Electric vehicles (EVs) are becoming more popular every year thanks to their environmental benefits, lower maintenance costs, and tax credits. But what happens to the batteries that power these cars when they reach the end of their life span?
Most EV batteries have a warranty of eight to 10 years or about 100,000 miles. After that, they may lose up to 20% of their capacity, making them less efficient and reliable for driving. However, they are still useful. In fact, they still have about 70% of their original energy storage potential, which can be used for other purposes.
That is where the US government comes in. As part of its efforts to promote clean energy and reduce greenhouse gas emissions, the Biden administration has announced several incentives for recycling and reusing old electric vehicle batteries. These include:
- A $10 billion investment in battery manufacturing and innovation, as part of the American Jobs Plan
- A $7.5 billion grant program for installing EV charging stations across the country, which can also use second-life batteries as backup power sources
- A $6 billion tax credit for battery recycling facilities, which can recover valuable materials such as lithium, cobalt, nickel, and manganese from used batteries
- A $5 billion loan guarantee program for battery storage projects, which can use old batteries to store excess electricity from renewable sources such as solar and wind
These incentives are expected to create thousands of jobs, boost the domestic battery supply chain, and reduce the dependence on foreign imports of critical minerals. They will also help address the environmental and safety concerns associated with disposing of old batteries in landfills or incinerators, where they can leak toxic chemicals or catch fire.
The benefits of second-life batteries
According to a report by BloombergNEF, the global stockpile of retired EV batteries will reach 3.4 million by 2025 and 10 million by 2030. That equals about 200 gigawatt-hours (GWh) and 600 GWh of energy storage capacity. To put that in perspective, the world’s largest battery storage facility in California has a capacity of 1.2 GWh.
The potential market for second-life batteries is enormous, and several companies are already tapping into it. For example:
- Nissan, the maker of the Leaf EV, has partnered with Eaton, a power management company, to create xStorage. This system combines old EV batteries with solar panels to provide electricity for homes and businesses.
- GM, the maker of the Bolt EV, has teamed up with ABB, a technology company, to develop an energy storage system that uses old EV batteries to support the power grid during peak demand periods.
- Tesla, the leader in the EV market, has launched its own battery recycling program, which aims to recover up to 92% of the materials from its old batteries and use them to make new ones.
Giving a second life to batteries has many benefits for the environment and society. These include:
- Extending the useful life of batteries
- Reducing waste and environmental impact
- Promoting the transition to a more sustainable energy system
- Reducing the amount of waste and preventing the additional depletion of Earth’s minerals
- Minimizing total battery demand, resulting in a substantial reduction in the use of extracted chemical materials
- Providing the benefits of energy storage at a lower cost
- Improving power quality and reliability
- Deferring investments in transmission and distribution
- Increasing the value of renewable energy generation
- Ensuring access to power even when there are disruptions in the grid
The challenges of second-life batteries
Despite these benefits, some challenges need to be overcome before second-life batteries can become mainstream. These include:
- The lack of standardization and regulation for testing, grading, and certifying old batteries
- The high costs and complexity of collecting, sorting, transporting, and repurposing old batteries
- The uncertainty about the performance, safety, and warranty of second-life batteries
- The competition from new battery technologies that may offer higher efficiency and lower costs
To address these challenges, stakeholders need to work together to create a supportive ecosystem for second-life batteries. This may involve:
- Developing common standards and best practices for battery reuse
- Establishing transparent and traceable data platforms for battery information
- Creating business models and partnerships that enable value creation across the battery lifecycle
- Educating consumers and policymakers about the benefits and risks of second-life batteries
By doing so, we can unlock the full potential of second-life batteries and turn them into a gold mine for clean energy and a circular economy.
