After 100 enterprises have been cleared out, this sector has started to become highly valuable.
On September 4, Luo Xiaoli, Deputy Director-General of the Department of Energy Conservation and Comprehensive Utilization of the Ministry of Industry and Information Technology, stated at the 2026 World Power Battery Conference that during the 15th Five-Year Plan period, China's power batteries will enter a large-scale decommissioning phase, making it particularly important to comprehensively improve the level of recycling and utilization. In 2025, the comprehensive utilization volume of new energy vehicle power batteries in China exceeded 400,000 tons, with recycling service outlets covering more than 300 prefecture-level cities, and the accessibility and convenience of the recycling network continued to improve. For the next step, in terms of power battery recycling and utilization, we will gradually improve the system of regulations and standards, strengthen whole-chain management, accelerate technological and model innovation, and stimulate the driving force for industrial development.
Just over a month ago, the Ministry of Industry and Information Technology issued Announcement No. 20 of 2026 (referred to as the "Announcement"), officially abolishing the announcement management system for echelon utilization enterprises, and all 100 echelon utilization-related enterprises were removed from the white list. At this point, the echelon utilization white list system that has been in operation for more than ten years has officially come to an end.
From policy encouragement to the establishment of the white list, to the prominent chaos in the industry, and then to the full abolition of the system, China's power battery echelon utilization has completed a complete journey of policy exploration. In the short term, the power battery recycling industry is facing growing pains, but in the long run, this will push the industry to return to safety and quality orientation, and is bound to accelerate the high-quality development of the entire industry.
Development History of the Echelon Utilization White List
Public information shows that China's echelon utilization policy concept first originated in 2012, when the State Council issued the "Energy Conservation and New Energy Vehicle Industry Development Plan (2012-2020)", which first proposed the establishment of a power battery echelon utilization and recycling management system.
At that time, the original intention of the policy design was very clear. After the power battery capacity decays to below 80%, it is no longer suitable for vehicle installation, but the cells still retain 50%-80% of the remaining capacity. If directly crushed and smelted, available electric energy will be wasted. However, through testing, sorting, and restructuring, decommissioned batteries can be used in scenarios such as energy storage and communication backup power, which can not only fully tap the remaining value of batteries and develop circular economy, but also reduce the procurement cost of energy storage equipment and reduce the consumption of strategic minerals such as lithium, cobalt and nickel.
However, in the early stage, the power battery recycling industry was mixed, and a large number of unqualified small workshops dismantled decommissioned batteries in an unordered manner, leading to serious problems such as environmental pollution and resource loss. Therefore, in 2016, the Ministry of Industry and Information Technology issued the "Specification Conditions for the New Energy Vehicle Waste Power Battery Comprehensive Utilization Industry", launching the white list system for comprehensive utilization enterprises. At that time, only the recycling utilization track was set up, and there was no classification for echelon utilization enterprises. In August 2018, the first batch of white lists was released, and all 5 enterprises were recycling smelting enterprises, mainly focusing on the business of decommissioned battery crushing and metal extraction.
With the rapid expansion of the domestic new energy vehicle industry, the first batch of power batteries has gradually entered the decommissioning cycle, and the market demand for echelon utilization business has risen rapidly. In December 2019, the Ministry of Industry and Information Technology issued the "Specification Conditions for the New Energy Vehicle Waste Power Battery Comprehensive Utilization Industry (2019 Version)", officially adding the echelon utilization enterprise declaration category, and the echelon utilization white list system was formally established, forming a dual-track parallel supervision mode of "echelon utilization + recycling utilization" for the recycling of waste power batteries in China.
In September 2020, the second batch of comprehensive utilization enterprise lists was announced to the public, and echelon utilization enterprises appeared in the list for the first time, marking that echelon utilization enterprises have officially stepped onto the industrial stage.
After that, the third batch in December 2021 and the fourth batch in November 2022 were released one after another, and more and more battery enterprises and recycling enterprises applied for the echelon white list.
In August 2021, five departments issued the "Administrative Measures for Echelon Utilization of New Energy Vehicle Power Batteries", restricting echelon products from multiple dimensions such as product testing, identification management, and application scenarios, forming a complete policy supporting system of "specification conditions + special administrative measures".
On January 17, 2024, the fifth and last batch of comprehensive utilization enterprise lists was released, adding 68 enterprises. So far, the total number of echelon-related enterprises across the country has reached 100, including leading enterprises in the industry such as CATL's Brunp Recycling, BYD, GEM, Hive Energy, and Gotion High-Tech.
Chaos and Contradictions Under the White List System
The original intention of the establishment of the white list system is to screen formal enterprises that meet the standards of technology, environmental protection and safety, set industry benchmarks, guide the standardized development of the industry, and eliminate unqualified black workshops. However, there is a huge gap between ideal and reality. This guiding management system has gradually exposed institutional shortcomings in industrial practice, laying a hidden danger for the subsequent abolition of the policy.
After the operation of the white list system, a large number of enterprises entered the echelon track, but the development of the industry gradually deviated from the original intention of the policy design. Some enterprises regarded the "echelon utilization" label as a shield for lowering production standards, mistakenly believing that echelon products belong to second-hand batteries, which can relax safety and performance standards, and the white list qualification has instead become a credit cover for inferior products.
From the perspective of technology itself, the sources of decommissioned power batteries are complex, and the sources, batches and usage conditions of the battery packs lead to huge differences in the overall state of the cells. To make good echelon products, high-precision testing equipment is required to test and screen one by one, and then re-design and utilize them. The whole process is complex and the investment is huge. Therefore, a large number of enterprises in the market, including some enterprises that have obtained the white list qualification, one-sided pursue benefits, only do simple unpacking and rough sorting, skip the complete testing and verification links, and directly assemble cells with uneven states into battery packs for external sales, resulting in poor product consistency and high risk of thermal runaway.
The more prominent safety hazards come from the inflow of non-compliant scenarios. The use of echelon batteries in electric bicycles is explicitly prohibited by policies, but a large number of dismantled and reorganized decommissioned automotive batteries bypass supervision and flow into the two-wheeler electric vehicle market. Relevant surveys show that a considerable part of the modified battery cells in electric bicycle fire accidents come from decommissioned automotive power batteries, which directly threaten the safety of people's lives and property. At the same time, the gray industrial chain has spawned, a large number of decommissioned batteries bypass the formal recycling channels and flow to small workshops, formal white list enterprises cannot get sufficient supply of goods, and the recycling market price is disorderly raised.
In March 2024, the Ministry of Industry and Information Technology suspended the acceptance of applications for comprehensive utilization enterprises and raised the application threshold. On December 31, 2025, six departments jointly issued the "Interim Measures for the Administration of Recycling and Comprehensive Utilization of New Energy Vehicle Waste Power Batteries", deleting the definition of "echelon utilization" from the top-level system, redefining comprehensive utilization as recycling and resource utilization activities such as disassembly, crushing and smelting, releasing a clear signal of institutional adjustment.
Echelon Utilization is Officially Abolished
100 Enterprises Removed from the White List
On July 30, 2026, the Ministry of Industry and Information Technology officially issued Announcement No. 20 of 2026, abolishing all echelon utilization-related clauses in the "Specification Conditions for the New Energy Vehicle Waste Power Battery Comprehensive Utilization Industry (2024 Version)", no longer carrying out the announcement management of echelon utilization enterprises, all 100 echelon utilization enterprises were removed from the list, and the recycling utilization white list was fully retained and continued to take effect.
The Announcement specifically points out that the removal of an enterprise from the echelon white list does not mean that it is punished, nor does it mean that it is prohibited from carrying out business activities. The cancellation of the special qualification for echelon utilization does not completely prohibit the reorganization, processing and utilization of decommissioned power batteries. Instead, it must implement the same set of national mandatory quality and safety standards as new batteries, no longer allowing production and sales with reduced standards in the name of "echelon products", and the market is not allowed to continue to use "echelon utilization" as a business concept for marketing packaging.
At the same time, the Announcement also draws a hard red line for the development of the power battery recycling industry. That is, waste power batteries and reorganized battery products are strictly prohibited from flowing into legally prohibited scenarios such as electric bicycles. In addition, all standard-setting institutions are required to sort out, revise and abolish the echelon utilization-related contents in the documents, and industry associations stop exhibitions, training and publicity on the theme of echelon utilization. In addition, illegal acts of assembling unqualified products with waste batteries into the market will be severely cracked down.
After the policy was implemented, the market generally believed that: "The path that used to be profitable by simple sorting and restructuring no longer works. Enterprises must increase investment in battery testing and safety verification equipment, and the compliance cost will rise to a certain extent. In the short term, the industry will face reshuffling, but in the long run, it will help reverse the disorderly low-price competition pattern. The formulation of the policy is precisely based on such a realistic consideration."
Taking Gotion High-Tech as an example, in March 2021, the Feidong Waste Battery Comprehensive Utilization Project of Gotion High-Tech was signed and landed, and Hefei Gotion Circular Technology Co., Ltd. was established. The project is positioned as "prioritizing echelon utilization to maximize the economic value of decommissioned batteries, with recycling as the fallback plan". In December of the same year, Hefei Gotion High-Tech Power Energy Co., Ltd. was selected into the third batch of white lists.
With the full abolition of the domestic echelon policy and the cancellation of the white list, Hefei Gotion Circular Technology Co., Ltd. also adjusted its business accordingly. Enterprise Check shows that the company made an industrial and commercial change on August 31, and its business scope was changed to "recycling of renewable resources, processing of renewable resources, processing and treatment of non-metallic waste and debris, technology research and development of resource recycling and utilization, etc.", deleting the expression related to "echelon utilization".
The Industry Ushered in Major Benefits
In the long run, although the abolition of the echelon utilization white list brings short-term business pains and model reconstruction, it is conducive to the healthy development of the industry, promotes the industry to shift from concept-driven to technology-driven, and resolves safety hazards and market chaos.
The essence of this policy adjustment is the change of regulatory concept. It no longer relies on the enterprise qualification white list to endorse products, and implements unified end-product supervision for both new batteries and old cell reorganized batteries. Whether a product can be launched on the market depends on whether it meets the mandatory national standards, not the qualification of the enterprise. Enterprises engaged in power battery recycling business need to be fully equipped with testing and safety verification capabilities, and decommissioned batteries that cannot meet the product standards can only be crushed, smelted and recycled.
For those small and medium-sized echelon utilization enterprises that only do simple sorting and packaging and have no smelting capacity, with the rise of compliance costs, their living space is further reduced, and they even exit the market. For leading enterprises with recycling smelting qualifications, they will obtain more battery supplies. In the past, the communication backup power and small industrial and commercial energy storage markets that purchased a large number of low-cost echelon batteries will gradually shift their demand to new energy storage batteries.
Looking back at the full life cycle of the echelon utilization white list system, this is a complete policy exploration in the field of circular economy in China. At the beginning of the policy establishment, it was hoped to fully tap the remaining value of decommissioned batteries through the guidance of the enterprise list; in industrial practice, in the face of complex market reality, the system exposed its inherent shortcomings, and finally chose to abolish the special white list and turn to a product-oriented supervision mode.
The end of the echelon utilization white list does not mean that the secondary value of decommissioned batteries completely disappears, but marks the end of the era of "special identity exemption". In the future, in the power battery recycling industry, recycling smelting will become the core main line of comprehensive utilization, and the reorganization of old cells will return to the regulatory framework for ordinary battery products. After short-term pains, the market chaos will be curbed, the safety bottom line will be firmly established, resources will be gathered to compliant leading enterprises, and the entire industry will get rid of concept speculation, embark on a high-quality development path of quality first and safety first, and better serve the new energy industry and the national resource recycling strategy.
This article is from the WeChat official account "Rongzhong Finance" (ID: thecapital), written by Dai Xianchao, and published with authorization from 36Kr.