Global EV Battery Standards Tighten: What It Means for the Electric Mobility

Electric vehicles (EVs) have shifted from niche to mainstream, and the EV batteries are becoming a critical influencer of their rate of adoption worldwide. In just the last couple of years, EV sales and boom in the related battery market have shattered records worldwide, led by markets like China, Europe, and the United States. This rapid rise in volumes is prompting governments across the globe to set higher battery standards – from safety and performance to recyclability and transparency. 

In this blog, we unpack the latest trends driving the EV and EV-battery industries, the new wave of battery-focused policies, influenced by China’s latest moves and how they stack up against the US and EU, and what it all means for industry players in terms of manufacturing, supply chains, compliance, and innovation.

EV Adoption is Accelerating Worldwide

Global electric car stock (cumulative EVs on the road) has skyrocketed from virtually nothing a decade ago to over 40 million by 2023, with China leading the charge​. Our World in Data reports an exponential climb, especially after 2018, reflecting how EVs have become a mass-market reality in major economies. 

MarketsandMarkets predicts that the market is bound to grow by about 7.7 percent annually, rising from USD 396.49 billion in 2024 to USD 620.33 billion by as early as 2030.

This massive EV adoption is driving an equally impressive scale-up in battery production. In 2023, electric car growth pushed battery demand above 750 GWh, a 40 percent jump from 2022​. By 2024, global EV battery output reached over 850 GWh. Chinese battery giant CATL leads the pack as it became the first manufacturer ever to surpass 300 GWh of cells produced in a year​. 

Thus, the world’s EV fleet and the batteries that power them are scaling at an unprecedented pace, setting the stage for the next challenge: ensuring these batteries are safe, sustainable, and responsibly sourced.

Raising the Bar: New Battery Standards and Policies Worldwide

Responding to the EV boom and taking the game to the next level, especially making batteries safer and more sustainable, the governments are now responding by raising battery standards. 

Around the world, policymakers are converging on the idea that batteries must be safer to use and easier to reuse. Most notable laws and regulations are being framed in the major markets like the EU, the US, and of course, China.

EU Battery Regulations

The EU’s new Battery Regulation (2023) sets ambitious recycling and transparency standards. By 2027, recyclers must recover 50 percent of lithium and 90 percent of cobalt, nickel, and copper—rising to 80 and 95 percent, respectively, by 2031. 

From 2025, EV battery makers must audit their mineral sourcing to avoid conflict minerals and environmental harm. A “battery passport” will be mandatory by 2026, tracking material origin, carbon footprint, and battery health. Carbon footprint labels are required from mid-2024, with emission caps to follow. Performance standards are expected by 2027.

The US Governing Laws

While the US doesn’t yet have a single omnibus “battery law,” recent policies are indirectly forcing higher battery standards. The 2022 Inflation Reduction Act (IRA), for instance, ties valuable EV tax credits to strict battery sourcing criteria – components and critical minerals – favoring the US or its free-trade partners. 

On the safety front, US regulators like the EPA are moving to clarify and strengthen battery recycling oversight. In 2023 the EPA issued guidelines on how existing hazardous waste law applies to lithium-ion batteries, and it plans to introduce a dedicated national battery recycling policy by mid-2025​. Moreover, some US states are stepping up: California and New Jersey have explored Extended Producer Responsibility (EPR) laws. The trend in the US is clear – encourage EV growth with incentives, but simultaneously push industry to build a domestic, sustainable battery ecosystem (through carrots like tax credits and sticks like looming recycling rules).

Laws in Asian Markets

Asia’s major markets are likewise elevating standards with South Korea and India drafting policies to support lithium battery recycling and localization of materials​. Japan has long controlled battery waste and is investing in recycling tech. China, which we’ll cover next in depth, has been a pioneer in battery recycling regulations (since 2018) and is now implementing even stricter safety and reuse measures. 

China’s New Battery Rules: Driving Safety and Circularity

In April 2025, China’s Ministry of Industry and Information Technology (MIIT) introduced stringent EV battery safety rules under an updated GB 38031 standard to virtually eliminate EV battery fires, one of the major bottlenecks of EV growth. 

From July 1, 2026, all EV batteries must resist fires or explosions even during thermal runaway for two hours—far exceeding the previous 5-minute warning rule. The regulation also mandates rigorous testing, including crash impacts and 300 fast-charge cycles without thermal incidents. 

These standards surpass existing UN and EU norms, pushing global automakers to match China’s lead or risk exclusion from the world’s largest EV market. Major battery firms like CATL have already embraced the change, citing “no thermal propagation” designs meeting the new benchmarks.

Simultaneously, China is enhancing its battery recycling framework. An early 2025 action plan approved by the State Council requires that 60 percent of used EV batteries be repurposed annually for second-life applications like energy storage. When recycled, lithium extraction efficiency must reach at least 90 percent, while recovery of nickel, cobalt, and manganese must hit 98 percent. These numbers are highly ambitious and uncanny.

Impacts on Industry: Navigating Compliance and Opportunity

For automakers and battery manufacturers, this new policy landscape presents both challenges and opportunities. In the short term, compliance to new battery standards is a complex task. Companies must adapt battery designs, supply chains, and business models to meet a patchwork of evolving rules. 

For example, meeting the standards in China after mid-2026 may increase R&D and production costs per vehicle. Likewise, in Europe, battery suppliers now need detailed data on the carbon footprint of every battery and plan for QR-code passports on packs by 2026​. Administrative overhead is rising too. Automakers also have to coordinate take-back programs for end-of-life batteries to fulfill EPR obligations.

Supply chain management is another arena undergoing transformation. The IRA’s local sourcing rules in the US are already reshuffling where battery materials come from. We’re seeing North American and European battery plants secure contracts with mines in Australia, Indonesia, Chile, and other US trade partners to source lithium, nickel, and cobalt that meet “friendly origin” criteria. This also is prompting investments in domestic mining and recycling – for instance, new lithium extraction projects in Nevada, or recycling startups in Ohio – to create home-grown supplies.

In Europe, the need to use a portion of recycled content in new batteries by 2030 is driving companies to build out recycling capacity now. Battery makers who vertically integrate recycling (or ally with recyclers) stand to secure a valuable secondary source of raw materials and demonstrate compliance with ease. 

The Unifying Effect 

These regulatory pressures are accelerating innovation. A clear example is in battery safety engineering. Knowing that regulators will accept nothing less than fire-proof batteries, manufacturers are expediting development of technologies like advanced battery management systems, thermal foams, and cell-to-pack architectures that isolate failing cells. 

Some are switching to inherently safer chemistries like lithium iron phosphate (LFP), which is less prone to thermal runaway, for mass-market models to preempt safety issues. Other emerging battery techs are also on cards.

On the recycling side, high recovery targets have prompted a wave of startups and research into more efficient recycling methods like direct cathode recycling, hydrometallurgical processes to recover lithium economically, etc. Automakers are even exploring second-life uses for batteries, such as stationary energy storage farms using retired EV packs, both to defer recycling costs and to meet reuse mandates. Nissan, BYD, and others have pilot projects to repurpose used EV batteries for grid storage and backup power systems – a practice encouraged by China’s draft rules on recycling.

Next-Gen Batteries Emerging to Meet New Demands

Amid these changing requirements, battery innovators are eyeing next-generation chemistries that could address many policy-driven needs head-on. Two of the most talked-about contenders to “dethrone” lithium-ion are solid-state batteries and sodium-ion batteries​.

Solid-state batteries

Solid-state batteries are being touted as a major alternate battery tech contender. For one, solid-state cells are far safer – the solid electrolytes are non-flammable, so the main ignition source in current batteries is removed​. This is in addition to  higher energy densities of 20–50 percent more than Li-ion as well as other perks like excellent fast-charging capability.

Another potential point favoring Solid-state batteries is that they might be easier to recycle at scale. Their simpler construction – no separators soaked in electrolyte, fewer toxic binders – could streamline the recycling process​. Further, they tolerate higher temperatures and voltages without degradation. In nail penetration or crush tests that simulate accidents, a solid electrolyte is much less likely to combust. 

In a nutshell, solid-state tech ticks many boxes – ultra-safe, high-energy, long-life – making it extremely desirable for the future EV plans of companies from Volkswagen to Toyota. The solid-state batteries could feasibly meet even the strict “no fire, no explosion” mandates like China’s 2026 rule with relative ease. 

Sodium-ion batteries

On the other hand, sodium-ion batteries are a newer entrant gaining attention for their low cost and sustainable materials. Instead of lithium, the tech uses sodium – about 1,000 times more common in the Earth’s crust than lithium and can even be extracted from seawater cheaply. 

While being 30 percent cheaper than today’s lithium-ion LFP batteries at scale, the battery technology is also making strides in longevity. One developer recently demonstrated 6,000+ cycles with 80 percent capacity retention, which matches good lithium-ion cells.

From safety consideration, sodium ion battery tech is also considered to be a safe chemistry. Though not as distinguished as solid state batteries. 

These cells can be fully discharged to 0 volts for transport, eliminating the risk of fires during shipping​. They also run cooler and often use non-combustible electrolytes, which means they are far less prone to thermal runaway. Tests show Na-ion packs generate less heat internally and are significantly less likely to catch fire than a comparable Li-ion pack​.

Thus, each of these two battery techs offers pathways to address the very issues current policies are trying to solve. Solid-state can essentially solve safety concerns (and improve energy density for longer range), while sodium-ion can solve cost and resource concerns (using earth-abundant materials and potentially simplifying recycling due to the lack of exotic metals). 

It’s conceivable that in a future where standards demand ultra-safe, low-impact batteries, we might see multi-chemistry strategies for EV battery. For example, high-end long-range EVs running on solid-state cells, and mass-market or city EVs using sodium-ion packs where range is less critical but low cost and safety are key.

Shaping a Sustainable Battery Future

In the big picture, while stricter battery standards might add cost and complexity in the immediate term, they promise long-term stability and benefits. Enhanced safety standards reduce the risk of costly vehicle recalls or reputation-damaging incidents, like spontaneous EV fires making headlines. 

Standardized recycling and material recovery will mitigate raw material supply risks and price volatility in the 2030s by reclaiming valuable metals – a circular economy buffer against shortages. And clear regulatory benchmarks create a more level playing field. 

Further, the companies that adapt quickest – investing in safer battery tech, cleaner supply chains, and recycling – could build brand leadership. As a result, many in the industry view these shifts not just as compliance headaches, but as a catalyst for innovation and differentiation.