Batteries like all our electronic gadgets are susceptible to wear and tear and aging, with their life span depending on chemistry and how the batteries are used. In electric vehicles, batteries are put under significant stress because of the speed at which those batteries are charged and discharged, not to mention the weather extremes they are expected to endure. The consensus is that EV battery capacity will decrease by about 25% after 300,000km (although Tesla believes it will be lower), at which time the batteries/automobile will need to be replaced. Many commentators have thus suggested that this means that the carbon emissions advantages of EVs versus conventional ICE powered cars are not as great as many people make them out to be. Additionally, there are concerns about the availability of key raw materials such as cobalt and lithium. The good news is that nearly all these batteries will be either reused or recycled which will go a long way to improving sustainability and lowering the lifetime costs of both batteries and EVs.

Currently the vast majority of lithium-ion batteries, most of which are used for the mass of digital devices that make up our modern lives, are not recycled, as the cost of recycling small mobile phone batteries is just too expensive. Instead, they are collected and burned. However, that is likely to change going forward for several reasons. First and foremost, regulation is forcing change. So, for instance in Europe, the European Directive of End-of Life Vehicle forces automobile producers to reuse or recycle up to 85% of vehicle content. In addition, the Battery Directive puts responsibility on the automobile manufacturer to collect and recycle batteries. Some 95% must be collected and up to 50% of content must be recycled. The second point is the increasing prices of key raw materials such as lithium, cobalt and nickel which have seen their prices sky rocket in recent years. What this means is that it is much more financially beneficial to recycle those material noting that a large automobile battery has $1,000s worth of valuable cobalt, nickel and lithium.

The key challenge going forward is to make the material recovery process much easier than it currently is and a key part of that is battery design; and better battery management systems which allow the automobile manufacturer to decide when and if batteries need to replaced, and then what should be done with them. Such battery management systems will enable the manufacturer to decide whether the batteries should be recycled or reused in less stressful situations than automobiles such as backup power or home storage applications. These so called second life batteries have the benefit of delaying recycling while at the same time giving the automobile manufacturer the chance to monetize those batteries more fully over the lifetime of those batteries.

The result may be be a flood of inexpensive batteries that can provide energy storage services for households, utilities, and grid operators. And the numbers are big. This year, there will be some 2.4m battery powered EVs sold across the world. If they are all reused in 7 years time in second life applications that means that in 2025 over 80GWh of batteries will come to the market, which is enough to power the whole of the UK for some hours on a cold January winters night!

These second-life batteries will provide multiple value streams to customers and grid operators and benefit the environment by enabling the easier integration of renewable energy and reducing the upfront cost of electric vehicles. The result will be lower cost of batteries and better utilization of renewables, as with storage unsubsidized renewables will gain a better business case. However, there are significant hurdles around second life batteries including safety, liability and reputation risk around those batteries. But they will be solved as will the challenges around recycling all of which lower the lifetime costs of batteries which in turn is good for the cost of EVs as well as the environment.