Trade-in policies have significantly boosted the recycling of urban mineral resources this year. Data shows that 3.707 million vehicles were traded in during the first half of this year, and it's projected that the number of retired EV power batteries in China will approach 500,000 tonnes annually. This raises a critical question: how should the massive influx of old vehicles and spent batteries be managed?
Under the trade-in policy, vehicle owners who scrap their cars can apply for a purchase subsidy. Recently, a resident in Nanjing, Jiangsu, decided to use this scheme to replace her old car. Using a mobile app for scrap vehicle appointment and recycling, she uploaded her vehicle details and quickly had a specialist come to her door for collection. Following the scrapped vehicle to a local processing plant, it was revealed that since the national vehicle trade-in subsidy was introduced, this facility receives over 20 scrapped cars daily. According to the staff, the plant can dismantle 8,000 to 10,000 vehicles annually. Her car, driven for over a decade, was assessed and qualified for the scrap value. Buying a new car after scrapping also allows her to claim a purchase subsidy. Specifically, purchasing a new energy vehicle can get a 12% subsidy (up to 20,000 yuan), while buying a fuel vehicle can get a 10% subsidy (up to 15,000 yuan).
What happens when scrapped cars enter the processing plant, and how do they transform from "scrap metal" into reusable industrial raw materials? Inside the dismantling area, rows of end-of-life vehicles await inspection and teardown. The process begins with verifying the VIN and engine number against the registration documents to confirm the vehicle's identity. Then, professional equipment is used to systematically remove engines, seats, wiring harnesses, and plastic components, leaving just the bare frame in a short time. In another workshop, compressors crush these metal frames into compact bales, which are then shipped to steel mills to be smelted into new steel. Hazardous wastes like batteries, waste oil, and coolants are handed over to certified professional companies for proper disposal. Through meticulous dismantling, a standard family car yields dozens of industrial raw materials.
The head of a local resource recycling company noted that in over a year, they've recovered around 5,000 tonnes of scrap steel, with plans to increase capacity by 20% this year. Data indicates that recycling every 10 million scrapped vehicles generates 10.35 million tonnes of recycled steel, 750,000 tonnes of non-ferrous metals, 900,000 tonnes of plastic, 750,000 tonnes of rubber, and 600,000 tonnes of glass, saving vast amounts of mineral resources and energy.
New challenges are emerging. Under the policy, eligible vehicles mainly include petrol cars registered before June 30, 2013, or new energy passenger cars registered before December 31, 2019. Dismantling new energy vehicles differs from conventional cars, primarily due to the removal and recycling of power batteries. Research suggests that retired EV batteries in China could reach nearly 500,000 tonnes this year. Experts emphasize that these batteries must be processed by authorized comprehensive utilization companies; improper disposal risks environmental pollution through electrolyte leakage and heavy metal contamination. In the new energy vehicle dismantling workshop, each battery gets a unique QR code. A technical director explained that scanning the code in the traceability system links the battery back to its original vehicle, creating a complete closed loop. Beyond traceability, safety is a critical concern. This facility has built a dedicated safety system for thermal runaway, fire, and leakage, including an explosion-proof storage box with sprinklers, smoke detectors, and explosion-proof fans, alongside infrared thermal imaging, sandboxes, and water-based fire extinguishers. Properly dismantled retired batteries are sent to specialized recyclers, where chemical processes recover nickel, cobalt, manganese, and lithium, achieving recovery rates of 99.6% for nickel/cobalt/manganese and over 90% for lithium. These recycled materials are then used to create new cathode materials for fresh batteries, truly closing the resource loop from "source to source."
New regulations are tightening the industry. From enterprise traceability to safety protocols, battery recycling is becoming more standardized, but a deeper institutional shift is underway. Starting April 1, 2026, a new management measure will fully implement a "whole-chain, all-channel, lifecycle" supervision system. Scrapped vehicles must be "vehicle-battery integrated"; missing batteries will be treated as missing vehicle parts. Removed batteries must go to compliant recycling points or utilization companies, with illegal dismantling strictly banned. As of July 30 this year, "comprehensive utilization" officially refers only to material regeneration via dismantling, crushing, and smelting. Using retired batteries for unauthorized purposes like electric bicycles is explicitly prohibited. This eliminates the previous "echelon use first, then recycling" approach, mandating that all retired batteries enter formal recycling channels, steering the industry toward standardized development.
New strategies are being planned for resource security. Currently, China's dependence on imports is around 70% for lithium, over 85% for nickel, and as high as 95% for cobalt, with growing geopolitical risks to supply chains. By 2030, solar, wind, and EV batteries will face a peak retirement wave, rapidly expanding the "urban mining" sector. In the 15th Five-Year Plan for the circular economy, it's been elevated to a key pillar for national strategic mineral resource security. The plan targets a national annual recycling volume of 510 million tonnes of major renewable resources by 2030, with 4.5 billion tonnes of bulk industrial solid waste utilized. The resource recycling industry's output is set to rise from 5 trillion yuan to 8 trillion yuan, and major resource productivity is expected to increase by 16% compared to 2025. The country will systematically refine the whole-chain recycling system by strengthening extended producer responsibility, expanding the use of recycled materials, promoting high-level remanufacturing, and fully tapping into traditional "urban mines." It also aims to address gaps in recycling new-type solid waste like solar panels and batteries, upgrading the industry chain. An expert from a consultancy stated that developing the circular economy is now a necessity for tackling resource and environmental constraints and is key to enhancing supply chain resilience and international competitiveness. The future will build a dual-supply structure of primary and recycled resources to secure long-term resource safety.
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