Giving End of Life EV Batteries a Second Life

• Recycling-first: These automakers comply with the law, satisfying their extended producer responsibility (recycling), but they don’t test out repurposing models.
• Joint ventures & partnerships: ESS is often a new line of business for automakers, so to make up for the knowledge and/or industrial capacity they lack, they may form partnerships with repurposers.
• Vertical integration: Some OEMs establish businesses primarily devoted to energy services or the aftermarket in an effort to retain as much value from the batteries as possible (e.g., Mercedes-Benz Energy, Volvo Energy).

OEMs often employ a combination of these strategies. Many of them think repurposing will never have a commercial justification, although no carmaker will publicly admit it. Despite several pilot projects and various cooperation models being investigated, the market is still not liquid. Dismantlers and insurance firms, which can handle the batteries from damaged automobiles on their own, make up a significant portion of the supply of second-life batteries.

Other stakeholders sometimes go unmentioned in press releases about new deployments, but they still play a significant role in the second-life sector. Their tasks are sometimes carried out by EV OEMs or repurposers:

• Logistics and transportation, e.g., Van Peperzeel, BatteriRetur;
• Battery testing, e.g., TÜV SÜD, SGS;
• Dismantling (pack to modules), e.g., TES-AMM, Sortbat;
• Consolidation of supply, e.g., Cling Systems.

The newest players in the market are those who integrate second-life energy storage technologies. They rarely come from the traditional energy storage industry, which is intriguing as they often begin as start-up ventures, learning about ESS design, integration, and deployment through initial pilots. The biggest challenge for repurposers is usually obtaining a supply of EV batteries, so their main collaborators are EV OEMs and dismantlers.

Different people use second-life energy storage. Most consumers who invest in battery recycling have prior knowledge of traditional battery energy storage technologies. Second-life initiatives have two distinct advantages over alternatives using brand-new batteries: a smaller negative environmental impact and lower cost. The following consumer types are the most common:

• Distribution system operators, energy utilities, and aggregators (including RWE, Enel, and Engie) are all interested in the ESS for grid services like frequency response and backup power supply.
• Industrial & commercial sector (ex. Umicore, Essity, TGN): These clients often have renewable energy systems like solar PV, wind turbines, hydropower, and charging stations for EVs and e-bikes built at their locations.
• Individual home owners and energy communities: These customers usually have solar panels on their roofs and search for an affordable ESS to increase self-consumption of renewable power (i.e., reduce their energy costs). The ESS is a crucial part of the microgrid that can replace a diesel generator in less common off-grid homes.

The table presents a list of selected previous deployments of 2nd life projects, with the names of involved stakeholders.

Source: Market intelligence report | Bax & Company

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