EU Battery Passport Mandated by 2027, Chinese Lithium Battery Firms Rush to Meet Compliance Challenges

Under the EU’s new Battery Regulation, starting February 18, 2027, all electric vehicle traction batteries exported to the European Union must be equipped with a Digital Battery Passport. This passport, accessible via a QR code, will provide mandatory data across five key dimensions—including battery identification and traceability of critical mineral supply chains—enabling full lifecycle traceability. Europe is currently the largest export market for Chinese EV batteries, with exports continuing to grow steadily. With less than eight months remaining before the regulation becomes mandatory, Chinese companies now face multiple compliance requirements related to carbon footprint management, data disclosure, use of recycled materials, and supply chain transparency, significantly increasing their overall costs of going global. Regarding carbon footprint accounting, although leading domestic enterprises have already begun relevant initiatives, verification timelines have been affected by the lag in developing China’s domestic carbon emission factor database. In terms of data disclosure, some companies are participating in international pilot programs but still struggle with challenges around data anonymization and secure data sharing. To meet recycled material compliance requirements, several firms have proactively expanded battery recycling capacity and are building zero-carbon factories overseas. To address these challenges, industry leaders such as CATL and Sunwoda have adopted a dual-track strategy—participating in international standard pilots while simultaneously developing proprietary digital platforms—to embed compliance requirements early in their operations. Additionally, localized production overseas has emerged as a critical approach to alleviating compliance pressure, with relevant companies already establishing sizable manufacturing footprints in Europe to support data collection and validation needs for the Digital Battery Passport. Furthermore, driven by relevant government authorities, domestic battery and automotive companies are jointly piloting digital battery ID systems. Industry associations have also signed cooperation agreements to foster integrated development across the value chain. The sector is also calling for the establishment of a national-level coordination mechanism for green trade standards to accelerate alignment with international accounting rules.