Capacity-Constrained Pathways to Formal EV Battery Recycling in China

China’s retired electric vehicle (EV) battery recycling system faces rapidly increasing end-of-life supply, persistent formal–informal competition, and uncertainty over policy withdrawal. Existing models often equate strategy probabilities with formalization and overlook unreturned stocks, consumer channel choice, and processing capacity. This study develops a 2020–2050 system dynamics model linking a cohort–Weibull retirement module with material-conserving battery flows, channel allocation, capacity expansion, authorized integration, metal recovery, relative environmental burden, and adaptive policy withdrawal. All scenarios share a fixed 25% formal-processing share in 2025. Under current policy, the formal share reaches only 52.95% by 2050, while informal processing and unreturned stocks remain substantial. Among single pathways, subsidy plus capacity support accelerates early formalization, whereas enforcement achieves the highest nominal 2050 share (60.83%). Integration is conditional on licensed capacity: 108.50 GWh yr−1 is requested for transfer in 2050, but only 51.27 GWh yr−1 is realized. Fixed, life-cycle, and staged portfolios reach 68.32%, 65.77%, and 66.49%, respectively. Relative to the fixed portfolio, the adaptive portfolios reduce model-accounted government expenditure by 29.68% and 45.14%, with endpoint losses of 2.55 and 1.82 percentage points. Across 200 Latin-hypercube draws centered on the nominal settings, suppression is the leading single pathway in 97.5% of cases, while each portfolio exceeds the best single pathway in every draw. The results support sequential governance that combines early capacity building, persistent baseline enforcement, capacity-constrained integration, and gradual withdrawal after observable maturity conditions are met.