Strategic extended producer responsibility can double China’s formal electric vehicle battery recycling with improved sustainability

Where a retired electric vehicle (EV) battery ends up matters for people and the planet. In China, the world’s fastest-growing EV market, factors such as low consumer awareness and weak incentives divert most retired batteries into informal, unregulated channels, where toxic leaks, unsafe work conditions, and loss of valuable materials are common. Curbing this problem is exceptionally difficult because consumers, informal and formal recyclers, and governments have conflicting incentives and behaviors, creating deep uncertainty about how the situation can be changed. To address this complexity, we built a game-theory model that captures stakeholder strategies and market dynamics influencing how a battery is recycled. The results revealed that strengthened extended producer responsibility (EPR) could shift >90% of China’s retired batteries into formal recycling channels by 2060 while halving environmental damage. This strategic EPR, combining decisive early enforcement with well-timed incentives, offers a viable path toward a self-sustaining formal recycling system, with the potential for complementary measures such as reorienting informal recyclers as flexible collectors.

China’s booming electric vehicle (EV) sector is generating a rapidly growing stream of retired batteries, most of which still enter pollution-intensive informal recycling channels. How to redirect these batteries into formal recycling remains unclear, particularly given the complex and dynamic interactions among governments, producers, consumers, and informal recyclers. Here, we develop an integrated framework combining evolutionary game theory, system dynamics (SD), Global Change Analysis Model (GCAM)-based stock-flow projections, and life cycle impact assessment (LCIA) to capture stakeholders’ co-evolution under expanded extended producer responsibility (EPR) policies. Under business as usual, formal recycling stagnates at around 53% after 2030. By contrast, a consolidated EPR strategy—combining early enforcement, targeted incentives, and stronger market conditions—could raise the formal recycling share above 92% by 2060 while reducing environmental damage by 44%–73%. These findings highlight the urgency of strengthening EPR systems, repositioning informal recyclers as flexible collectors, and aligning with stricter international regulations to build a robust formal recycling system.