Electric vehicle batteries may be seen to last up to 70 or 80% of their capacity or state of health and are then most commonly subject to becoming recycled. IDTechEx’s latest report, “Second-life Electric Vehicle Batteries 2025-2035: Markets, Forecasts, Players, and Technologies”, explores other options for these batteries, including repurposing and first-life extensions.
Applications for second-life battery repurposing
At the end of a battery’s first life in an electric vehicle, recycling processes may see critical raw materials such as lithium, cobalt, and nickel reclaimed by OEMs. However, the already somewhat established relationship between recyclers and manufacturers may prove tricky for repurposing companies to interrupt.
Automotive and battery OEMs are responsible for collecting retired batteries, which is where the second-life battery value chain begins. The batteries are then tested to determine their performance quality and then passed on to repurposers. Repurposed applications could include lower-power electronics, second-life stationary energy storage for optimization of renewable self-consumption, or first-life extensions in electric vehicles. IDTechEx finds that within Europe and the US, second-life storage technologies are mostly employed by commercial and industrial customers, used for mobile uninterrupted power supply (UPS) for festivals or commercial events, construction sites, and EV charging, as well as for optimizing self-consumption of renewables.
In rarer cases, remanufacturers or recyclers may disassemble EV batteries down to module or cell level in order to ship parts back to automotive OEMs. They are then responsible for replacing the necessary parts in order for the batteries to extend their lives. Some recyclers may also pass reassembled cells onto lower-power electronic applications such as electric scooters or rickshaws.
The global second-life battery market
Despite China seeing some of the most active repurposing activity, Germany, the UK, Belgium, and Switzerland are home to 20 of Europe’s repurposers, followed by 5 in the US and 1 in South Africa. IDTechEx predicts that most second-life batteries in China are used for either UPS applications or backup power applications for telecom towers. IDTechEx also reports that GWh scale deployments are already being seen for these batteries in China.
Incentivizing battery repurposing can prove tricky, as with most global regulations leaning in favor of recycling processes, there is not enough in place for governments to push for second-life battery opportunities. With the EU’s key targets for 2031 and 2036 being for batteries to have a minimum recycled content of certain amounts of critical materials, OEMs are likely to begin making agreements with recyclers to ensure they meet these requirements.
Extending the life and value of batteries, alongside delaying the recycling process, will help to reduce CO2 per kWh emitted throughout their lifetimes, though according to IDTechEx, this benefit is not currently acknowledged across the policy landscape.
Competitive costs
Costs and deployments of new Li-ion battery energy storage systems (BESS) will also affect the uptake of second-life batteries. Global deployments of these systems saw a quadruple increase from 2021 to 2023, from 23.1GWh to 92.3GWh, while prices of first-life Li-ion BESS appear to be decreasing. This provides tough competition for second-life battery storage technologies, as with a lack of price incentives, their uptake may be more difficult. Despite steady second-life EV battery market growth seen over 2023 and 2024, they will not offer the same performance as first-life alternatives because of natural degradation, and in order for these systems to be competitive, costs will need to be lowered, providing another challenge for repurposing companies.
IDTechEx provides further details on cost information and barriers within their reports, alongside potential incentives for repurposers and OEMs to work together. Funding, partnerships, projects, and activity from OEMs are also all included.
