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

After spending the past decade building the world’s largest electric vehicle market, China is confronting one consequence of its success: a growing wave of batteries nearing the end of their service life.

Annual sales of battery-powered vehicles in China, including fully electric vehicles and plug-in hybrids, have surged from about 1 million in 2018 to more than 16 million in 2025. With EV batteries typically lasting about eight years, the country is entering its first major wave of battery retirements.

The number of batteries requiring disposal or reprocessing is expected to grow rapidly in the years ahead. That poses a major waste-management and recycling challenge for the nation.

China reported 400,000 metric tons of EV battery waste last year. A joint study by researchers in China and the United States projected that the figure could grow to 1.69 million metric tons in 2030 and 22.39 million metric tons by 2040.

For years, critics of electric vehicles have argued that their environmental benefits are overstated. EVs eliminate tailpipe emissions, but their full life-cycle effects—including the environmental and safety risks posed by discarded lithium-ion batteries—remain a concern. Governments largely chose to accelerate EV adoption anyway, betting that recycling systems would eventually catch up.

China began building a recycling system early and has created enough nominal capacity to handle the emerging wave. But much of the country’s used-battery supply continues to flow through uncertified recyclers, which poses serious environmental and safety risks linked to contamination and improper disposal. In a case announced in Jiangxi Province in 2024, an uncertified company was found to have improperly dismantled 364 metric tons of waste lithium iron phosphate batteries. The resulting contamination caused vegetation to die across 6 acres of forest and killed more than 420 cubic feet of standing timber.

Although recycling technology has improved, sustaining a profitable battery recycling business remains challenging. Because China leads the world in EV adoption, how Beijing manages both the risks and opportunities of battery retirement could help shape the industry’s global model.

China began developing a formal EV battery recycling system as early as 2018. More than 150 companies have since been placed on the government’s certification “white list,” authorizing them to process retired vehicle batteries.

By 2023, certified companies had a combined annual processing capacity of 623,000 metric tons, more than 1.5 times the volume of batteries retired that year. Yet they handled only about 25 percent of those batteries, highlighting a gap in recycling efforts.