Following years of hype and underwhelming products, the plug-in vehicle market had a breakout year in 2016. Not only do consumers now have the option to buy an electric vehicle with more than 200 miles of range and pay less than US$40,000, but the year was littered with announcements of automotive OEMs committing serious resources to building their own electric vehicles – and not just compliance cars. Cost reduction in Li-ion batteries has enabled this revolution, as have better performing batteries optimised specifically for electric vehicles. Increasing Li-ion demand will help to continue to lower energy storage costs, but also bring up an important issue: what should be done with the batteries after they are used in vehicles?
Historically batteries are recycled, and the lead-acid battery remains one of the most recycled products humans produce, but the high cost of processing most Li-ion chemistries makes this process unprofitable. This has fostered interest in reusing batteries for other applications, mostly for stationary energy storage applications, which would delay but not eliminate the need for battery recycling. On the surface this seem like an excellent opportunity to recapture value that would otherwise be wasted in Li-ion recycling batteries. While this is true in some applications, there are several reasons why reusing EV batteries is not ideal for most stationary energy storage applications.
Complexities of second-life use
Reusing Li-ion batteries in second-life applications is not as simple as removing a battery from a vehicle then installing it directly into a stationary system. Before a battery can be reused, it first must be manually removed from a vehicle and the pack disassembled into individual cells. The cells must then be tested to determine the battery’s state of health, sending batteries without sufficient remaining capacity to be recycled. Even within the batteries suitable for reuse, cells must be sorted by similar remaining capacity, or else the second-life system performance would suffer. These are labor and energy intensive processes, but efforts in both academia and industry are underway to reduce costs. Introducing automation in the process will reduce time and labor costs, as will convincing battery manufacturers to use clearer labels and design for disassembly.
Even with better processing techniques there are some limitations to our current understanding of the second-life battery opportunity. As the first mass-market electric vehicle was released about six years ago, and few vehicles have reached the end of their life, there isn’t a clear indication of how much remaining capacity can be expected from these batteries after typical use. There will be further variation among the different chemistries being used in the Li-ion batteries: the nickel cobalt aluminum oxide (NCA) batteries preferred by Tesla are unsuitable for most stationary applications, even when new, due to poor cycling characteristics. Other chemistries such as lithium iron phosphate (LFP) and nickel manganese cobalt oxide (NMC) preferred by other manufacturers in batteries made by LG Chem, Samsung SDI and BYD are better suited for second-life applications.
Cycle life is a critical metric in many stationary storage applications, as it directly impacts the lifetime of a system. Unlike vehicles, for which some consumers will pay a higher price for added luxury, stationary systems are driven by economics and performance alone. The high capital costs of installing stationary systems rely on revenues generated by its usage to become profitable over time, so concessions in cycle life mean sacrifices to system profitability. Furthermore, Li-ion cells make up less than 30% of total system costs in most cases, due to the high cost of engineering, permitting, and constructing the systems. This means savings of more than 15% are unlikely in most applications, and given the performance sacrifice in second-life cells, new cells are often the better choice. Only applications with lower cycle life demands, such as backup power and diesel generator replacements, are likely to use reused batteries.
Recycling likely to win out
Given the current status of the two technologies, recycling is a more economical choice than reuse for applications. Recycling costs are also expected to drop significantly as Li-ion batteries continue to be sold on a larger and larger scale. Logistical costs for recycling are significant due to the small number of facilities which can recycle electric vehicle batteries, of which only a handful exist at scale globally, so shipping costs are high. Additionally, an energy intensive smelting process is typically employed to recycling batteries, due to the flexibility of accepting a diverse array of chemistries without needing to be sorted. New recycling processes are emerging which are lower temperature and recover more valuable materials, but have yet to be employed at scale. Although some niche stationary storage applications may find second-life Li-ion batteries more affordable, the Li-ion battery driving the electric revolution is more likely to be recycled than reused.