OEM Investment and commitment to emissions targets are key drivers of change for battery-powered electric vehicles
Most if not all automotive market experts forecast that battery powered electric vehicles will be a significant growth opportunity for the next 5 to 10 years. OEMs have also put a substantial amount of capital behind these developments, to recover from the brand depreciation, they have experienced with the emissions violations. This change will naturally drive improvements in inner-city air quality as seen by the recent lockdowns in several cities resulting from the COVID -19 pandemic which have had a similar effect.
The Electric Vehicle Battery Lifecycle
However, these initiatives only address half the story or what is commonly referred to as Tank to Wheel. This term captures the part of the energy chain from use of a fuel (charging point or fuel pump) in a vehicle and its emissions under use conditions to disposal. The other part of the equation is from the Well to Tank, which captures the earlier part of the energy chain from extraction, production and logistics to the delivery point. Here we will focus on the former, and a potential extension of the Tank to Wheel discussion, to cover essentially a “Tank to the Grave” with regards to electric vehicle battery re-use.
The existing Electric Vehicle Battery Lifecycle
From an OEM or service provider perspective, the status quo of EV battery handling across the life cycle today is as follows:
- Storage in off-site facilities (not at the dealership), repair at dealer sites via flying doctors
- High repair, replacement and upgrade costs for customers and the OEM (scale effects still not realised)
- Defective and old batteries being recycled after the vehicle usage phase
The expected future Electric Vehicle Battery Lifecycle
However, the expectation is that the future state will look something like the following:
- Customer-oriented treatment per life-phase, e.g. upgrade options, low-cost repairs at dealers via technicians
- Dedicated battery lifecycle management and central storage and recycling concepts
- Competitive battery warranty of 8 years or 160,000 km
How might batteries be repurposed for second life operations ?
Batteries (at current technology levels) typically have an automotive life of 7-10 years. At the end of that time, their capacity is degraded to 70-80% of their original capacity, and they are less fit for mobility applications. Thereafter batteries can be repurposed for second life operations which are typically less demanding. The second life of a battery typically starts at ~80% of original battery capacity and ends at ~40% of original battery capacity. Once they have been re-used within those applications, they can be ultimately recycled at end of life:
- Second life battery applications may cover Home Energy Storage Units (in combination with solar energy generation) which are considered the most promising application.
- They may be used for emergency power generation for back up systems in residential units or building sites
- The repurposing of used BEV batteries for second life applications is a multi-step process with cost estimates ranging between €25 and €50 per kWh (NREL estimate; type & state of the battery, the scale effects and the remanufacturing process; excl. logistics)
- Sales prices for second life batteries are expected to be aroundhalf of new battery prices at any given time – by 2025 second life battery prices will likely fall to around €50 per kWh
- The economic viability of second life batteries depends on´design for second life´ and highly efficient repurposing processes. Minimised logistics cost and an accurate understanding of battery cell health are important to keep costs down.
- If second life battery management is outsourced, the recycling and warranty risk can be passed on to the second life battery re-manufacturer.
- Recycling costs are significant at current scale & process levels, however, at higher scale, break-even or even a profit can be achieved and hence why this becomes an attractive opportunity for new service providers.
As these new business opportunities manifest at scale for 2nd life battery applications, the results of Well to Wheel or Life Cycle Analysis will start to make the case for battery electric vehicles much more attractive.
Reach out to Ricardo Strategic Consulting to see how we have helped other businesses improve their competitive position in this space.
Is your business part of this energy supply chain, or do you see a business opportunity based on the required core skills within your company? The RiCK™ database gives your and your team access to over 300000 abstracted references from industry-leading sources and can be used to locate relevant research papers and technical reports relevant to the lifecycle of an electric vehicle battery and other automotive, engineering, transport and energy topics. Contact our team for a demo of the RiCK™ tool.