Second-life EV batteries can bolster the energy storage market
Author: Emily Goldfield
Lithium-ion batteries are expected to continue to dominate this market at least until the 2030s. However, global lithium shortages pose a challenge. The cost of lithium has increased 13-fold in the past two years. The majority of raw lithium is being sold for EV batteries, leaving even less supply available for stationary applications. With long timelines for permitting and developing new mines, it will take the mining industry time to catch up to skyrocketing demand. So how can we bolster the energy storage market and improve the economics of integrating renewables into the grid? One possible answer: second-life EV batteries. As the EV market takes off, the supply of used EV batteries is set to increase dramatically. McKinsey estimates the second-life battery supply for stationary storage applications could exceed 200 GWh per year by 2030. While current constraints on the supply of used EV batteries pose a major challenge for the development of the second-life market - as larger volumes of EVs are only now beginning to be sold - addressing barriers to this business model now can enable its success in the future.