A burgeoning “gray market” for electric vehicle battery recycling is reportedly thriving in China, with unlicensed workshops handling an estimated 75% of the nation’s retired power battery packs. These illicit operations are generating substantial profits, estimated at around 10,000 yuan (1,400 USD) per vehicle, while posing significant environmental and safety hazards and undermining the legitimate recycling industry. According to the “White Paper on China’s Lithium-ion Battery Recycling, Disassembly, and Cascade Utilization Industry (2024),” while China’s nominal battery recycling capacity reaches 3.8 million tons, “white list” enterprises only processed 623,000 tons, indicating a capacity utilization rate of less than 18%. In stark contrast, non-“white list” entities, particularly small workshops, account for 75% of actual waste battery recycling. The Ministry of Ecology and Environment has already conducted over 8,300 inspections on waste power battery dismantling and processing units.