According to a recently released report from IDTechEx, the amount of EV batteries (or powertrain batteries) that reach the end-of-life stage in 2020 is estimated to total around 100,000 metric tons or 14 gigawatt-hours. By 2040, the annual total of retired EV batteries is forecasted to hit 7.8 million metric tons. Currently, there are two main approaches to dealing with the massive and growing stock of used EV batteries: recycling or finding a second life. The adoption of either approach depends on individual carmakers.
It is worth noting that the lithium-ion (Li-ion) powertrain batteries of the first commercially available EVs are now approaching their 10th year of service. Most of them are expected to be soon replaced on account of their outdated specifications and declining performance. EV manufacturers thus have to quickly come up with a cost-effective and environment-friendly solution to address the upcoming deluge of battery wastes that is squarely facing them.
Unlike the smaller Li-ion batteries used in consumer electronics, EV batteries cannot be recycled simply by having the local sanitation team collect them or dropping them off in a specified location. In some countries, electronic retailers and even chain convenience stores are mandated to help with the recycling of various types of batteries. However, besides their size and structural complexity, EV batteries are subject to highly demanding operational requirement. They are usually ready for decommissioning when they lose just 20% to 30% of their initial capacity because their weakening performance will lead to a corresponding reduction in the range of EVs.
On the other hand, used EV batteries that have been swapped out are in a rather awkward situation. Although they cannot retain full charge like before, they still work fairly well and are not exactly primed to be scrapped for materials. They can be compared to relatively healthy people that are 50 to 60 years of age and in early retirement. These folks are not yet ready to stay put in their homes.
Carmakers including BMW, Nissan, Volkswagen, and BYD are now researching on ways to give used EV batteries a second life. Those EV batteries that no longer meet the range requirement due to capacity loss can still have a role to play in residential, commercial, and utility-scale energy storage applications. They especially have the potential to become low-cost solutions for building microgrids.
In contrast, the leading EV manufacturer Tesla has decided that retired EV batteries should directly enter the recycling process, where their component materials will be recovered and used for making new batteries. Tesla’s approach is rather interesting because direct recycling seems to have a greater environmental impact compared with finding a second life. At the same time, Tesla maintains an image of being at the forefront of environmental consciousness.
Costs of raw materials determine the retirement path for different types of Li-ion batteries
The answer to why carmakers have different strategies for aging EV batteries is that the decision to either recycle or reuse depends on the material composition of batteries. In other words, it is the matter of cost.
The Li-ion batteries used by EV manufacturers vary in terms of design and materials. Carmakers in China, which is currently the world’s largest EV market, mostly adopt lithium iron phosphate batteries (LFP batteries). Compared with other types of Li-ion batteries such as lithium nickel manganese cobalt oxide (NMC) and lithium nickel cobalt aluminum oxides (NCA), LFP batteries have a lower energy density but a longer lifecycle. LFP batteries are also safer performance-wise and cost less to manufacture. Most importantly, LFP batteries do not contain high-value metals like cobalt. This means that there is less incentive to recycle them.
Tesla since the beginning has been using NCA batteries because of their high energy density and impressive performance. However, using more cobalt will raise the manufacturing cost of the whole battery.
The report from IDTechEx states that the recycling value of LFP batteries is currently around US$9 per kilowatt-hour on average, whereas the recycling value of NMC batteries comes to a high of US$25 per kilowatt-hour. Cobalt prices is expected to keep rising in the future as the competition for supply intensifies. Manufacturers of ternary batteries therefore need to improve their cost structures through an efficient battery recycling scheme.
As for the used EV batteries that have found new applications such as utility-scale energy storage systems, they will eventually be broken up and recycled at the end of their second life. Nevertheless, they would have contributed a bit more than the counterparts that enter directly into the recycling process. In 2014, Taiwan’s Chung-Shan Institute of Science and Technology established a demonstration microgrid on the island of Kinmen. The project comprises 50 kilowatts of photovoltaic generation, 4 kilowatts of wind power, and used LFP batteries from electric buses.
The demand for repurposing used EV batteries continues to grow in China, and plans are underway in that country to have second-life batteries power vehicles that meet less demanding transportation needs (e.g., tour buses and low-speed logistic vehicles). Going forward, businesses related to the recycling of batteries and the recovery of battery materials are expected to take off as EV drivers replace aging batteries or older vehicles. IDTechEx currently forecasts that the entire market for Li-ion battery recycling will generate an annual value of US$3.1 billion by 2024. Those who are interested in profiting from these market trends should pay more attention to the related industries.
(News source: TechNews. Photo credit: Shutterstock.)
