China could meet up to 67% of its energy storage demand by 2050 by redeploying retired EV batteries into grid applications, according to new research. For auto recyclers, the opportunity is clear: operators with strong battery testing, grading, safety and traceability capabilities may gain access to a higher-value second-life market.
A new study suggests used electric vehicle batteries could supply up to 67% of China’s energy storage demand by 2050, provided packs are safely tested, graded and redeployed. For auto recyclers, the findings highlight a growing operational and commercial role in the second-life battery value chain.
Used electric vehicle batteries could become a major source of grid storage in China, according to new research, creating a sizeable second-life market for packs removed from vehicles while they still retain around 80% of their original capacity. For auto recyclers, the findings point to growing demand for battery testing, grading and safe handling as EV volumes continue to rise.
Study highlights role for retired EV batteries
China has identified a significant opportunity in its EV scrapyards: reusing retired vehicle batteries for stationary energy storage. A study published in Cell Reports Sustainability, led by Ruifei Ma at Tsinghua University, concludes that second-life batteries could meet up to 67% of China’s energy storage demand by 2050.
The research focuses on batteries that have been removed from automotive service but still retain 80% of their original capacity. While that level of degradation reduces driving range and makes packs less attractive for continued vehicle use, it is less problematic in stationary applications, where large numbers of battery modules can operate together on longer and more predictable cycles.
Why storage demand is rising
The rapid expansion of solar and wind generation is increasing pressure on grid operators to build more storage capacity. When wind output drops or solar generation is weak, the system needs backup power quickly, particularly during peak demand periods such as mornings and winter months.
According to the study, if China deploys second-life batteries across different chemistries and continues to use them down to around 40% of their initial capacity, second-life storage could accelerate sharply after 2030. By 2050, total capacity could reach 2 trillion watts, roughly double the estimated contribution from new batteries and pumped hydropower.
A growing battery feedstock
The industrial backdrop supports that outlook. In 2024, more than 17 million electric vehicles were sold worldwide, representing nearly 20% of the global vehicle market, with almost two-thirds of those sales taking place in China.
That growing EV parc will generate an increasingly large stream of batteries reaching end-of-first-life with substantial residual capacity still available. Rhodri Jervis of University College London underlined the resource-efficiency case for reuse: “We shouldn’t discard materials that have cost a lot of money to extract and process when they still retain 80% of their usable capacity.”
The study also estimates that second-life battery reuse could reduce electricity system costs by around 2.5%.
Sorting, grading and safety remain critical
The researchers also make clear that scaling second-life use will depend on much better battery assessment and control. Packs and modules must be classified according to condition and grouped with units of similar remaining capacity, so that weaker batteries do not drag down overall performance.
Damaged modules must also be identified and removed before they enter any stationary storage system. Gill Lacey of Teesside University said: “Clearly the risks are greater, so it is necessary to strengthen safety, insulation, and balancing systems.”
Each battery also requires temperature and voltage monitoring at cell level to reduce the risk of overheating and potentially severe fires.
What this means in practice for auto recyclers
For auto recyclers, the message is practical rather than theoretical. A larger second-life battery market would increase the value of accurate battery triage at the end-of-life stage of vehicles. Operators that can safely remove, store, test and classify EV batteries may be better placed to supply packs into reuse channels rather than sending them directly to materials recycling.
It also raises the bar for capability. Recyclers will need robust procedures for battery handling, condition assessment, fire prevention and traceability. Over time, second-life applications could create an additional revenue stream, but only for operators able to demonstrate consistent grading, safe storage and reliable data on battery state of health.
In that sense, China’s “treasure” is not simply the battery itself. It is the opportunity to turn end-of-life EV processing into a more specialised and potentially more valuable part of the circular economy.
Sources: Ma et al., Cell Reports Sustainability (2025), DOI: 10.1016/j.crsus.2025.100613
Further Reading on Auto Recycling World
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Data Sharing for Circular End-of-life EV Batteries
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ReJoule – Solving the EV Battery Remanufacturing Bottleneck
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Autocirc launches Europe’s first established solution for circular management of EVs and batteries
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Toyota Tsusho strengthens EV-battery recycling from collection to recycle stages
