China Shifts From Promoting Second-Life EV Batteries to Requiring Qualified Products
New rules effective April 2026 repeal the cascade-utilization framework and ban reuse in electric bicycles due to safety concerns.
China has revised its regulatory approach to retired electric vehicle batteries, moving away from broad promotion of second-life applications toward a stricter framework requiring qualified products for specific uses. The change marks a significant pivot from policies that encouraged reuse in stationary storage and infrastructure.
What Happened
New regulations effective in April 2026 repealed the earlier "cascade-utilization" framework that had been in place since 2021. Following a July 30 announcement from the Ministry of Industry and Information Technology, special recognition for cascade-utilization companies was withdrawn, and industry associations were directed to discontinue promotional activities associated with the category. While some reports characterized this as a ban on second-life batteries, the source clarifies that retired vehicle batteries can still be used in suitable applications provided the resulting products meet applicable standards. However, reuse in electric bicycles and other restricted applications is now prohibited. The ministry cited concerns over the safety of inadequately tested, reassembled batteries that often vary in remaining capacity and cell condition.
Why It Matters
This regulatory shift addresses the industrial reality of battery retirement as large-scale electric fleets age. China had previously electrified much of its urban bus fleet, reaching 551,400 new-energy urban buses by the end of 2025, representing 87.5% of the total fleet. As these early vehicles reach the end of their automotive service, the volume of retired batteries has turned reuse from a pilot project into a major industrial activity. The change also reflects economic pressures; while new lithium iron phosphate batteries have become significantly cheaper, the costs associated with testing, repackaging, controls, and warranties for old packs can consume the savings from reuse. Second-life installations must now compete with new products designed for the same applications, making the economics of reuse more challenging for companies buying mixed retired packs.
The Bottom Line
China’s updated rules do not eliminate second-life battery opportunities but impose stricter quality and safety standards. Operators with known battery histories and suitable stationary applications may still find viable paths, but the era of broad promotional support for cascade utilization has ended.
