Giving EV batteries a second life can solve residual value challenges
A second life for EV batteries could hold the key to improving vehicle residual values, according to industry experts.
EVs are suffering from lower resale values, negatively impacting the vehicle leasing business model. However, Connected Energy believes that repurposing those batteries at vehicle end of life can help to solve this problem.
Alex Charr, COO, Connected Energy, said :
Giving former EV batteries a second life as energy storage can unlock additional value,
“New commercial models are now emerging to enable financial returns for EV battery owners. This could substantially improve residual values for EVs and accelerate the transition to all-electric vehicles.”
The residual value (RV) is the benchmark for pricing a vehicle at the end of its lease term. Strong residual values are important for sustaining the financial health of the leasing market. The British Vehicle Rental and Leasing Association (BVRLA) is warning of a ‘coming storm’ on EV residual values, reporting that used EV values had fallen 50% in the past two years.
Connected Energy has proved that EV batteries can have a successful second life in stationary energy storage systems.
Alex, added :
Based on our data, the revenue generated via second-life applications is significant – potentially thousands of euros per unit – a huge boost to the residual value of an EV,
“For OEMs, it also improves the carbon footprint of an EV because reusing existing batteries for energy storage applications reduces the need to produce new batteries.”
Looking further ahead, second life also solves the current issue of having to pay for battery recycling. Recycling lithium-ion batteries remains a costly and energy-intensive process, with a negative scrap value averaging hundreds of €s per pack in Europe.
Alex, said :
By extending battery lifespans, we reduce the immediate need for recycling, giving the industry time to mature and costs to come down,
“Of course, once the recycling industry matures to the point where it is paying for battery packs, this becomes an additional cost benefit after second life.”
When an EV reaches the end of its life, the batteries still retain up to 80% of their original energy storage capabilities. Repurposing them for stationary energy storage can create significant value. Applications include battery energy storage systems to support EV charging hubs and microgrids or capturing excess solar for decarbonisation goals.
Alex, added :
Our experience at Connected Energy proves this concept works,
“Through our E-STOR systems and collaborations with automotive leaders, we’ve demonstrated the potential of second-life batteries in a variety of applications. And based on our data, we now know that the same principles apply at scale, enabling large scale opportunities for energy storage developments which support the grid on a network level. By monetizing second-life batteries, leasing companies and OEMs can introduce an additional revenue stream, directly boosting the intrinsic value of a used EV. This not only addresses the issue of falling RVs but also enhances the overall sustainability of the global EV industry.”
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Giving EV batteries a second life can solve residual value challenges
