Recycling EV batteries for home storage 'nonsensical,' says report

November 22, 2016 // By Nick Flaherty
The economics of reusing batteries from plug-in vehicles for home energy storage don’t make sense, says a new report from Lux Research.

Up to 65 GWh of second-life batteries are poised to enter the market by 2035 with the retirement of the first generation of plug-in vehicles, but reusing them for home storage is not economic says the report, “Reuse or Recycle: The Billion-dollar Battery Question,” from the Lux Research Energy Storage Intelligence service.

Reuse of batteries from electric vehicles will deliver questionable returns on account of reduced performance, limiting them to application with less frequent and shallower depth of discharge cycles. For example, an oversized 11.2 kWh residential system from second-life batteries will cost just over $4,600, compared with nearly $6,000 for a new 7 kWh system. The reduced efficiency and cycle life make residential units and other daily cycling applications a poor fit compared to some others.

“With present technology, recycling old batteries for new materials is the more economical option for creating the most value from existing materials,” said Christopher Robinson, Lux Research Associate and lead author of the report. “That said, innovations in areas like packaging and testing could tip the balance in the future, so companies should have plans for both recycling and reuse,” he added.

Lux Research analysts evaluated the technology landscape for recycling batteries and identified potential applications for second-life batteries and found that recycling technologies are varied. Of all the recycling technologies, pyrometallurgical processing, or smelting, is the most mature and can recover key metallic elements. Mechanical processing can recover valuable cathode materials directly, and hydrometallurgical processing can be lower cost.

Tesla backs recycling and car makers are choosing a wide array of applications for reuse of batteries. BMW and Nissan are commercializing residential storage products, while Daimler has started operating a large 13 MWh system. Tesla, on the other hand, pursues recycling as its cathodes are not suitable for most stationary storage needs.

Second-life batteries offer only limited cost savings, especially as new cell prices continue to fall. Still, with more efficient testing, sorting, and repackaging, second-life