China Shreds Retired EV Batteries for Metals, While U.S. Gives Them a Second Life on the Grid
Millions of electric vehicle batteries still hold significant capacity after they can no longer power a car for long distances. As these packs age out of their original role, governments and companies face a critical choice: recycle them right away or put them to work in less demanding roles for several more years.
China and the United States are diverging sharply on that decision, and the gap could have ripple effects on EV prices, grid reliability, and the affordability of energy storage, according to a recent report from Rest of World.
A large wave of early EV batteries is now reaching retirement age. China, once a proponent of second-life applications, has shifted gears. Since April 1, new regulations in China prioritize metal recovery over reuse. Spent batteries contain valuable materials—lithium, nickel, and cobalt—and Beijing sees them as a domestic source of critical resources.
“Many countries without lithium resources are seeing end-of-life batteries as a potential source of lithium to be more self-sufficient,” Adam Megginson, principal analyst at Benchmark Mineral Intelligence, told Rest of World. He described the approach as “a kind of urban mining.”
In the U.S. and Europe, by contrast, companies and policymakers have generally been more open to repurposing batteries before dismantling them. A pack that no longer delivers a strong driving range can still store electricity for warehouses, factories, and the power grid—often for another five to ten years.
The strategic difference partly stems from China’s heavy reliance on lithium-iron-phosphate (LFP) batteries. These batteries are cheaper and contain fewer high-value metals, making recycling less profitable unless regulation mandates it. That dynamic has pushed China toward aggressive recycling mandates rather than market-driven reuse.
How old EV batteries are handled could influence both the price of future electric vehicles and the cost of storing solar and wind power for later use. Giving aging batteries a second life on the grid also helps stabilize the power system as renewable energy penetration grows.
Recycling remains essential because the materials inside batteries are finite, expensive, and heavily contested globally. Cobalt and nickel retain high value, and lithium is a strategic resource. Pulling those materials from retired batteries reduces demand for new mining and helps steady supply chains.
But economics complicate the picture. “The cheaper the battery, the less economic it is to recycle,” Beatrice Browning, battery recycling technology lead at Benchmark Mineral Intelligence, told Rest of World. “And with cheaper batteries comes more reliance on regulation to mandate their recycling.”
In the U.S., second-life projects are moving beyond the pilot stage. Waymo recently struck a deal to send its used nickel-and-cobalt batteries to B2U Storage Solutions for energy storage projects in California and Texas. That approach can extend a battery’s working life by another five to ten years before final recycling.
“By extending the use of these batteries as grid storage, we are monetizing the full potential of EV batteries, now providing crucial stability to the power grid as energy demand continues to grow,” said B2U CEO Freeman Hall.
Europe, meanwhile, is putting its own policy framework in place, with rising lithium recovery requirements and minimum recycled-content standards for new batteries that tighten over time. China is using battery tracking and producer-take-back rules to ensure old packs reach recyclers.
The contrasting strategies reflect different industrial priorities and resource endowments. For global automakers and battery suppliers, the divergence means navigating two very different end-of-life regimes — and preparing for a future in which batteries don’t simply die, but get reborn or stripped for parts.
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