Second-life EV battery market to grow to $4.2 billion by 2025
Circular Energy Storage, a London-based research and consulting group, reports a strong business case for reconstituted electric vehicle batteries for energy storage applications. As the EV and static storage system markets grow rapidly, synergies could be a useful tool for continued cost optimization.
According to a recent report by research group Circular Energy Storage, the global market for end-of-life lithium-ion batteries is expected to be worth $1.3 billion this year.
The analysts state $1.1 billion could be generated through the recovery of materials and the remaining $230 million would be attributed to the repair, refurbishment and preparations sector.
As China ramps EV sales, the report estimates 70% of the ‘second-life’ battery market value will originate in the nation. The report adds South Korea –with a 16% share – is the second largest contributor to the market.
The market for battery recycling is expected to grow to $3.5 billion, and the market for second-life batteries could reach $4.2 billion by 2025, claim the analysts.
While recycling batteries is common for portable devices, it can be postponed through ‘second-life’ applications in the case of EV batteries, with applications such as the use in energy storage systems. The report states EV batteries have optimal properties to be reused for energy storage, with regards to their capacity and remaining life-cycles.
For this type of end-of-life use, EV batteries are placed in static energy storage systems on a residential and utility scale.
New revenue stream for EV makers
EV early adopters such as Nissan, Renault and BMW, the report claims, could benefit from new revenue streams given the power packs’ second-life potential.
By 2025, second-life battery applications in energy storage systems could reach 42 GWh capacity – 80% of it in China –a figure that would meet half of the forecast installed battery storage capacity in China by that point.
The report also highlights that improved manufacturing processes related to standardization, make this type of second-life use achievable at better costs, which would increase revenue generation for stakeholders in the market even further.