at a local vehicle dismantling facility. Since the national trade-in subsidies were introduced, this plant has been receiving more than 20 scrapped vehicles daily, with staff noting an annual processing capacity of between 8,000 and 10,000 vehicles. Ms. Ma's car, which she had driven for over a decade, qualified for a scrap payment, and purchasing a new vehicle after scrapping also makes her eligible for a purchase subsidy. Buyers of new energy vehicles can receive a subsidy of 12% of the vehicle price, up to 20,000 yuan, while buyers of fuel-powered cars can get 10%, up to 15,000 yuan.
Once inside the processing facility, these scrapped cars undergo a detailed transformation from "junk metal" back into reusable industrial materials. Rows of end-of-life vehicles are neatly parked on the dismantling floor, awaiting inspection and processing. The first step involves verifying the chassis and engine numbers against the registration documents to confirm the vehicle's identity before dismantling begins. Using specialized equipment, workers systematically remove the engine, seats, wiring harnesses, and plastic components, leaving only the bare frame in a matter of minutes. In another workshop, compressors crush the frames and metal parts into compact bales, which are then sent to steel mills to be smelted into new steel. Meanwhile, hazardous wastes such as batteries, waste oil, and coolant are handed over to certified professional companies for safe disposal. Through this meticulous dismantling process, a standard family car can yield dozens of industrial raw materials.
Ma Houlong, head of Nanjing Chengkuang Resource Recycling Technology Co., Ltd., noted that over the past year, his company has recovered roughly 5,000 tonnes of scrap steel and ensured the compliant transfer and disposal of waste plastics, tires, and rubber, with a projected 20% increase in capacity this year. Industry data suggests that recycling every 10 million scrapped vehicles can regenerate 10.35 million tonnes of steel, 750,000 tonnes of non-ferrous metals, 900,000 tonnes of plastic, 750,000 tonnes of rubber, and 600,000 tonnes of glass, leading to significant savings in mineral resources and energy consumption.
The trade-in policy primarily targets gasoline passenger cars registered before June 30, 2013, and NEVs registered before December 31, 2019. However, dismantling NEVs differs from fuel-powered vehicles, with the removal and recycling of the power battery being the most critical step. Research reports forecast that retired NEV batteries in China will approach 500,000 tonnes this year, raising the question of how to manage such a large volume. Experts stress that all dismantled batteries must be handed over to comprehensive utilization enterprises for standardized treatment. Improper disposal could lead to electrolyte leakage and heavy metal contamination, posing environmental risks.
At an NEV dismantling workshop, each removed battery is tagged with a unique QR code. Wang Fengkui, technical director at the company, explained that every battery can be scanned in the traceability system, linking it directly to the original vehicle's information and creating a complete closed loop. Beyond full traceability, safety protection is another key focus. The company has built special facilities to handle emergencies like thermal runaway, fires, and leaks, including a self-developed explosion-proof storage box equipped with sprinklers, smoke alarms, and explosion-proof fans. The plant is also fitted with infrared thermal imaging monitoring, fire suppression sandboxes, and water-based fire extinguishers. After compliant removal, these batteries are sent to professional recyclers, where chemical processes extract materials like nickel, cobalt, manganese, and lithium. Recovery rates for nickel and cobalt reach 99.6%, and lithium recovery exceeds 90%. These recycled materials can be used to produce new cathode materials for fresh batteries, achieving a true "from source back to source" resource loop.
Regulatory oversight of battery recycling is accelerating, both at the enterprise level and through policy changes. Starting April 1, 2026, the new "Measures for the Recycling and Comprehensive Utilization of Waste Power Batteries from New Energy Vehicles" will take effect, establishing a full-chain, full-channel, and full-lifecycle supervision system. Scrapped vehicles must be processed with their batteries intact, with a missing battery treated as a missing vehicle. All dismantled batteries must be sent to certified recycling outlets or utilization enterprises, and illegal dismantling is prohibited. Since July 30 of this year, "comprehensive utilization" has been officially defined solely as material regeneration through processes like dismantling, crushing, and smelting. The regulations also ban the use of retired batteries in unauthorized areas such as e-bikes. This shift means the previous approach of prioritizing echelon use before recycling has been abandoned, requiring all retired batteries to enter formal recycling channels, steering the industry toward standardized growth.
China's reliance on imports remains high, with about 70% for lithium, over 85% for nickel, and up to 95% for cobalt, leaving the supply chain of primary mineral imports vulnerable to geopolitical fluctuations. By 2030, photovoltaic panels, wind turbines, and power batteries will hit their peak retirement phase, accelerating the formation of "urban mines." The upcoming 15th Five-Year Plan for circular economy development has elevated this sector to a key pillar for safeguarding national strategic mineral resource security. The plan aims for a national annual recycling volume of major renewable resources to reach 510 million tonnes by 2030, with 4.5 billion tonnes of bulk solid waste utilized, and the industry's output value climbing from 5 trillion yuan to 8 trillion yuan. This also targets a 16% increase in resource productivity compared to 2025 levels.
To achieve these goals, China will systematically improve its recycling systems, enhance extended producer responsibility, expand the application of recycled materials, promote high-level remanufacturing, and harness the full potential of traditional urban mines. Focus will also be placed on filling gaps in recycling for "new three items" like NEV batteries, improving supply chains, upgrading the circular economy sector, and boosting resource efficiency. Zhang Yingjian, head of the Resources and Environment Business Department at China International Engineering Consulting Corporation, emphasized that developing the circular economy during the 15th Five-Year Plan period is both a necessity to tackle resource and environmental constraints and a critical mission to strengthen industrial chain resilience and gain new competitive advantages. Moving forward, China intends to build a supply framework with both primary and recycled resources, securing long-term resource safety.
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