Investigation into the chaos of old new energy vehicles privately modifying range to "extend life": the urgent need of commercial vehicles fuels the gray market, with triple barriers trapping automakers from official upgrades

Every reporter｜Sun Tongtong Every editor｜Yu Tingting

“After driving a ride-hailing car for 5 years, the range has dropped from 300 kilometers to 140 kilometers; it’s even worse in winter, I can’t complete three rides with the air conditioning on before needing to recharge. Replacing the original factory battery costs over 50,000 yuan, which is higher than the current residual value of the whole car; selling it as a second-hand car, dealers only offer 30,000 yuan, which doesn’t even cover the principal.” In a ride-hailing parking lot in Tongzhou, Beijing, driver Mr. Li pointed to the “external battery” installed in his car’s trunk, looking both helpless and anxious.

This is not an isolated case. Currently, the number of new energy vehicles in China has surpassed 43 million, and the first batch of ride-hailing and taxi operation vehicles, which were deployed on a large scale, are entering a period of significant battery degradation. On one side, there is the plight of depreciating second-hand car values and high replacement costs, while on the other, there is the rigid demand for drivers to earn a living. Many car owners take risks and choose to privately install power batteries or range extenders to “extend the life” of their vehicles.

This real pain point has directly given rise to a large-scale illegal modification gray market—online, short videos and social platforms attract customers, while offline, modification workshops undertake the work. A hidden service chain has formed, covering everything from parts supply to after-sales maintenance, becoming a blind spot that is difficult for regulators to reach.

“This type of illegal modification problem has long existed, and the root cause lies in the early development of new energy vehicles. When automakers were developing and producing them, they basically did not consider the residual value of second-hand cars and the subsequent battery degradation problem. As things develop, they always progress from immature technology to maturity, but in this process, the difficulties of car owners have been overlooked.” On March 26, Wang Zidong, a senior expert in the power battery industry, bluntly pointed out the industry’s core issue in an interview with the “Daily Economic News.”

“Battery matching must undergo strict testing and calibration before use; unauthorized modifications cannot possibly complete these processes and will inevitably pose severe safety risks.” Wang Zidong repeatedly emphasized that he absolutely does not advise users to personally install batteries or range extenders, and that to solve the problem from the source, manufacturers need to improve battery quality and slow down degradation, while also paying attention to building a residual value system for second-hand new energy vehicles.

The pressing need under the “loss of warranty tide”: the helpless choice of car owners

By 2026, the first batch of operational electric vehicles in China will officially face a large-scale “loss of warranty tide.” For drivers who rely on their cars for a living, the most heartbreaking reality is that “the car can still run, but the battery is about to retire.”

Image source: Daily Economic News media library

Data reports indicate that under high-intensity usage, the battery degradation rate of operational vehicles far exceeds that of household vehicles—household vehicles typically run 10,000 to 20,000 kilometers a year, with a degradation of about 10% to 15% over 6 years; whereas ride-hailing and delivery vehicles can run 80,000 to 100,000 kilometers a year, and the degradation could reach 30% to 40% in just 3 to 4 years. Some vehicles’ battery health may even drop below 60%, making “cliff-like reductions” in range a norm.

What exacerbates the dilemma for these car owners is that most automakers’ battery warranty policies clearly exclude operational vehicles. After losing warranty, replacing the original factory battery can cost upwards of 50,000 to 60,000 yuan, even exceeding the residual value of the vehicle itself; while replacing a new car, considering various costs, requires at least tens of thousands of yuan, which is undoubtedly an unbearable expense for drivers who rely on cash flow for profit.

“Installing additional batteries has become the only way out.” A supplier of new energy vehicle battery modules revealed to reporters that their installation business now covers the entire country, with operational vehicle users accounting for over 80%. “The price per kilowatt-hour is about 800 yuan, starting with a minimum of 20 kilowatt-hours, totaling at least 16,000 yuan, which is much cheaper than replacing the battery or buying a new car. Operational vehicles are the bread and butter of drivers; frequent recharging delays order acceptance, so extending range is a necessity. Many operational vehicle companies even come to us for bulk modifications.”

The supplier admitted that this business was indeed unstandardized and unregulated in previous years, lacking warranties and safety inspections. However, as the number of uninsured vehicles increases, market demand has surged, “Now we are also moving towards standardization and providing warranties.” According to this supplier, while the market scale of the installation business is not as large as that of mass-produced automakers, customized installations for operational vehicles have already formed stable revenue, “There’s no need to pursue large-scale production; as long as we accurately meet operational demands, we can survive, and demand is also slowly growing.”

Industry data shows that the demand for modifications in new energy vehicles has become an important growth driver in the overall modification market, accounting for about 35% of the total market size, with a high proportion of illegal modifications, most of which are concentrated in the operational vehicle sector.

According to the “Road Traffic Safety Law of the People’s Republic of China,” unauthorized modifications to vehicle power structures and electrical systems are clearly illegal modifications. Not only can these vehicles not pass the specialized annual inspections for new energy vehicles, but they also face penalties such as warnings, fines, and orders to restore to their original state. More critically, once an accident occurs, insurance companies can directly refuse to pay, and all losses must be borne by the car owner themselves. However, in the face of the pressing need to “survive,” many car owners and modification businesses choose to ignore this red line.

Deadly hazards accompany: the “compliance” that is deceived, hidden “mobile bombs” in the trunk

“The batteries we install are all brand new, high-quality cells, and they are insured by PICC (People’s Insurance Company of China), so they are definitely compliant; otherwise, the insurance company wouldn’t cover them.” In response to reporters’ questions about illegal modifications, the aforementioned battery supplier spoke firmly, “Although regulations do not allow unauthorized modifications, users have real needs, and as long as there is insurance to back them up, that’s enough for them.”

However, upon further inquiry, it was found that this is just the seller’s “marketing talk.” The PICC insurance only covers the battery cell products themselves, not the modification behavior or the modified vehicle. If a vehicle fails or an accident occurs due to modifications, whether to pay for damages will still depend on the insurance company for the vehicle itself, and such claims are often directly denied.

“As long as there are any modifications to the electrical system, regardless of whether the original circuit is altered, problems will likely lead to denial of coverage.” A senior auto insurance salesperson with 8 years of experience told reporters that they have handled similar cases before, “A car owner privately installed a range extender and then caught fire; after the insurance company’s investigation, they found it was due to illegal modifications and directly refused to pay. The car owner not only had to bear the loss of the burned vehicle but also compensate for surrounding property damage.”

Even more frightening are the safety hazards posed by illegal modifications, which go beyond mere “denial of coverage.” Several battery experts and vehicle developers interviewed by reporters generally indicated that unauthorized installations of batteries and range extenders pose three deadly risks, essentially acting as “mobile bombs.” This is also a key point that regulatory agencies have repeatedly warned about.

The first risk is a significant increase in thermal runaway. Modified batteries lack the factory thermal management systems and protective structures, often using non-standard parts, which greatly diminish their heat dissipation and pressure resistance capabilities. Moreover, the fuel tanks of range extenders are often carelessly placed in the trunk’s collision energy-absorbing zone. In the event of a rear-end collision, fuel leakage and electrical short circuits can easily occur, potentially leading to fires. In January 2025, a privately modified electric vehicle in Jinan, Shandong, caught fire due to a short circuit, destroying 17 motorcycles and several cars, resulting in severe property damage.

The second risk is disruption of the electronic control system. Non-standard equipment can interfere with the factory BMS (Battery Management System) normal logic, leading to issues such as overcharging, over-discharging, and voltage fluctuations, which can easily cause battery cell swelling, further triggering thermal runaway. More critically, such illegal modifications lack professional technical calibration and have no risk prevention measures, essentially equivalent to “naked running” on the road.

The third risk is damage to the vehicle structure. Additional installed batteries and range extenders increase the vehicle’s load, disrupting the original chassis tuning and weight balance, significantly reducing braking and handling stability, thereby greatly increasing the risk of traffic accidents. Additionally, the illegal modification market is rife with counterfeit and inferior parts, most core components having not undergone compliance testing, resulting in varying quality. Coupled with the fact that modification workshops often lack professional qualifications and have non-standard operating procedures, safety risks are further amplified.

In the face of these hazards, the aforementioned supplier has a different viewpoint: “An external battery is just like adding a ‘power bank’ to the vehicle; it doesn’t change the original three electrical systems. As long as the protocol matching is done properly and the high-voltage cables are connected in parallel, there will be no safety issues.” However, when asked about the risk of rear-end collisions leading to fires due to the batteries installed in the trunk, he also had to admit, “There are indeed certain risks.”

The dilemma of breaking the deadlock: automakers are unwilling to engage, policies are gaining momentum, when will the gray market retreat?

On one side is the pressing need of car owners, and on the other is the deadly safety hazards. Why haven’t automakers launched official battery installation kits to provide compliant solutions for car owners? Several industry insiders analyzed for reporters that the core lies in three difficult-to-overcome constraints.

The first is the high barriers of compliance and cost. Adding batteries or range extenders to older models requires redoing crash tests, calibrating the electronic control system, and applying for vehicle announcements, with R&D investments for a single model exceeding tens of millions; furthermore, modified vehicles can hardly meet current safety and environmental standards, making them far less cost-effective than launching new cars.

The second is that the warranty and recycling systems are difficult to sustain. Modifications would completely disrupt the original factory warranty rules, making it extremely challenging to define responsibilities once quality issues arise. Coupled with the high costs of recycling and disposing of old batteries, companies have virtually no profit margins, naturally leading them to avoid involvement.

The third is a conflict with the product iteration logic of automakers. The core business model of automakers is new car sales, and official installations would reduce old car owners’ willingness to trade in, conflicting with the direction of upgrading the new energy vehicle industry. “With new products being released three times a year, with constantly updating technologies and experiences, there’s no need to spend energy on ‘patching up’ old cars.” A marketing system manager from a well-known new energy vehicle company bluntly stated that now the state strongly advocates “trading in old for new,” and the cost of replacement has significantly decreased compared to before, making unauthorized modifications of old vehicles risky and unviable.

This manager believes that the current demand for range extension installations is merely a “transitional phase” in the industry’s development. With advancements in battery technology and continuous improvement of charging infrastructure, the anxiety about new energy vehicle range will no longer be a long-term pain point for users, and the demand for illegal modifications will subsequently decrease.

It is noteworthy that 2026 is referred to as the “compliance year” for China’s automotive modification market. The General Office of the State Council has listed automotive modification as a key emerging field for cultivation, and graded and classified management policies and standards are gradually being implemented, delineating a transparent path for the modification industry.

Simultaneously, new policy regulations are also gradually addressing the core dilemmas faced by car owners. After the implementation of new policies regarding the recycling and utilization of new energy vehicle power batteries, third-party formal institutions will be allowed to participate in battery maintenance, replacement, and remanufacturing. The prices of remanufactured batteries are expected to drop significantly, and there will be formal warranties.

Many industry experts believe that as the battery recycling system is gradually improved, official battery replacement services become widespread, the circulation mechanism for second-hand new energy vehicles is established, and operational vehicles are naturally phased out, the gray market for illegally extending range will gradually shrink. As the regulation of the automotive modification industry accelerates, the increasing supply of compliant modification services will further squeeze the survival space of illegal modifications, pushing the industry toward safety, compliance, and order.

However, in the gap between policy implementation and industry iteration, those illegal modified vehicles still “naked running” on the road are constant “mobile bombs.” How to accelerate the breaking of the deadlock, both addressing the survival dilemmas of operational car owners and maintaining public safety, remains an urgent issue to be resolved.