The global second-life electric vehicle (EV) batteries market is on a trajectory of substantial growth, with an anticipated Compound Annual Growth Rate (CAGR) of around 4% during the forecast period from 2023 to 2030. By the end of 2030, this thriving market is expected to achieve a robust valuation of nearly US$9 billion.
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Market Analysis in Brief
Even after completing their primary role in electric vehicles, second-hand EV batteries have a valuable role to play in stationary energy systems powered by renewable sources such as wind and solar energy. Remarkably, lithium-ion batteries used in EVs retain more than two-thirds of their usable energy storage capacity after six to eight years of use. Depending on their condition, these retired EV batteries can extend their usefulness for an additional five to eight years across various applications. Effective recycling and recovery processes are vital in maximizing this extended lifespan. Second-life battery storage systems offer a dependable and cost-effective energy source for urban and rural areas. Furthermore, the enforcement of battery recycling standards and the growing adoption of blockchain traceability platforms are expected to boost the demand for second-hand EV batteries.
Key Report Findings
- Substantial Market Expansion: The second-life electric vehicle batteries market is poised for significant growth in terms of value from 2023 to 2030.
- Driven by Smart Grids and EV Adoption: The industry’s growth is primarily propelled by the installation of smart grid systems and the increasing adoption of electric vehicles.
- Lithium-Ion Batteries Take the Lead: Lithium-ion batteries continue to dominate the second-life electric vehicle batteries market due to their superior performance and energy storage capabilities.
- EV Charging Applications at the Forefront: In 2022, the EV charging category held the largest market revenue share, reflecting the growing infrastructure for electric vehicle charging.
- Commercial Vehicles Lead the Way: In 2022, the commercial vehicles segment accounted for the largest market revenue share, driven by government regulations and the growing awareness of electric vehicles’ role in reducing emissions.
Growth Drivers
- Expanding EV Market: The electric vehicle industry has witnessed significant transformations over the past decade, with electric car sales registering substantial growth and expected to continue during the forecast period. This surge in EV adoption fuels the demand for EV batteries. Recycling and reusing batteries have become essential to address environmental concerns associated with battery disposal.
- Focus on Green Energy: Repurposing second-life EV batteries contributes to waste reduction and helps mitigate the depletion of essential minerals such as cobalt, lithium, and nickel. Lithium extraction, in particular, is known for its environmental impact due to high water consumption. Utilizing used batteries for stationary applications, such as energy storage, offers a sustainable solution to energy needs.
Growth Challenges
- Limited Stationary Applicability: While used EV batteries are suitable for stationary applications, mobile applications demand higher performance in terms of range, energy density, and power capacity. Eventually, batteries reach a point where they are unsuitable for mobile use, limiting their applicability.
Overview of Key Segments
- Lithium-Ion Batteries Lead the Way: Lithium-ion batteries are expected to dominate the second-life electric vehicle batteries market due to their high energy storage capacity and lightweight characteristics. Electric vehicle sales have consistently exceeded expectations, with various manufacturers competing in this space.
- Commercial Vehicles at the Helm: In 2022, the commercial vehicles segment accounted for the largest market revenue share, driven by government regulations aimed at reducing emissions and increasing consumer awareness of the benefits of electric vehicles in emission reduction.
Growth Opportunities Across Regions
- Asia Pacific Secures the Top Spot: The second-life electric vehicle batteries market is expected to exhibit the most significant performance in the Asia Pacific region, driven by the rapid expansion of the electric vehicle market and efforts to meet sustainability goals. China, in particular, demonstrates strong demand for used EV batteries.
- North America Set for Fastest Growth: The North American market is projected to experience the fastest growth, fueled by a strong emphasis on environmental protection and the increasing demand for energy storage systems across various sectors.
Competitive Landscape
Key players in the second-life electric vehicle batteries market include Enel X S.R.L, Nissan Motors Corporation, Fortum, Renault Group, BeePlanet Factory, Mercedes-Benz Group AG, RWE, Mitsubishi Motors Corporation, Hyundai Motor Company, BELECTRIC, BYD Co. Ltd., BMW, Beijing Electric Vehicle, Proterra, Inc., Rivian Automotive, Inc., and Morris Garages (MG).
The global second-life electric vehicle batteries market is poised for substantial growth, driven by the expanding electric vehicle market and the imperative to adopt sustainable energy solutions. Repurposing EV batteries holds great promise in addressing environmental challenges and advancing clean energy initiatives.
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