Once these batteries reach a capacity, or State of Health (SOH), that is too low to meet the EV's driving range requirements, they are retired. These batteries could be recycled to recover critical and valuable raw materials, which could then be reintroduced into the manufacture of new EV batteries. However, these batteries could also be reused for second-life applications before being recycled. This would maximize their value, extend their lifespan, and contribute to a circular economy for lithium-ion batteries. Key applications for second-life EV batteries could include less demanding stationary battery storage or lower-power electromobility applications, such as scooters or rickshaws.
activity of
20 reusers in Europe dominates the rest of the global market, resulting in an increasing volume of second-hand batteries for commercial and industrial (C&I) applications in the region. Second-life batteries for these applications could include optimizing self-consumption of renewable energy, reducing peak consumption, and charging electric vehicles. However, some key players in the US, such as B2U Storage Solutions, Smartville, Higher Wire, and BBB Industries/TERREPOWER, have also continued developing second-life battery technologies.
Used and remanufactured second-life batteries by headquarters. Source: IDTechEx
Reuse costs and competition with first-generation lithium-ion BESS
Although IDTechEx has observed steady growth in the second-life EV battery market in Europe and the US, the declining price of first-life lithium-ion battery energy storage systems (BESS) has made it increasingly difficult for reusers to market or offer their systems at competitive prices. EV batteries degrade throughout their first lifespan, so reused second-life battery storage technologies will inherently perform worse than first-life lithium-ion BESS. Therefore, second-life systems must be priced lower than first-life lithium-ion BESS. A key method for reducing reuse times, and thus costs, could be the use of faster and more advanced battery sorting technologies that, for example, could be used while the EV battery is still in the vehicle. IDTechEx's "Second-Life Batteries for Electric Vehicles 2025-2035: Markets, Forecasts, Players, and Technologies" analyzes the costs of reuse, including logistics, battery materials and components, and the reuse process itself, including battery testing, dismantling, and assembly. It also provides a cost sensitivity analysis and a discussion that identifies the main bottlenecks in overall reuse costs.
Future market outlook
The future of the second-life electric vehicle battery market will depend on numerous factors, including policies and regulations, battery technology and design trends, advanced battery testing technologies, and collaboration between automakers and recyclers. For example, cell-to-pack (CTP) electric vehicle battery designs, while beneficial for improving energy density, could increase the cost of dismantling procedures. Regarding policy, IDTechEx has observed a reasonable shift in terminology and recognition of battery reuse for second-life applications in the EU Battery Regulation. However, greater emphasis could still be placed on incentivizing stakeholders to reuse these batteries rather than prematurely recycling them.
However, there are promising factors, such as the emergence of business-to-business (B2B) battery markets and the adoption of advanced end-of-life battery testing technologies, that could accelerate the acquisition and reuse of retired EV batteries, respectively. These factors could therefore help reusers expand their businesses and contribute to the growth of the second-life EV battery market. Ultimately, however, the availability of retired EV batteries will need to increase in key regions so that original equipment manufacturers (OEMs) can supply these batteries in larger volumes at lower costs to reusers.
Author: Conrad Nichols, Senior Technology Analyst at IDTechEx
