Second-life EV batteries

To promote the development of a more sustainable society, the European Union and other government agencies have set targets to drastically decrease greenhouse gas emissions by 2030. With the rapid growth of the automobile industry and the continuous improvement of people’s living standards, car ownership and sales continue to rise, which brings a series of energy and environment problems. Such a significant complexity is based on the behaviour of electrochemical batteries, with particular reference to lead-acid batteries, as well as the main issues related to different driving styles.

Second-life EV batteries
Second-life EV batteries

The residual range (RR) estimate is inherently a two-stage process. The shift of electric vehicles into mainstream use has already disrupted the automotive value chain in significant ways. It is now on the verge of disrupting the energy-storage value chain, as well. The need to dispose of millions of EV batteries in the future has already led to the emergence of new recycling and reuse industries, creating new value pools with further potential to harness and integrate renewable power into our grids. While these industries face the stiff challenge of being on the cutting edge of market creation, corporations and their regulatory bodies can take action to position themselves to capture the value that second-life batteries promise. They just need to look ahead.

Energy Storage Second Life
Energy Storage Second Life

With continued global growth of electric vehicles (EV), a new opportunity for the power sector is emerging: stationary storage powered by used EV batteries, which could exceed 200 gigawatt-hours by 2030. During the next few decades, the active uptake of electric vehicles (EVs) will result in the availability of terawatt-hours of batteries that no longer meet the required specifications for usage in an EV. To put this in perspective, nations like the United States use a few terawatts of electricity storage over a full year, so this is a lot of energy-storage potentials. Finding applications for these still-useful batteries can create significant value and ultimately even help bring down the cost of storage to enable further renewable-power integration into our grids.

First, the residual battery energy is to be estimated. The residual range estimates come from the combination of the remaining battery energy estimate and some estimate of the vehicle efficiency, i.e., the distance covered per battery kilowatt-hour.  In an example of the proverbial glass is both half empty and half full, electric vehicles have, for the most part, suffered from sub-par resale values. That’s bad for an original owner who’s saddled with higher ownership costs due to the more rapid rate of depreciation. Still, it’s suitable for anyone who’s in the market for an affordable used EV.   A battery second use market is a business ecosystem that enables electric vehicle batteries to be used in a secondary application.

Second-life EV storage battery properties
Second-life EV storage battery properties

According to KBB, models having operating ranges of over 200 miles are holding their values the best in the resale market. The Bolt EV is rated at 238 miles, with the I-Pace at 234 miles and the -Tron promising 248 miles. This effectively nixes the so-called range anxiety that tends to plague owners of older EVs that could only muster 100 or fewer miles per charge. We can probably expect the same from just-introduced longer-range models, including the Hyundai Kona Electric (258 miles), the Kia Niro EV (239 miles), and the Nissan Leaf Plus (226 miles).  A battery second use (B2U) ecosystem is a collection of stakeholders that co-evolve around the value chain of bringing used batteries from an electric vehicle into a secondary system. The maximum potential and limitations of the battery second use ecosystem are determined by the design and architecture of the vehicle battery system.

As the automotive original equipment manufacturers (OEMs) are responsible for the vehicle battery pack, they are currently the most critical player in the development of such an ecosystem. The OEM must find value in participating in a battery second use ecosystem and develop a B2U strategy that complements its unique EV strategy, thereby enabling a B2U market “EV We are currently seeing the Chevrolet Bolt hold its value at auction much better than other EVs with shorter range,” says Eric Ibara, KBB’s director of residual values. “We think range could be an important factor in determining an EV’s residual value.”This is why Tesla, with a three-vehicle lineup that boasts the most miles per charge among all current EVs, boasts excellent resale values. The top EV in this regard is Tesla’s Model 3, which is expected to retain 64.3% of its original worth after three years. That’s within striking distance of the model KBB cites as having the best three-year trade-in value among all vehicles, the Toyota Tacoma pickup truck at 69.4%. The average of all vehicles currently stands at 51.7% after 36 months.

Second Life Lithium-Ion Battery Supply
Second Life Lithium-Ion Battery Supply

The knowledge of the extracted charge and electrolyte temperature is sufficient to calculate the residual battery charge, the cost that can be delivered by the battery up to complete discharge, at a constant current.

However, the following questions have to be solved.  Reuse can provide the most value in markets where there is demand for batteries for stationary energy-storage applications that require less-frequent battery cycling (for example, 100 to 300 cycles per year). Based on cycling requirements, three applications are most suitable for second-life EV batteries: providing reserve energy capacity to maintain a utility’s power reliability at lower cost by displacing more expensive and less efficient assets (for instance, old combined-cycle gas turbines), deferring transmission and distribution investments, and taking advantage of power-arbitrage opportunities by storing renewable power for use during periods of scarcity, thus providing greater grid flexibility and firming to the grid.

In 2025, second-life batteries maybe 30 to 70 percent less expensive1 than new ones in these applications, tying up significantly less capital per cycle.

  1. The battery current in a real vehicle is far from being constant
  2. The future is obviously unknown and, therefore, the current that will be requested from the battery from the time is up to the discharge is not known and therefore has to be forecast.

The viability of a battery second use ecosystem is dependent on the following:

  1. Electric vehicle batteries capable of being mechanically and electrically integrated into a secondary storage system in a safe and cost-efficient manner.
  2. The infrastructure to support the process of removing the batteries from the vehicle, inspecting the systems for suitability for a second use, integrating the cells into a new system, bringing that system to market, and supporting the new system during its lifetime.
  3. Batteries with performance characteristics that allow used batteries to be economically favourable or competitive to new cells over a system’s lifetime for a given application. However, to unlock this new pool of battery supply, several challenges in repurposing EV batteries must be overcome. The first is a large number of battery-pack designs on the market that vary in size, electrode chemistry, and format (cylindrical, prismatic, and pouch).

Each battery is designed by the battery manufacturer and automotive OEM to be best suited to a given EV model, which increases refurbishing complexity due to a lack of standardization and fragmentation of volume. Up to 250 new EV models will exist by 2025, featuring batteries from more than 15 manufacturers.

Second-life EV storage battery properties for end customer
Second-life EV storage battery properties for the end customer

The second challenge involves falling costs for new batteries. As new cells become cheaper, the cost differential between used and new diminishes, given that the rate of decline in remanufacturing cost is expected to lag the rate of decrease in original manufacturing cost. We estimate that, at current learning rates, the 30 to 70 percent cost advantage that second-life batteries are likely to demonstrate in the mid-2020s could drop to around 25 percent by 2040. This cost gap needs to remain sufficiently large to warrant the performance limitations of second-life batteries relative to new alternatives.

The first step in repurposing a used EV battery is getting the battery out of the vehicle. The state of health of the battery when it is removed from the car is an important influence factor. This determines the performance characteristics of the pack and, therefore, the potential value that can be obtained. A battery can be returned, or reclaimed, for a variety of reasons including a battery exchange or upgrade, replace of a leased vehicle, warranty claim, or is returned at the end of the vehicle’s operational life. Each return scenario will affect the performance of the battery, volume of available packs, and timeline for battery availability.

Secondary Life Battery Testing
Secondary Life Battery Testing

System integration takes the repurposed base unit and connects them in series and/or parallel to achieve the required electrical properties for a given application. The application size will determine the number of base battery units required, and the system architecture will determine the configuration. Small energy storage systems will most likely need the equivalent of one pack or less of modules/cells; medium orders will require more than one pack worth of modules/cells connected in series or parallel, and large systems will require multiple packages worth of modules/cells connected in series and parallel.  Systems designed to maximize the battery life would probably be oversized so that the operating window could be reduced without sacrificing performance.

The amount of oversize will depend on the load profile, lifetime requirements, and aged properties of the cells. There is also a practical limit to which the system can be oversized and still be acceptable to the customer. In this case, the customer might own both the energy storage system, and batteries and performance would be guaranteed through a warranty agreement.

EV batteries have a tough life. Subjected to extreme operating temperatures, hundreds of partial cycles a year, and changing discharge rates, lithium-ion batteries in EV applications degrade strongly during the first five years of operation and are designed for approximately a decade of useful life in most cases. Yet, these batteries can live a second life, even when they no longer meet EV performance standards, which typically include maintaining 80 percent of total usable capacity and achieving a resting self-discharge rate of only about 5 percent over 24 hours. After remanufacturing, such batteries are still able to perform sufficiently to serve less-demanding applications, such as stationary energy-storage services.

Second Life battery cost and revenue analysis
Second Life battery cost and revenue analysis

To remain competitive in the face of falling costs for new lithium-ion batteries, companies can industrialize and scale remanufacturing processes to reduce costs and thus maintain the value gap between new and used batteries. Regarding the lack of standards, a variety of global agencies and private-sector coalitions consisting of OEMs and second-life-battery companies are already working on industry-wide second-life-battery safety standards.

These standards would necessarily classify batteries based on their performance potential and classify storage applications based on their performance needs to create transparency into product supply and market demand. Given the dynamic nature of the EV-battery industry and the relentless focus on design, manufacturing, and performance breakthroughs, establishing a body to regularly review and refine battery standards and report annually on average cost and operating benchmarks could further catalyze growth in battery deployment.

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