With the rise in popularity of electric vehicles, Robin Brundle, Chairman at Technology Minerals PLC, examines the challenges and opportunities on the horizon.
300 million electric vehicles (EVs) will be zipping along the world’s highways by 2030, according to the International Energy Agency (IEA) and 60% of all cars sold will be electric ones. But here’s the problem – or, put another way – the opportunity.
As EV sales accelerate, a mountain of end-of-life (EoL) lithium-ion batteries will accumulate. One study estimates the global stockpile will reach 3.04 million packs by 2025, against 44,000 in 2018. In the UK, responsibility for safe disposal falls on producers, meaning added costs. Technology is presenting opportunities for the power sector to put old batteries to new uses, bringing both economic and environmental benefits.
Traditionally, there are two ways of dealing with EoL batteries: landfill or recycling. Recycle More UK says 600 million batteries end up in landfill in the UK. Batteries decay over time and dangerous chemicals can seep out and poison soil and water supplies; Li-ion batteries pose the added risk of fire or explosion.
Recycling Li-ion batteries used to be problematic due to multiple battery chemistries, but companies can now recycle them effectively. Recyclus, for example, will be able to recycle the main five battery chemistries, at its facility in Wolverhampton, once permits are granted.
But there is a third way that can add value to the supply chain and accelerate the circular economy.
Newest value pool
A new second-life battery market is springing up, bringing opportunities for the energy sector and EV industry.
“Continued global growth of electric vehicles means a new opportunity for the power sector is emerging: stationary storage powered by used EV batteries, which could exceed 200 gigawatt-hours,” says McKinsey. It is, the consultancy says, ‘the newest value pool’ in energy storage, and has a potential global market value “north of $30 billion” by 2030.
How does it work? Li-ion batteries in EVs degrade quickly during the first five years and are generally designed for no more than a decade of use. Once they reach 70% capacity, they’re considered EoL.
Yet they still have other valuable applications in the green economy – such as in residential batteries and stranded power (interruptions in renewable energy supply). They can be used to light offices, cool fresh food distribution centres and as transmission support for energy arbitrage, reducing energy congestion.
The mechanics for how this works is the same as how double-A batteries in a remote-control car might stop working but put them into a TV remote, and they can still last a year.
Technological advances are enabling companies to sort and categorise EoL batteries for repurposing. Recyclus is implementing new testbed systems to analyse whether batteries are suitable for reuse, repair or recycling.
EVs create significantly fewer greenhouse emissions but still produce some. One study suggests: “A closed loop battery value chain could enable 30% of the required reductions in carbon emissions in the transport and power sectors.”
Powering green energy
EoL batteries can fulfil less demanding applications, such as stationary energy storage for green energy production. The wind doesn’t always blow, and the sun doesn’t always shine. Batteries are essential to store green energy when output is high, for release when needed.
Vehicle manufacturers are waking up to the value of EoL batteries, too. Jaguar Land Rover announced a partnership in March with Pramac, a global energy leader, to develop a portable zero-emission energy storage unit powered by second-life Jaguar I-PACE batteries. Nissan, Mercedes and Audi are also piloting schemes.
As new batteries become cheaper the cost differences between new and used may fall. By 2025, second-life batteries may be 30% to 70% cheaper than new ones in these applications – tying up less capital per cycle.
Solving challenges
There are a few challenges, of course. Up to 250 new EV models will exist by 2025, with batteries from more than 15 manufacturers. Few industry standards focus on battery management systems, let alone standard performance specifications for batteries for any given application. No guarantees currently exist for quality or performance.
An immature regulatory regime also creates uncertainties for OEMs, second-life companies and potential customers. Lack of regulation can create regional differences in recycling or reuse as the dominant pathway.
In the face of more EV makes and batteries, vehicle manufacturers are considering designing their EVs with second-life applications in mind. A growing number are already doing so, including Nissan and GM Motors. In 2020, Dane Parker, chief sustainability officer at GM said, of its new Ultium battery pack: “We believe it’s very viable. If you design them with that purpose … it becomes much easier to integrate later.”
To remain competitive as new li-ion battery costs fall, companies need to industrialise and scale remanufacturing processes. Studies suggest the use of second-life batteries will remain profitable in countries with lower costs of manufacture, high productivity and low labour costs
Global agencies and private sector coalitions of OEMs and second-life battery companies are addressing the standards and regulatory deficit. The European Parliament, for instance, is working on new rules.
To remain competitive as new li-ion battery costs fall, companies need to industrialise and scale remanufacturing processes.
Battery-ownership models could also evolve. As second-life markets stabilise, vehicle and battery OEMs may find it attractive to retain ownership through battery leasing to EV owners.
This way, manufacturers can continue to make money from the battery when it can no longer be used in the car – and EV buyers benefit from lower prices. Cheaper vehicles will encourage more people to adopt them, further hastening the green transition.
The seismic shift to electric vehicles has already disrupted the automotive value chain significantly and is now on the verge of disrupting the energy storage value chain. New recycling and reuse industries have sprung up in response to the future challenge of disposing millions of EV batteries, with the potential to harness and speed up the integration of renewable power into our grids.
Partnerships are forming globally between battery manufacturers, EV makers and recyclers to help to create an efficient circular battery economy that benefits producers, drivers and the planet.
