By 2030, the volume of retired batteries in a single year will surpass 1.06 million tons — the equivalent of nearly 3,000 tons of power batteries waiting to be processed every day. That was the forecast from Wang Pan, a chief expert at the China Automotive Technology and Research Center Co., Ltd. (CATARC), during the 2026 World Power Battery Conference. At the same event, Bao Wei, assistant president at Huayou Cobalt, posed a different question: "The biggest issue is where the batteries went. We just can't collect them."An "urban mine" worth nearly 100 billion yuan is taking shape, yet the compliant companies guarding its entrance have nothing to dig. The challenge of retiring power batteries lies not in processing, but in collection: vast numbers of retired batteries simply never enter formal channels. China’s new-energy vehicle industry spent a decade figuring out how to build, sell, and export its products. Now, it faces a harder question: what to do with them when they're spent.False Boom: The Retirement Wave Is Here, but the Formal Sector Is StarvingThe data on scale is unequivocal.Luo Xiaoli, deputy director of the Department of Energy Conservation and Comprehensive Utilization at the Ministry of Industry and Information Technology, made it clear at the conference: China's power batteries will enter a phase of mass retirement during the "15th Five-Year Plan" period. Ouyang Minggao, an academician at the Chinese Academy of Sciences and a professor at Tsinghua University, has previously estimated that the cumulative volume of retired batteries will top 2 million tons by 2030.The figures on the supply side are just as striking. In 2025, China's power battery installations reached 769.7 GWh — a more than tenfold increase from 2020. That same year, the comprehensive utilization of spent batteries exceeded 400,000 tons, with recycling service outlets spanning more than 300 cities nationwide. The battery recycling market was already worth over 48 billion yuan in 2024 and is projected to surpass the 100 billion yuan mark by 2030.Image source: Huaban.comYet, companies on the ground tell a different story. Bao Wei was blunt: "In our industry, money isn't the problem. Technology isn't the problem. Safety and environmental protection aren't the problem. The only problem is raw materials." He went so far as to describe the sector's future as a "false boom."The paradox is simple enough. While the volume of retired batteries is certainly rising, compliant recycling capacity is rising even faster. Vast amounts of capacity sit idle waiting for raw materials that never arrive, diluting utilization rates and creating a mismatch where demand is surging but production lines sit still.The Price Gap: Batteries Flow to the Highest BiddersSo, where are the batteries going?The answer lies with the unlicensed channels offering higher prices. Industry research indicates that over 60% of retired batteries end up in unqualified "small workshops" or with second-hand dealers. Meanwhile, roughly 45% of consumers aren't even aware of formal recycling channels. During a joint crackdown in 2026, authorities investigated and shut down more than 1,200 illegal collection points — a move that indirectly confirms the sheer scale of the gray market.Driving this flow is a sharp price gap. Compliant firms must shoulder costs for environmental protection, safety, taxes, and traceability. Unlicensed channels, free of such burdens, can simply offer more to buy. When sellers look only at the price, batteries naturally flow to the highest bidder.This gap exposes a structural reality: retired batteries are still priced as "waste" rather than as "resources." As long as pricing is anchored to a discount on virgin materials, compliant companies will forever be stuck with a cost disadvantage.The price disparity is just the surface. The deeper problem is buried in the product design phase.Image source: Huaban.com"No company designs batteries for disassembly," noted Li Junchao, deputy general manager of Shenzhen Xinwangda Renewable Materials Co., Ltd. The primary goals of battery R&D have always been safety, reliability, and energy density, while ease of disassembly and recyclability have long been sidelined. This directly drives up costs in the pre-treatment phase of recycling.Chen Zhongwei, a researcher at the Dalian Institute of Chemical Physics, Chinese Academy of Sciences, sums up the industry's pain points as threefold barriers: scattered and chaotic collection channels that drive up costs; a complex pre-treatment process plagued by inconsistent battery pack specifications; and the resulting series of efficiency losses.It is worth emphasizing that technology itself is not the bottleneck. Industry leaders like Brunp Recycling and GEM achieve recovery rates of 99.6% for nickel, cobalt, and manganese, while lithium recovery rates have surpassed 96.5%. In other words, once batteries make it through the factory gates, the path to turning them into renewable materials is clear. The real obstacle is that a decade ago, when battery pack structures were designed, no one set aside cost considerations for disassembly.Digital ID: Using Traceability to Bring Batteries BackRegulation is tightening from both ends simultaneously.On April 1, 2026, the "Interim Measures for the Management of Recycling and Comprehensive Utilization of Waste Power Batteries for New Energy Vehicles" — jointly drafted by the Ministry of Industry and Information Technology and five other departments — officially took effect. The regulation establishes a flow monitoring system covering the entire chain: production, sales, maintenance, dismantling, and recycling. Two provisions are particularly targeted. First, "vehicle-battery integrated scrapping" mandates that retiring a new energy vehicle must include its power battery; if the battery is missing, the vehicle is considered incomplete. This physically cuts off the path for private dismantling and resale. Second, the new rules revoke previous special management files on cascade utilization, strictly banning the direct or modified supply of scrap batteries to restricted sectors like e-bikes.Of even greater long-term significance is the digital ID. The state is establishing a digital identity management system for power batteries. Relying on a 24-digit national standard battery code, the goal is to ensure that "sources can be traced and destinations checked."Policy pressure continues to mount. During the "15th Five-Year Plan" period, authorities will draft relevant administrative regulations and launch joint law enforcement campaigns to further standardize recycling and utilization practices. The goal is to push the comprehensive utilization of scrap batteries beyond the million-ton mark by 2030.Local network construction is already underway. Sichuan has designated five cities — Chengdu, Suining, Yibin, Dazhou, and Ya'an — to lead the development of the first batch of five regional battery recycling centers. These projects must submit acceptance applications by late June 2027 at the latest, aiming to serve as hubs for a standardized recycling network across the province. The battery-swapping model, meanwhile, has been granted a specific exemption: since vehicle and battery ownership are separated, the operator owns the batteries and is uniformly responsible for their health management and recycling.What must be clear is this: traceability solves the visibility of "where the batteries went," but it doesn't solve the economics. As long as unlicensed channels hold a price advantage, the battle over where batteries flow will not end. What regulation can truly change is making the math visible where it was once hidden.