The ability of battery second use strategies to impact plug-in electric vehicle prices and serve utility energy storage applications

The high cost of lithium ion batteries is a major impediment to the increased market share of plug-in hybrid electric vehicles (PHEVs) and full electric vehicles (EVs). The reuse of PHEV/EV propulsion batteries in second use applications following the end of their automotive service life may have the potential to offset the high initial cost of these batteries today. Accurately assessing the value of such a strategy is exceedingly complex and entails many uncertainties. This paper takes a first step toward such an assessment by estimating the impact of battery second use on the initial cost of PHEV/EV batteries to automotive consumers and exploring the potential for grid-based energy storage applications to serve as a market for used PHEV/EV batteries. It is found that although battery second use is not expected to significantly affect today's PHEV/EV prices, it has the potential to become a common component of future automotive battery life cycles and potentially to transform markets in need of cost-effective energy storage. Based on these findings, the authors advise further investigation focused on forecasting long-term battery degradation and analyzing second-use applications in more detail.