Electric vehicles maintain the fastest development speed in China and undertake the responsibility of optimizing energy consumption and carbon emission in China’s transportation field. However, from the perspective of full life cycle, although electric vehicles have a certain degree of energy conservation and emission reduction benefits in using sector, they will generate extra energy consumption and carbon emission in manufacturing sector, which weakens the due environmental benefits to some extent. The recycling of electric vehicles can effectively address the issue and indirectly reduce the carbon emission in manufacturing sector. Various countries in the world have introduced regulations and policies to ensure the sound development of recycling industry. China is also setting up the electric vehicle recycling system and strengthening supervision force to achieve the proper energy conservation and emission reduction benefits of electric vehicles. This paper analyzes the technological development of EV recycling in China, benefits of energy conservation and emission reduction, and policies and regulations. It highlights the features and development directions of China in establishing EV recycling technologies and institutions by contrast with the developed countries such as Europe, US and Japan. Precisely speaking, according to the current development of EV recycling technologies, China can reduce about 34% of carbon emission in EV manufacturing segment by appropriate recycling mode and rational utilization of renewable resources, especially traction battery recycling which has extremely enormous development potential.Taking NMC lithium ion battery as an example, about 40% of carbon emission in manufacturing segment can be reduced by adopting appropriate recovery modes. With the rapid development of battery recycling technologies, the proportion will continue to rise. If China would like to sufficiently obtain environmental benefits, recycling enterprises should be dedicated to adopting the advanced recycling technologies and government should set up reasonable market order and adopt feasible supervision measures. China has realized the significance currently and follows the examples of Europe and US to set up the extended producer responsibility recycling system. Due to late start of China, benefits have not been reflected yet.