Abstract: With the rapid development of the electric vehicle industry, the large-scale retirement of power batteries has attracted widespread attention. Failure to effectively handle these retired batteries may lead to serious environmental pollution and resource waste. Cascade utilization technology can maximize the full life cycle value of batteries and greatly alleviate the environmental pressure caused by battery recycling. Against the background of the national “30·60 Carbon Peak-Carbon Neutrality” strategy, promoting the development of battery cascade utilization technology is of great significance. Starting with the aging mechanism of batteries, the problems of capacity decay and increased internal resistance caused by anode and cathode aging are analyzed. Secondly, the methods for handling retired batteries are introduced, with a focus on a comprehensive review of retired battery sorting and recombination clustering methods, clarifying their advantages, disadvantages, applicability, and evaluation criteria. Finally, addressing issues such as incomplete standards for battery cascade utilization and low commercialization of the industrial chain system, corresponding countermeasures and suggestions are proposed.