Working with automotive manufacturers to find a second life use for EV batteries

What will automotive OEM's do with the batteries at the end of these vehicles’ lives?

As EV adoption has gathered pace, the number of EV batteries in the world has rapidly increased. But what will automotive OEM’s do with the batteries at the end of these vehicles’ lives?

Alex Charr, Chief Operating Officer at Connected Energy, explains how they can be monetised in second life energy storage applications.

Why are these batteries still useful?

An EV relies on its batteries for range, but when batteries degrade past a certain point, they can become less useful in a vehicle. Most vehicle manufacturers will replace their batteries when they still have 80% of their capacity remaining. So, at that point they have the options to dispose, recycle or reuse them. To me the choice is obvious.

That remaining capacity is perfectly suited to the less demanding applications of stationary energy storage. As we move to a world powered by renewable sources, which are often intermittent by nature, battery energy storage is going to play an increasingly important role in the energy mix. Storing green energy when it’s in abundance and releasing it when it’s not.

By aggregating multiple batteries and re-purposing them as an energy store, we’ve found the perfect solution to extend their lives, minimising the environmental impact of battery production and turning them into an asset rather than a problem that needs to be solved.

Why has finding a second life suddenly become so important?

It’s taken a little bit of time to get to this point. Until recently, the day-to-day focus for OEMs was on delivering the vehicles and looking at developing the second generation using better batteries. Second life was not a top priority for OEMs as they knew that the vehicle's end of life was years away.

More recently as the first generation of vehicles began to reach their end of life, we started to see much stronger engagement with companies as they started to see batteries from end-of-life EVs become available. No one wants to end up with warehouses full of batteries that become a liability when they could be a vital resource.

The clock is ticking already. By 2030 global management consultancy McKinsey and Co estimate that the second life lithium-ion battery supply could surpass 200 gigawatt-hours per year. So, you can see that this is going to present a real challenge for the industry. They also forecast that this volume will surpass the market size of utility-scale battery energy storage by 2030 – so a second life use case as battery energy storage is an obvious solution.

It is important that all OEM’s start engaging with second life experts like Connected Energy now, to explore the best options for second life applications. In this way, we all benefit – the auto industry, the fleet operator, the energy consumer and ultimately the planet.

Which OEM’s are looking at second life applications?

Renault was the pioneer in this space – driven by two major elements – the fact that they were so early to market but also in part by their unique business model. Initially, the manufacturer leased most of the batteries for its EVs, so as a consumer, if you bought a Zoe or a Kangoo, you were buying the vehicle but leasing the battery from Renault.

As these batteries reached the end of their life in a vehicle, these batteries were returned directly to Renault – and the manufacturer had the foresight to view these as assets. The company put in place a strategy to address the continued use of their batteries with the vision to reduce a battery’s carbon footprint and reuse them to play a pivotal role in the step towards a net zero carbon energy system.

Other OEM’s are now starting to look very seriously at second life. Volvo Energy, for example, has recently announced its ambition to jointly develop second life systems with our company. They are driven by creating a circular business model for their batteries. And this will become more pressing for all OEMs as new EU legislation puts greater responsibility on them to ensure that batteries are dealt with responsibly at vehicle end of life. Presently recycling is quite expensive, so flipping that by monetising those batteries in second life applications is becoming more and more attractive.

How will former EV batteries find their way into second life?

This is where the power of partnerships comes in. Connected Energy has built up strong relationships with many OEM’s over time, and continues to do so, opening the door to conversations about the possibilities of reusing vehicle batteries.

But it is still challenging and more needs to be done to track EV batteries through their life. To make this work, companies like ours need to have access to accurate data on battery health throughout the vehicle’s period of service. But once a passenger car or van leaves the forecourt, it could go anywhere – many will make it into the second-hand market and then what?

What is needed is organisations that act as the filter at end of life. They would aggregate the batteries, test and grade them. The ones which are no good can go to recycling and the rest can go into second life applications. We need that framework in place, an operational model that makes it easy to gather and grade those batteries to create a robust supply chain for second life pioneers like us.

What more needs to happen?

A major step forward will be the introduction of battery passports which will come into play in 2027. Battery passports will provide companies like ours with more transparent information on battery composition, performance and health throughout its life and at the end of life.

But if we are serious about the circular economy then there should also be government financial incentives or tax credits to nudge people towards buying second life energy storage systems instead of first life systems.

Second life energy storage is an early-stage technology and needs some support to kickstart the market. This is where governments need to come in. It’s happened before in the early stages of the wind and solar industries – with incentives that helped make the technology financially viable. This needs to happen again, with governments reducing the financial risk and thereby making second life more attractive.

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