China temporarily bans using retired EV batteries in energy storage systems

As Taiwanese tech media reported, China’s National Energy Administration has announced regulations to prevent using retired EV battery packs in newly established energy storage systems until there are technological breakthroughs in managing consistency of battery cells and systems in place to monitor the operation of retired battery packs and evaluate their performance.

For existing energy storage systems that use retired EV-use battery packs, operators are required to strengthen monitoring and management, the sources said.

Most EV-use battery packs are retired when energy storage capacities diminish to 70-80% of the original levels, according to industry sources. Retired EV battery packs are either reused in energy storage systems or recycled to obtain precious metals.

There is controversy about reuse of retired EV-use battery packs in energy storage systems mainly because battery cells are likely to vary in degradation of performance and the cost of controlling consistency in such degradation may be higher than that of using new batteries, the sources said.

Another reason for China’s temporary ban on reuse of retired batteries in energy storage systems is illegal collection of such battery packs, according to Chinese media.

The Chinese government has designated a number of battery processors to collect retired EV-use battery packs and set up nearly 10,000 collection stations around China. However, the actual results have been far short of expectation, because there are many small unauthorized collectors competing for retired battery packs.

Skipping all required control, these illegal collectors can save processing costs and in turn can pay much higher prices for retired batteries than officially designated ones.