Building New Demand: Monetizing EV Battery Repurposing

Titan Advanced Energy Solutions announces an exciting new program that could bring a circular-economy solution to electric vehicle batteries, as well as potential income to auto recyclers.

            Automotive recyclers are innovators and leaders in repurposing, with the automobile as the most recycled product in the world. About 12 million end-of-life vehicles are recycled in the U.S. every year. The industry should be proud that automotive recycling is the 16th largest industry in the country, employing hundreds of thousands while mitigating the environmental, economic, and social impact of our growing demands. 

            Recycling practices are invaluable to our growing global economy, turning waste into new potential and creating opportunities for the entire supply chain as a significant part of the circular economy – from manufacturer to consumer and back again. As new vehicle technologies emerge, auto recyclers are on the forefront of reuse possibilities, and are dedicated to exploring the value that automotive innovations offer to ultimately benefit their business, the consumer and the environment.

            The automotive recycling industry has come far, rich with the entrepreneurial spirit, in its over 77 years of experience, developing new and advanced methods of sorting, managing and shipping waste to optimize the full recycling process.

The Next Frontier

            With the world shifting towards electrification and widespread use of clean energy sources, we are seeing the shift towards electric mobility become more apparent. According to Bloomberg, by 2022, an electric vehicle’s cost will drop to match their internal-combustion engine counterparts, and that’s when demand will start taking off, as you can see in Figure 1 (see next page). Just a few short years away, there is still much to figure out to fully utilize the EV as an end-of-life product.

            Driven primarily by the growing demand for electric vehicles, the demand for lithium carbonate equivalent will increase seven-fold by 2030. The supply of raw materials may or may not be prepared for this exponential growth, making the industry heavily reliant on efficient recycling and repurposing processes. Over 70 percent of that demand will be coming from electric vehicle manufacturers as shown in Figure 2 (see next page).

In 2018, the Edison Electric Institute, an association that represents all U.S. investor-owned electric companies, celebrated one million EVs on U.S. roads , that means there’s one million electric vehicles that will approach their end-of-life at any point during the next six to eight years. 

Fully Mining the Gem of the Road

            “Used EV batteries pose a rapidly growing opportunity for automotive recyclers. I expect to see first-movers capturing significant market share by training their workforce on how to safely handle batteries and measure their state-of-health to determine value,” says Shawn Murphy, CEO at Titan Advanced Energy Solutions, a company that develops ultrasound-based technology and advanced algorithms that measure and evaluate the health and charge of lithium-ion batteries in real time.

            To understand the potential monetization, we have to first evaluate the current marketplace.

            Battery Electric Vehicles (BEVs) are fairly simple and easy to operate. The core architecture consists of a high voltage battery pack, an electric motor with power electronics controller and a speed gearbox. The battery is the heaviest and most valuable gem within the vehicle, positioned very low providing a lower center of gravity and improved vehicle stability. The battery holds the electric energy that enables propulsion and is controlled by a Battery Management System (BMS).

            While the entire vehicle could be retired at any point due to various reasons, battery manufacturers warrant an electric vehicle’s battery for eight years or 100,000 miles, whichever comes first. At this time, batteries are normally retired due to faded capacity that no longer meets the needs of automotive consumers. According to IDTechEx research, by 2030 there will be over six million battery packs retiring from electric vehicles per year.

            Today’s default option is to recycle these batteries to extract raw materials for sale. However, less than six percent of the original battery value is recovered through recycling in this way. That means 94 percent of an EV battery’s potential value is left on the table. Furthermore, used EV batteries retain up to 80 percent of the original capacity that can be further utilized for second-life applications such as stationary commercial/residential energy storage.

            A simple analogy to convey the value of a battery is that of a 1950 Corvette. If you bring an antique car such as this to an auto recycler, you may get some value for the steel, materials, and maybe a rare car collector’s part needs – but the vehicle is worth as much as the sum of its parts. Yet, if you bring this car to an auction house, you will be compensated for an antique, an exponential increase over the value of its parts.

As with antiques, there is a shortage of EV batteries. The current market supply cannot meet demand, increasing prices and limiting supply to Tier-1 players who can withstand the price increase. Used batteries are a readily available source of supply that can be easily and economically repurposed, as long we can easily and accurately measure the battery’s State of Health (SoH).

How Do We Measure A Battery’s SoH?

            Currently, after retiring the vehicle, removing the battery pack and disassembling the pack into modules, the only way to measure a battery’s SoH reliably is using Battery Cyclers. Battery Cyclers are heavy lab testing units, about the size of a small refrigerator, that require high voltage and specialized labor.

            Since neither auto manufacturers nor recyclers do battery cycling, they would have to ship them to a company that does. That whole process is not only time-consuming and brings a level of risk in the transport of EV batteries, but also energy-consuming, labor-intensive, very expensive and not scalable. This painful process is why end-of-life processors would rather assume that all batteries are bad and ready for material recovery instead of attempting to repurpose them for secondary (profitable) applications.

            But wait – assuming we can (somehow) determine some of them are good, what are the possibilities?

Missed Fortunes: Money Lost in Recycling Too Soon

            Being the most expensive part of the electric vehicle, there’s actually much more money to be made from reselling a used EV battery for second-life applications than in retrieving its raw materials.

            Reusing Lithium-ion batteries in second-life applications will delay their end-of-life, buying some time for the recycling industry to optimize material recovery for EVBs. Meanwhile, aggregators, recyclers, and repurposers could make a fortune testing, sorting, and selling those batteries for Energy Storage Systems (ESS) integrators, integrated solar solutions – or even 7-Eleven. According to Bloomberg Businessweek, “The first batches of batteries from electric and hybrid vehicles are hitting retirement age, yet they aren’t bound for landfills. Instead, they’ll spend their golden years chilling beer at 7-Elevens in Japan, powering car-charging stations in California and storing energy for homes and grids in Europe.”

            A growing realm of applications is emerging, and auto manufacturers are taking the lead.

What’s the Missing (Innovative) Element?

            The bridge to reduce EVB waste and increase their profitable and sustainable 2nd-life opportunities is accurate, fast, and reliable SoH measurements– conducted conveniently in an auto recycling or scrap processing facility.

            Realizing the need to fix scalability and cost issues, Titan Advanced Energy Solutions pioneered an innovative solution: using ultrasound and advanced algorithms to quickly, accurately and efficiently measure a lithium-ion battery’s SoH. Their patented technology comes to life through ScorpionTM, a portable, table-top device that is user-friendly and easy to operate with the press of a button. This innovative device can measure the SoH of a used EV battery in less than five seconds and is accurate to 99 percent. Potentially, it can provide Battery Health Certification for use in the process of resale and reuse. As the upper arm is lowered on the battery, the Scorpion sends ultrasound pulses and quickly displays a battery’s SoH on its front screen, as shown below.

Capturing the New Demand

            As society moves towards a more sustainable future, it is imperative that auto manufacturers design vehicles from a “cradle to cradle” perspective to ensure they can be easily repurposed, recycled and reused for all stakeholders– people, planet, profit. Ultimately, that’s how we enable an economically sustainable circular economy.

            Reliance on EVs will only continue to rise. There’s a massive opportunity – both environmental and financial – to give the EVB a second-life. They offer the potential for reliable, inexpensive energy for other uses. Titan has big dreams to make energy cleaner, safer, and cheaper. We look forward to working closely with our strategic partners, including auto recyclers, to make these dreams a reality.

REFERENCES:

Rudman, K. (2018, November 30). EEI CELEBRATES 1 MILLION ELECTRIC VEHICLES ON U.S. ROADS. Retrieved August 04, 2020, from https://www.eei.org/resourcesandmedia/newsroom/Pages/Press Releases/EEI https://www.bloomberg.com/news/features/2018-06-27/where-3-million-electric-vehicle-batteries-will-go-when-they-retire?sref=hUvu91j9