A second life for electric vehicle batteries? Depends on the length of the initial 2023

Global manufacturers intend to reuse electric vehicle (EV) batteries as they lose power, but competition for battery packs and cell resources and the demand for inexpensive automobiles put doubt on this circular economy initiative.

Many firms recycle EV batteries for energy storage.

However, carmakers like Nissan (7201.T) must compete with recyclers, refurbishers, and cost-of-living-strapped drivers to create a sustainable sector.

“The assumption that EV batteries are only going to last eight-to-10 years and then owners will swap them out is just not true,” said Hans Eric Melin, founder of consultancy Circular Energy Storage (CES), which studies battery volumes and costs. “It’s going to be tricky to make second-life work.”

Buses, lorries, and other commercial vehicles might utilize passenger car batteries, but it will take longer.

Second-life energy storage is straightforward.

After eight to 10 years of usage, EV batteries’ capacity will drop below 80%-85%, allowing them to power buildings or balance local and national energy grids.

According to Reuters, investors in the circular economy—where items and materials are mended and reused—have given roughly 50 firms $1 billion.

Mercedes (MBGn.DE) and Nissan also have second-life activities.

The scarcity of used EV batteries persists.

Double New

According to S&P Global Mobility, the average age of fossil-fuel cars on the road has reached a record 12.5 years in the U.S., suggesting many EVs will continue to drive long after their batteries die.

“The 80% threshold is an arbitrary number that does not reflect real-life usage of EVs,” CES’ Melin stated.

Elmar Zimmerling, business development manager for automotive at German second-life battery company Fenecon, said there was “as good as no market for second-life batteries” because EVs from a decade ago are still in use. He anticipates a “tsunami” of batteries in five years.

CES said that in late 2022, EV battery prices reached $235 per kilowatt hour, quadruple the amount major carmakers pay for new batteries.

Long-range Tesla Model 3s have 75KWh batteries. That would make it $17,625 utilized.

Tesla (TSLA.O), AMTE Power (AMTE.L), and even Croatian electric sports car producer Rimac are offering energy storage systems with new batteries.

Recycling competes with re-use since cell materials are in high demand.

“The fundamental question is, if you have relatively valuable raw materials in a battery and ask ‘how can I get the most out of it?’ “Recycling may be better,” said BMW (BMWG.DE) sustainability chief Thomas Becker, whose Leipzig factory features a second-life battery storage facility.

Demand surge

Intermittent renewable energy will increase demand for old batteries for storage.

The Paris-based International Energy Agency predicts 680 gigawatt-hours of grid storage battery capacity by 2030, up from 16GWh in 2021.

Due to the battery shortfall, Britain pays roughly 1 billion pounds ($1.27 billion) yearly to shut off wind farms when the grid does not require the electricity. When short on electricity, it regularly buys from Europe.

U.S. firm Smartville buys packs from insurer-written-off EVs. EVs with almost 100% battery capacity have been abandoned because they cannot estimate the degree and expense of even small damage.

By 2026, CEO Antoni Tong expects over 1 GWh of recovered batteries in the U.S.

Because refurbishers and international customers outbid it at Tesla battery salvage auctions, the business was seeking to deal directly with insurance.

Vehicle retention is the largest challenge. Coeur d’Alene’s Jonathan Rivera highlights the problem.

He acquired a $3,750 2011 Nissan Leaf in September.

After 12 years, the electric car’s range was 40 miles (64 km) from 120 miles.

Rivera commuted 18 kilometers to work without a heater in the cold.

He sold the car for $3,000 to pay off credit cards but wants another secondhand EV.

“That car handled 90% of my driving needs,” Rivera remarked. “If treated right, it should last another five, six years.”

Vanishing into nature

20% of UK automobiles disappear when their owners sell them, and many are sold abroad.

“A Nissan Leaf that’s been in the wild for 10 years—there’s very limited visibility into where even is that battery?” remarked Mobility Impact Partners partner Asad Hussain. “How do you get it back?”

Industry insiders said commercial cars provide the best promise for second-life batteries.

London company Zenobe works with electric bus providers. Zenobe monitors the battery and takes it for second-life energy storage after buying the buses.

Zenobe raised $1.2 billion in financing and stock since 2017. By 2025, it will possess 3,000 electric buses with 435 megawatt-hours of batteries in the UK, Australia, and New Zealand.

Founder Director Steven Meersman stated Britain’s 40,000 electric buses will have 16 gigawatt-hours of batteries—one third of Britain’s peak consumption in 2022.

“That’s a gigafactory on wheels waiting to happen,” he added.