Almost all global automakers are currently promoting the second use of electric vehicle batteries, which also leads people to believe that this solution will be another model of the circular economy. However, Reuters recently wrote an analysis saying that the secondary use of electric vehicle batteries is technically feasible, but the old batteries themselves are difficult to obtain.
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Hans Eric Melin, the founder of Circular Energy Storage (CES) Consulting, which tracks battery quantities and prices, said recently: “Manufacturers always assume that electric vehicle batteries will only last 8 to 10 years, and then the owner will replace them. But this assumption is not true. it is wrong.”
The current solution for secondary energy storage is simple and quite ideal: In theory, as the battery capacity of electric vehicles drops below 80%-85% after eight to ten years of use, they can be reused to power buildings. It can be connected to the household grid as an energy storage device to help users reduce peak electricity consumption.
Circular economy investors who believe in this scheme have already provided about US$1 billion (IT House note: currently about 7.2 billion yuan) in funding to more than 50 startups around the world. In addition, many automakers such as Mercedes-Benz and Nissan have established their own battery secondary utilization business.
The problem with this solution, however, isn’t that it’s technically infeasible, it’s that there is a lack of supply of old batteries, and the problem shows no signs of easing.
The average lifespan of fossil-fuel vehicles on U.S. roads is rising and is now a record 12.5 years, according to S&P, meaning many owners are hesitant to switch for a variety of reasons. By analogy, many electric car owners will still choose to continue driving even if the battery is “running out of oil and the lights are dry”.
“The 80% battery capacity threshold is just an arbitrary number that doesn’t reflect the actual usage of electric vehicles,” said Melin of CES. Formerly produced electric vehicles are still in use, and there is currently “virtually no market for secondary batteries”.
Still, the demand outlook for older batteries remains solid. The Paris-based International Energy Agency previously estimated that global grid storage battery capacity could rise to 680 GWh by 2030, from 16 GWh at the end of 2021. The UK alone spends around £1 billion a year (currently about 9.16 billion yuan) shutting down wind farms when the grid doesn’t need power – and there’s currently no way to store power due to battery shortages. But the UK also often has to buy electricity from Europe when electricity is in short supply.
US start-up Smartville has found a solution by buying batteries from electric vehicles that insurance companies scrap. Because insurers can’t assess the extent of damage to EV batteries, these batteries, which are often still at nearly 100 percent capacity, often end up with the car itself. The company’s CEO predicts that by 2026, more than 1 gigawatt-hour of recycled batteries will enter the U.S. market each year.
