batteries Article Circular Business Models for Extended EV Battery Life Linda Olsson *, Sara Fallahi , Maria Schnurr, Derek Diener and Patricia van Loon RISE Viktoria, RISE Research Institutes of Sweden, Lindholmspiren 3A, SE-417 56 Gothenburg, Sweden; [email protected] (S.F.); [email protected] (M.S.); [email protected] (D.D.); [email protected] (P.v.L.) * Correspondence: [email protected]; Tel.: +46-702-456-204 Received: 3 October 2018; Accepted: 22 October 2018; Published: 2 November 2018 Abstract: In the near future, a large volume of electric vehicle (EV) batteries will reach their end-of-life in EVs. However, they may still retain capacity that could be used in a second life, e.g., for a second use in an EV, or for home electricity storage, thus becoming part of the circular economy instead of becoming waste. The aim of this paper is to explore second life of EV batteries to provide an understanding of how the battery value chain and related business models can become more circular. We apply qualitative research methods and draw on data from interviews and workshops with stakeholders, to identify barriers to and opportunities for second use of EV batteries. New business models are conceptualized, in which increased economic viability of second life and recycling and increased business opportunities for stakeholders may lead to reduced resource consumption. The results show that although several stakeholders see potential in second life, there are several barriers, many of which are of an organizational and cognitive nature. The paper concludes that actors along the battery value chain should set up new collaborations with other actors to be able to benefit from creating new business opportunities and developing new business models together. Keywords: electric vehicles; reuse; recycling; electricity storage; business models; circular economy 1. Introduction In July 2018, there were over 55,000 electric vehicles (EVs) in Sweden [1]. Worldwide, the number exceeds 3 million and is expected to increase to between 125 million and 220 million by 2030 [2]. Vehicle original equipment manufacturers (OEMs) have ambitious goals to transform their fleets. For example, as of 2019, Volvo Cars will no longer launch vehicles that are driven solely by internal combustion engines, transforming their portfolio into one based on hybrids and plug-in EVs. Buses and other heavier vehicles are also becoming increasingly electrified. While EVs are expected to reduce the climate impact and pollution problems of transport, many of the materials used in the batteries are toxic and rare and might thus reduce the sustainability performance of EVs in impact categories such as human toxicity, acidification and eutrophication potential [3–6]. Extending the battery life cycle is therefore a crucial aspect in improving EVs’ contribution to overall sustainable development. By 2025, 250,000 metric tons of EV lithium-ion batteries (LIBs) are expected to have reached end-of-life [7]. In this context, end-of-life means that the batteries are no longer considered useful in a vehicle, but they still retain 70–80% capacity. Being able to make use of that capacity, and only then recycle the batteries, might lead to big sustainability improvements. Capturing the value that is left in a product after use is the cornerstone of circular economy. Through direct reuse, refurbishment, remanufacturing, and/or recycling, waste can be eliminated [8]. Remanufacturing and reuse slow down the resource cycle by extending products’ life while recycling Batteries 2018, 4, 57; doi:10.3390/batteries4040057 www.mdpi.com/journal/batteries Batteries 2018, 4, 57 2 of 15 closes the resource loop [9,10]. The processes of reuse and recycling are complementary to each other, Batteries 2018, 4, x FOR PEER REVIEW 2 of 15 and the largest sustainability benefit can be reached if EV batteries are first reused and then recycled. ThereRemanufacturing are currently and a reuse number slow ofdown established the resource businesses cycle by extending on the market,products’ suchlife while as Spiersrecycling New Technologiescloses the Inc resource (SNT), loop a US-based [9,10]. The provider processes of of “4R” reuse services and recycling (repair, are remanufacturing, complementary to each refurbishing other, and repurposing)and the largest for sustainability advanced battery benefit can packs be reached used in if hybrid EV batteries and electricare first reused vehicles. and However, then recycled. a look at the marketThere also are reveals currently a number a number of of recent established businesses businesses created on bythe established market, such car as manufacturers. Spiers New While manyTechnologies car manufacturers Inc (SNT), a US-based have conducted provider of pilots, “4R” services only a few, (repair, such remanufacturing, as Nissan and refurbishing Renault, have and repurposing) for advanced battery packs used in hybrid and electric vehicles. However, a look launched their second-life businesses. Nissan and Renault have launched brands (XStorage Home at the market also reveals a number of recent businesses created by established car manufacturers. Systems and Powervault respectively) in the household energy storage market and focus on private While many car manufacturers have conducted pilots, only a few, such as Nissan and Renault, have householdslaunched with their solar second-life panels inbusinesses. the UK asNissan their an cored Renault customer have segment.launched brands Moreover, (XStorage a number Home of third-partySystems entrepreneurs and Powervault are respectively) attempting in to the establish household second energy life storage battery market businesses. and focus Foron private example, the start-uphouseholds company with solar Freewire panels Technologies in the UK as their develops core customer portable segment. EV charging Moreover, stations, a number and of Relectrify, third- a start-upparty based entrepreneurs in Australia, are attempting focuses on to batteryestablish management second life battery systems businesses. to squeeze For example, more value the start- out of used batteriesup company and Freewire facilitate Technologies the transition develops of batteries portable into EV acharging second stations, life in residential and Relectrify, solar a start- storage, commercialup based peak-shaving, in Australia, grid focuses support on battery and beyond.management systems to squeeze more value out of used Tobatteries enable theand transition facilitate tothe a transition circular economy, of batteries with into reuse a second and recycling, life in residential specific productsolar storage, designs commercial peak-shaving, grid support and beyond. and business models are required [9]. When transitioning from linear to circular product logics, To enable the transition to a circular economy, with reuse and recycling, specific product designs business models and value chains need to become circular in order to create value and satisfy customer and business models are required [9]. When transitioning from linear to circular product and stakeholderlogics, business needs models sufficiently and value [ 11chains]. However, need to beco whileme circular technological in order to solutions create value are and advancing, satisfy economiccustomer and regulatory and stakeholder aspects haveneeds not sufficiently yet been able[11]. toHowever, provide sufficientwhile technological framework solutions and incentives are for a circularadvancing, economy economic with and slowed regulatory and closedaspects EVhave battery not yet cycles. been able There to provide is notenough sufficient understanding framework of howand companies incentives can for createa circular business economy models with slowed that facilitate and closed a circular EV battery economy cycles. There [12]. is not enough understanding of how companies can create business models that facilitate a circular economy [12]. 1.1. Aim and Scope 1.1. Aim and Scope In this paper, second life of EV LIBs is studied through interviews and workshops with stakeholdersIn tothis provide paper, an second understanding life of EV ofLIBs how is the studied battery through value chaininterviews and relatedand workshops business with models can becomestakeholders more circular. to provide An an illustration understanding of the of how value the chain, battery as value referred chain to and in thisrelated paper, business is provided models in can become more circular. An illustration of the value chain, as referred to in this paper, is provided Figure1. The value chain starts with design and manufacturing. After first life, the battery’s health in Figure 1. The value chain starts with design and manufacturing. After first life, the battery’s health and capacityand capacity are checked are checked to see to if see it canif it becan used be used in ain different a different vehicle vehicle or or in in a a stationary stationary application or or if it needsif toit needs be recycled to be recycled directly. directly. If a second If a second life is life possible, is possible, the batterythe battery is refurbished. is refurbished. Depending Depending on on the batterythe and battery the application, and the application, refurbishment refurbishment can include can include different different processes. processes. FigureFigure 1. The 1. The circular circular EV EV battery battery value value chain.chain. The aimThe of aim the of paper the paper is to is contribute to contribute to to the the ongoing ongoing