Recycling EV Batteries More Cost-Competitive Than Using For Home Energy Storage — Lux Research Echoes Tesla CTO JB Straubel

November 24th, 2016 by James Ayre

It makes more sense from an economic standpoint to recycle old plug-in electric vehicle batteries than to reuse them directly for home energy storage, according to a new report from Lux Research.

The primary reason? According to Lux Research, reused plug-in electric vehicle batteries will “deliver questionable returns on account of reduced performance, limiting them to application with less frequent and shallower depth of discharge cycles.”

This echoes what Tesla CTO JB Straubel said earlier this year. Tesla has said repeatedly that it plans to recycle almost 100% of the materials in its batteries at its Gigafactory. When asked about simply reusing batteries instead of recycling them, though, JB Straubel indicated that Tesla continuously finds that this doesn’t work out as a cost-competitive approach. Here were his comments on the matter:

“We’ve looked at reuse or kind of the second life of automotive batteries for grid applications very closely, and you know, ultimately, every time we’ve studied this we’ve come to the conclusion that it’s not a very economical or very good use of those assets.

“You know, by the time they come out of a vehicle that’s lived its life, the technology will be quite old. We expect 10 maybe 15 year life at a minimum from these batteries. And, you know, the degradation is not entirely linear. By the end of their life, the efficiency has degraded on every cycle, you see lower efficiency, the capacity will have somewhat degraded, and for a lot of reasons, it makes it very difficult to deploy those efficiently back into a grid setting, where you want high reliability and you do want predictability.

“So, my view is that we’ll see new batteries dedicated to that market, that also have slightly different characteristics — they should have higher cycle life. In an electric vehicle that has 200+ miles of range, you don’t need as many cycles as you do on a battery that’s designed to charge and discharge every single day on the grid. There’s perhaps a factor of about 4 or 5 difference in the cycle life — so that’s one aspect.”

“With present technology, recycling old batteries for new materials is the more economical option for creating the most value from existing materials,” stated Christopher Robinson, Lux Research Associate, and lead author of the new report. “That said, innovations in areas like packaging and testing could tip the balance in the future, so companies should have plans for both recycling and reuse.”

As an example, an 11.2 kilowatt-hour (kWh) home energy storage system composed of second-life electric vehicle batteries will cost around $4,600 (according to Lux Research) and a 7 kWh system composed of new batteries will cost around $6,000, but with round-trip efficiency and cycle life factored in, this will make systems composed of new batteries the better option, according to the market research firm.

All of this is moot, of course, if you’re simply reusing the batteries from your own electric vehicle — which requires a bit of technical know-how but is certainly doable. Looking at it from a purely economic standout though, you’ll have to compare the costs of repurposing your own vehicle battery pack + lost income from the deferred sale of your vehicle against the cost of a new system.

Amongst the other findings of the report (verbatim):

Recycling technologies are varied . Of all the recycling technologies, pyrometallurgical processing, or smelting, is the most mature and can recover key metallic elements. Mechanical processing can recover valuable cathode materials directly, and hydrometallurgical processing can be lower cost.

. Of all the recycling technologies, pyrometallurgical processing, or smelting, is the most mature and can recover key metallic elements. Mechanical processing can recover valuable cathode materials directly, and hydrometallurgical processing can be lower cost. Tesla backs recycling. Automakers are choosing a wide array of applications for reuse of batteries. BMW and Nissan are commercializing residential storage products, while Daimler has started operating a large 13 MWh system. Tesla, on the other hand, pursues recycling as its NCA cathodes are not suitable for most stationary storage needs.

Automakers are choosing a wide array of applications for reuse of batteries. BMW and Nissan are commercializing residential storage products, while Daimler has started operating a large 13 MWh system. Tesla, on the other hand, pursues recycling as its NCA cathodes are not suitable for most stationary storage needs. Reuse options are limited. Second-life batteries offer only limited cost savings, especially as new cell prices continue to fall. Still, with more efficient testing, sorting, and repackaging, second-life systems could be made more competitive for applications like demand response and backup power.

According to the report, up to 65 gigawatt-hours (GWh) of second-life electric vehicle batteries will likely enter the marketplace in 2035 — as early electric models are retired from service.

The full report, titled Reuse or Recycle: The Billion-Dollar Battery Question, can be found here.











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