Like many other industries, circular economy concepts are gaining increasing traction in the mobility industry. In a sign that the industry is thinking collaboratively about sustainable practices, a national rail operator and a leading automaker have joined hands in a unique partnership to promote battery second life applications.  Deutsche Bahn (DB), Germany’s national rail service operator, will be teaming up with leading automaker Kia to extend the useful life of lithium-ion batteries in Kia’s Soul electric vehicles (EVs) by repurposing them for second life use in battery energy storage solutions.

The process is simple and effective.  Kia will dispatch its old batteries via the DB logistics network – DB Schenker and DB Cargo – to energy storage startup, Encore. In turn, Encore will perform detailed tests to determine which batteries have adequate storage capacity, meet safety and quality parameters, and can be re-used in modular battery storage systems. Manufacturing and sales of these systems are set to start in 2023. As importantly, batteries that cannot be repurposed will be dispatched for recycling or reuse in other applications or will be safely disposed.

These green energy storage systems are likely to support significant cost savings in the energy-intensive rail transportation arena.  Their likely use will be in providing a consistent, cost-effective supply of electricity to DB’s maintenance and staging depots.

To learn more, please access our research reports, Global Automotive Circular Economy Growth Opportunities and Key Trends in Circular Economy in Automotive: Voice of Industry Thought Leaders, our forthcoming report on EV Battery Second Life – Used EV Battery for Recycling, Reuse, Refurbishing, or contact sathyanarayanak@frost.com for information on a private briefing.

A Second Lease of Life

According to the International Energy Agency, close to 250 million EVs will be on the world’s roads by 2030. While EVs represent a more environment-friendly alternative to their internal combustion engine (ICE) counterparts, they still present challenges related to the safe disposal of end-of-life batteries.

Many of these, although unsuitable for use in EVs, retain more than 70% of their storage capacity.

This underlines their potential use in second life applications, including in stationary energy storage systems. While the concept is reasonably well-established, the widespread use of new – rather than used – batteries to build such systems has aggravated pressures on the environment.

Therefore, circular economy practices in the electromobility domain are necessarily looking at ways to reintroduce end-of-life batteries safely and effectively into the value chain. By repurposing and extending their useful life in green energy storage systems, for instance, decarbonization and cradle-to-grave sustainability agendas will gain impetus.

Today, OEMs and Tier I companies are embracing circular practices to meet decarbonization imperatives and embed sustainability into supply chains and manufacturing practices. The four primary aspects of circular economy in the automotive industry – remanufacture and reuse of components in used cars and in the aftersales market; recycling where raw materials are extracted for use in new vehicles and other industries; product life extension where predictive battery maintenance maximizes their useful life in vehicles in operation; and the use of eco-friendly sustainable materials such as bioplastics in new car production – are yielding a host of environmental and economic benefits.

Multiple second life applications are already evident, ranging from the use of reassembled end-of-life EV battery packs as replacement batteries in older EVs to their use as a backup power source for other renewable energy sources in residential applications. Meanwhile, the use of lithium-ion packs as backup power storage systems in commercial settings is also being explored.

In short, OEMs are identifying ways to sustainably prolong the useful application of end-of-life batteries, thereby unlocking new revenues streams and business models. For instance, Toyota has partnered with Chubu Electric Power to build a large-scale battery storage system that reuses end-of-life batteries from Toyota EVs. Volvo has teamed up with BatteryLoop to develop solar-powered energy storage systems using end-of-life batteries from their EV cars. Renault ZOE lithium-ion batteries were used to harness and store solar energy and power a school building at night. This reuse also extended the life of the lithium-ion batteries by five years. Nissan has strategically allied with Green Charge Network, a US-based energy storage company, to build commercial energy storage systems using end-of-life batteries from the Leaf. General Motors has been working with ABB for almost a decade to build second life applications for EV batteries from the Chevrolet Volt.

The Kia-DB partnership is in line with such trends. It will allow the partners to enhance the lifecycle and value extracted from end-of-life batteries through second life applications. From a business, environmental and economic perspective, it signifies a win-win situation.

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About Prajyot Sathe

Prajyot Sathe is a Research Manager with Frost & Sullivan's Mobility Practice. Prajyot's area of expertise includes Powertrain and electric vehicles with a special focus on the global electric and hybrid vehicle market and technologies.

Prajyot Sathe

Prajyot Sathe is a Research Manager with Frost & Sullivan's Mobility Practice. Prajyot's area of expertise includes Powertrain and electric vehicles with a special focus on the global electric and hybrid vehicle market and technologies.

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