IDTechEx: 2nd-Life EV Battery Market to Hit US$4.2bn by 2035

A recent market report by IDTechEx, titled "Second-life Electric Vehicle Batteries 2025-2035: Markets, Forecasts, Players and Technologies," highlights the transformative potential of second-life EV batteries.

The report projects that the market value will grow to US$4.2bn by 2035, driven by the increasing availability of retired EV batteries and advancements in repurposing technologies.

The lifecycle of EV batteries

Li-ion batteries in EVs typically last between six and 15 years, depending on usage and degradation rates. Once a battery's capacity—or State-of-Health (SOH)—drops below the level needed for adequate driving range, it is retired. At this point, batteries can either be recycled to recover valuable raw materials or repurposed for second-life applications.

Conrad Nichols, Senior Technology Analyst at IDTechEx, explains: "These batteries could be recycled to reclaim critical and valuable raw materials, which could be reintroduced into new EV battery manufacturing.

"However, they could also be repurposed for second-life applications prior to recycling. It has the potential to maximise their value, extend their lifetime, and contribute to a circular Li-ion battery economy."

Key applications for second-life batteries

Second-life EV batteries are well-suited for applications that require lower performance thresholds. These include:

• Stationary battery storage: Supporting renewable energy systems.
• Backup power: For telecom towers and critical infrastructure.
• Electromobility applications: Such as powering scooters and rickshaws.

In China, second-life batteries are already being scaled for backup power use. Meanwhile, Europe sees significant adoption for commercial and industrial (C&I) applications like renewable energy optimisation, peak shaving and EV charging.

Challenges in repurposing batteries

While the second-life battery market shows promise, challenges remain.

"The reducing price of first-life Li-ion battery energy storage systems (BESS) has made it increasingly difficult for repurposers to commercialise and/or offer their systems at competitive prices," Conrad notes. 

Repurposed batteries, which inherently degrade during their first life, must be offered at lower prices than first-life BESS. Advanced battery grading technologies could help address cost challenges by streamlining repurposing processes and reducing logistical inefficiencies.

Market outlook and innovations

The future of the second-life EV battery market will depend on several factors, including policy, technology and collaboration. For example, innovations like cell-to-pack (CTP) battery designs improve energy density but complicate disassembly for repurposing.

Policy shifts are also shaping the market. The EU Battery Regulation, for instance, has begun recognising the value of repurposing batteries, though more incentives are needed to prioritise reuse over recycling.

Promising developments include the rise of business-to-business (B2B) battery marketplaces and advanced testing technologies, which streamline the acquisition and evaluation of retired EV batteries. 

"Repurposers will face challenges," acknowledges Conrad. "However, factors like emerging B2B marketplaces and advanced end-of-life battery testing technologies could help repurposers scale their businesses and aid in second-life EV battery market growth."

Comprehensive market insights

The IDTechEx report offers a holistic view of the market, including:

• Forecasts and analysis: 10-year market projections for installations, applications and market value across regions.
• Techno-economic insights: Cost comparisons between second-life and first-life BESS.
• Company profiles: Details on more than 30 players, including repurposers and advanced battery testing firms.
• Regulatory landscape: Examination of policies in the EU, US and China, including impacts of the EU Battery Passport and extended producer responsibility (EPR).

A circular economy for batteries

Ultimately, the report highlights the growing importance of collaboration between automotive OEMs, repurposers and policymakers to create a circular economy for EV batteries.

By extending battery life through repurposing and maximising their value before recycling, the second-life EV battery market holds immense potential for sustainable growth.

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