Mind the gap: the second life of EV batteries
Where do Tesla second-life batteries go, after they are retired from EVs and before they are ready for recycling?
For a country like Australia, which has pioneered large-scale battery energy storage systems (BESS) with the Hornsdale Power Reserve, it’s a really important question.
Tesla batteries are superb quality. When I oversaw the trial of five Tesla electric taxis stationed at Gatwick Airport in 2019, the fleet completed 1.5 million miles in three years and had 300,000 miles each on the clock, but the batteries were still at 82% state of health (SoH).
Tesla’s warranty covers batteries down to 70% battery SoH and it has announced that it is establishing recycling which usually applies to batteries below 50% SoH.
So what is happening to the batteries that are between 70% and 50% SoH? These are still good for probably five years more life as part of a BESS.
There is increasing demand for second-life electric batteries, as the massive increase in battery storage capacity illustrates.
When the South Australian Hornsdale Power Reserve went live in 2017, it was the largest in the world at 150 MW/194 MWh. But just three years later the Californian Gateway Energy Storage at 230 MW/h overtook it, and the plant planned by Tesla at Moss Landing in California will be a huge 1500 MW/6000 MWh.
All these new giant BESSs are built with new battery packs. But the economies of the car market and BESS market work best with second-life batteries.
Market analysis has demonstrated that in most cases BESSs will be more profitable if constructed with second-life battery cells and the economies of the car market will make it essential to resell the battery.
Being able to demonstrate that your vehicle battery will go on to a long and meaningful second life is also hugely important emotionally and rationally to consumers. It will also be hardwired into the metrics of the vehicles to support environmental credentials, with the data from BESS deals delivering the proof.
Although EVs make up only 0.6% of new car sales in Australia, the fledgling market is dominated by Tesla and the second-life uses of electric batteries will be as important here as everywhere else in the world.
To ensure a second life of an electric battery, you need to know about it. It’s like knowing the service history of a car. The more information you know about the battery, the higher its value.
If you know what the battery has done all its life — its voltage parameters, temperature parameters and C rates — then you are dealing with a known quantity. With this information it is possible to buy the battery with confidence, ‘warts and all’, or to use more modern parlance, in the full knowledge that some fuel cells have failed or will fail, and when.
Altelium is already providing the information to enable vehicle manufacturers to pivot their batteries from EV to BESS applications. Unequal access to knowledge has traditionally skewed markets or held back growth and in this respect the Altelium data is a tech breakthrough, giving equal access to information between buyers and sellers, and with it the ability to access the value in second-hand electric vehicle batteries.
The know-how to drive the circular economy in electric batteries is therefore available, but this comes back to the original question. Where are the batteries?
To be clear, there are few if any Teslas currently going around with batteries at less than 70% SoH but one day there will be many of them. Will Tesla be tracking and contacting the owners of every vehicle over its lifetime? What will receivers’ yards do when they take their first electric vehicle write-offs?
We need to ensure the systems are in place to make the most of these valuable resources which could be especially important to Australia, one of the first countries in the world to harness renewable energy on a giant BESS scale.
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