With the retired power battery volume and process scrap expected to surpass 2 million tonnes by 2030, the installed capacity of repurposing and battery dismantling (from scrap to black mass) has already reached 4.23 million tonnes/year by end-2024, highlighting the issue of overcapacity which is expected to linger for years, according to Mysteel's survey.
In detail, while the retirement tide of power batteries from electric vehicles (EVs) is gradually approaching, it is estimated that the annual retired battery volume will reach 571,400 tonnes by 2028, including 268,900 tonnes of ternary batteries and 300,000 tonnes of lithium iron phosphate (LFP) batteries. By 2030, the retired volume is projected to further increase to approximately 1.67 million tonnes, with 588,100 tonnes ternary batteries and 1.08 million tonnes LFP batteries, demonstrating structural growth.
Source: Mysteel
Meanwhile, with the sustained growth in the EV and energy storage sectors, the volume of waste materials generated during battery production is also rising. By 2028, the process scrap from battery manufacturers is projected to reach 413,900 tonnes, including 51,500 tonnes from ternary battery production and 362,400 tonnes from LFP battery. By 2030, the total process scrap is expected to increase to 596,200 tonnes, comprising 58,200 tonnes from ternary processes and 538,200 tonnes from LFP processes, serving as a significant supplementary source of recyclable resources.
Source: Mysteel
Against the slowly rising supply, China's combined lithium-ion battery repurposing and dismantling capacity already reached 4.23 million tonnes/year by the end of 2024, but the recycling volume was merely 654,000 tonnes through the year, indicating a nominal average capacity utilization rate of around 15.5%, with the actual rates even lower.
Despite the low capacity utilization rate, the capacity expansion continues to accelerate. According to incomplete statistics, the recycling capacity under construction is estimated at 400,000 tonnes/year in 2025, with an estimated additional 300,000 tonnes/year newly operational by year-end. Total annual capacity is projected to exceed 5 million tonnes/year by the end of 2025. If existing corporate plans materialize, the capacity will surge to 11.092 million tonnes/year by 2030.
In contrast, the total recyclable resources (including retired batteries and process scrap) in 2030 are estimated at only about 2.265 million tonnes, resulting in an average capacity utilization rate below 20%. The widening gap between capacity and actual supply further highlights the deepening oversupply in the sector.
And the anticipated large-scale "retirement wave" of batteries post-2024 has failed to materialize as initially projected. Increased consumer tolerance for battery degradation and extended vehicle lifespans have resulted in far fewer batteries available for recycling than expected, leaving existing recycling capacity underutilized. Apart from overcapacity, the supply shortage facing the recyclers is exacerbated by the non-compliant workshops.
According to Mysteel's market research, in addition to the existing battery dismantling capacity, most hydrometallurgical enterprises have also extended their businesses to the dismantling sector. Though a significant portion of the already constructed dismantling capacity remains idle, the players adhere to the strategy of "better to have it and not need it than to need it and not have it."
Against this backdrop, the short-term imbalance between supply and demand and intensifying competition are unlikely to change. Corporate survival strategies are gradually diverging: some rely on battery cell manufacturers to secure production scrap, others partner with ride-hailing or bus companies to control the source of retired batteries, while others collaborate with recycling peers to build resource networks and upgrade technologies for cost efficiency.
Written by Aggie Hu, huchenying@mysteel.com
