China ends special promotion of second-life EV batteries

Why it matters: China electrified urban buses early, so it is the first major market to handle batteries retiring in large numbers. How it regulates reuse and recycling will shape expectations for Europe and other regions that will face the same wave of retired packs later.

China has dropped its special promotion of second-life electric vehicle batteries while still allowing qualified reuse, according to CleanTechnica. New rules effective in April 2026 repealed the earlier framework for what Chinese policy called cascade utilization (梯次利用), or putting retired vehicle batteries to work in less demanding roles.

In 2021, policy encouraged companies to reuse retired packs in stationary energy storage, backup power and charging infrastructure. The idea was that a battery too weak for driving could still hold substantial electricity, potentially avoiding the manufacture of a new battery.

A July 30 announcement from the Ministry of Industry and Information Technology withdrew special recognition for cascade-utilization companies and told industry associations to stop promotional activities tied to the category. Some reporting described this as a ban on second-life batteries, but retired vehicle batteries can still be used where the resulting products meet applicable standards. Reuse in electric bicycles and other restricted applications is prohibited.

The ministry's stated concern is safety: reassembled batteries with varying remaining capacity and inconsistent cell condition may not have been adequately tested. By the end of 2025, China had 551,400 new-energy urban buses, 87.5% of its urban bus fleet, so large numbers of packs are now reaching retirement.

Economics also matter. New lithium iron phosphate batteries have become much cheaper, and testing, repackaging, controls and warranties can eat up the savings from reusing old cells. Operators that know a battery's history may still find suitable stationary uses, but product quality and cost will decide how much of the expected second-life market develops.