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How can we make electric mobility more sustainable? Four circular business models for the reverse logistics of EV batteries

This is an extended version of the article originally published on EIT’s Mobility Innovation Marketplace.

The electric mobility revolution needs its own ‘fuel’ – millions of batteries made up of tonnes of scarce raw materials. Fortunately, unlike oil, this fuel can be kept in the loop. In this article, Bax Battery Circularity Specialist Piotr Grudzień explores several examples of how innovative battery companies create value from circular practices, based on first-hand insights from the partners of the BatteReverse project.

All the business models presented have one thing in common: they harness the power of collaboration to optimise the use of EV batteries.

– Piotr Grudzień, Battery Circularity Specialist

In 2030 alone, Europe will face the task of producing over nine million electric vehicles, which will require batteries with approximately one million tonnes of critical raw materials such as cobalt, nickel, manganese, and lithium. These rare metals, predominantly sourced and processed outside of Europe, pose a major supply chain challenge for the automotive industry, as is the efficient and safe treatment of generated battery waste. It’s estimated that more than 300,000 tonnes of batteries will have to be collected and recycled in 2030, but how can this be done efficiently and safely? The BatteReverse project, an EU-funded initiative launched in 2023, is dedicated to improving the reverse logistics of EV batteries through developing new technologies, optimising existing processes, and setting up innovative collaborations.

As part of the project, Bax has mapped more than 150 key companies in Europe and analysed over 20 stakeholder types, as depicted in the image on the left.

Given that reverse logistics have not yet been standardised, the processes and roles within companies continue to evolve. This creates a dynamic space full of opportunities for both established industrial players, such as original equipment manufacturers (OEMs) and recyclers, and new market entrants, such as start-ups focusing on data management solutions or second-life battery products. The following four business cases present examples of how these key stakeholders are collaborating with other companies to improve battery circularity, whilst reducing costs and generating profits.

No battery should be wasted – sourcing batteries for second life at Škoda Auto

The introductory visual illustrates that battery waste is not solely generated after usage. Currently, most batteries requiring treatment are those discarded during the production phase. This is predominantly because most EV batteries are still on the roads, and it typically takes between 10 to 15 years for them to reach their end of life. This is also the case for Škoda Auto, a car manufacturer relatively new to mass-producing electric vehicles. In line with other EV OEMs, Škoda finds that a certain percentage of their batteries are deemed unsuitable during quality assurance and R&D processes. While these batteries may not meet the standards for new vehicles, they often retain a considerable amount of useful life (over 70%), making them viable for alternative uses, such as stationary storage systems.

That’s why the OEM enters into agreements with various integration partners to explore second-life opportunities for batteries. Pilot projects have shown that, in stationary systems, battery cell capacity diminishes by only about 2% per year, potentially extending battery life up to 15 years. This approach significantly reduces the carbon footprint associated with the entire lifecycle of batteries.

From Škoda Auto’s perspective, each battery that is repurposed for a second life signifies not only a reduction or postponement of recycling costs but also a potential revenue stream. This is achieved through agreements with battery repurposing companies or customers seeking energy storage solutions, such as charging station providers and energy utilities. For these customers, it’s crucial that these batteries are sourced directly from the OEM.

Škoda Auto has comprehensive knowledge about each battery’s State-of-Health (SoH) and history, ensuring reliability and traceability of the battery’s origin. Once these batteries have fulfilled their second life, they can be recycled in accordance with circular economy principles, allowing their raw materials to be reclaimed for new cell production.

Maximising the lifetime of batteries: fleet monitoring by Bib Batteries

Choosing the most effective strategy for retired e-mobility batteries is not always easy. Bib Batteries, a French company, has developed a data-driven solution to this problem. Their algorithm assesses the residual market value of batteries, enabling them to offer battery fleet operators the best solution: repair, second-life usage, or recycling. This system includes a digital registry for technicians to scan and manage fleet batteries via QR codes, facilitating incident reporting and providing specific instructions for repair, second-life applications, or recycling. Managers gain insights from dashboards that display battery metrics, operational needs, and financial indicators, as well as tools for organising battery transport and tracking the economic depreciation of batteries.

Bib Batteries’ value proposition centres on minimising the costs of vehicle operators by assisting in the monitoring and optimisation of their battery fleets, as well as in maintaining efficient maintenance and circular management practices. The company usually offers a more cost-effective alternative to pure recycling, allowing operators and manufacturers to preserve cash flow while responsibly disposing of batteries. Currently, while most of Bib Batteries’ clientele are micromobility operators, the French start-up is expanding its services to include EV OEMs as well.

The core strength of Bib Batteries’ business model lies in its network of partners capable of transporting, repairing, and repurposing batteries. This is complemented by their proprietary algorithms, which are adept at analysing battery data. Bib Batteries implements a monthly subscription model, charging customers based on the number of batteries in their fleet. This provides a consistent revenue stream. Additionally, the company generates income through commission fees earned by facilitating transactions between various entities, such as selling second-life batteries to repurposers.

Giving a second life to spent EV battery modules: repurposing at betteries AMPS

Repurposing spent EV batteries has emerged as a distinct business model, with many innovative start-ups popping up across Europe. While most focus on post-production batteries, like those from Škoda Auto, only a select few tackle the more complex challenge of post-consumer EV batteries.

One such example is the Berlin-based start-up betteries AMPS. This company specialises in creating certified, circular, mobile, modular, and multi-purpose energy storage systems that serve as eco-friendly alternatives to traditional, pollutant fuel-powered generators.

betteries AMPS primarily sources used EV battery packs from the Renault Group. These packs are dismantled into battery modules at Renault’s repurposing centre, the Refactory, located near Paris. Based on their remaining capacity, modules are sorted and upcycled into modular building blocks, called betterPacks. Once the modules are assembled and equipped with a Battery Management System (BMS), these energy systems are connected to a digital business platform, facilitating asset tracking and energy management.

The primary application for betteries AMPS’s second-life products is in remote areas requiring clean and reliable off-grid power, such as developing countries, the film and lighting industry, festivals, and construction sites. Clients value the environmental benefits of these second-life solutions, their ease of use, and the capability to monitor and manage the modules. However, repurposing companies like betteries AMPS often encounter challenges in securing a consistent supply of used EV batteries. Forming partnerships with large OEMs, fleet operators, repair workshops, and dismantlers is therefore crucial for the success of any second-life battery business.

Transforming end-of-life battery packs into commodity-grade materials: recycling at TES

When all other circular options for EVs have been explored, recycling becomes the final step to recover secondary raw materials for new battery production. This process, undertaken by recyclers such as BatteReverse partner TES, is divided into two steps: pre-treatment and hydrometallurgical recycling. In the pre-treatment phase of EV battery recycling, the battery pack is discharged for safety, manually opened, and its modules are extracted. The remaining components are sorted and recycled, with reusable modules assessed based on their State-of-Health (SoH). Modules deemed unreusable are further discharged and segregated, then processed into fine substances. These substances are then separated into steel, plastics, and active materials in the form of a black mass. This black mass is then transported to another facility for hydrometallurgical treatment. This treatment includes a series of sub-processes such as froth flotation, leaching, extraction, precipitation, and crystallisation, to separate the black mass into valuable materials such as lithium, nickel, cobalt, and manganese.

TES operates a service-led business model with additional value recovery opportunities. Customers pay for recycling services, providing a predictable income stream. Revenues are supplemented with value returns from the sale of recovered parts and recycled materials, which are shared with larger, strategic clients. Some other recycling companies rely primarily on selling black mass or secondary raw materials, a model dependent on global demand and market prices of battery materials.

To increase the profitability of these business models, the recycling processes must overcome several bottlenecks. The dismantling of the battery pack is very time-consuming and labour-intensive. That’s why, in BatteReverse, we are exploring human-robot collaboration to automate the process. Another problem is the limited scale of operations.

The number of recycling facilities in Europe is growing but it’s still insufficient to handle the rapidly growing volume of battery waste, leading to a significant portion of black mass being sent to Asia. More hydrometallurgical plants must be deployed in Europe to avoid unnecessary logistics and minimise the carbon footprint of battery treatment processes.

The value of collaboration: the biggest network for battery circularity experts

All the business models presented above have one thing in common: they harness the power of collaboration to optimise the use of EV batteries. Recognising the importance of these valuable connections, we created the BatteReverse Community – the largest network of experts in battery circularity. On the platform, companies, researchers, and policymakers can discuss the most pressing issues in reverse logistics, exchange best practices, and forge new collaborations. The BatteReverse team regularly publishes the most relevant news and insights on related policy, market, and technology developments. Community members have the chance to engage with each other using dedicated topic spaces and connect during our Short Circuit webinar series. If you’ve made it to the end of the article, this means you should join us and contribute to these vital conversations.

Learn more about the work of the Batteries team

We’re helping the battery value chain and the automotive industry implement innovative solutions and business models to maximise value from electric mobility batteries, while minimising their environmental footprint. Get in touch to learn more: batteries@baxcompany.com

Olamilekan Olugbayila
Innovation Consultant
Materials
Energy
Maarten Buysse
Innovation Consultant
Batteries
Materials
Energy
Circular
Philipp Zeng
Innovation Consultant
Batteries