Dive Brief:

• Toyota is launching a residential 5.5 kWh battery storage system, which uses the company’s electric vehicle battery technology, the company announced on June 2. The small system can power a home day and night when connected to a photovoltaic rooftop system, encouraging solar installations, according to Toyota.
• Homeowners with EVs capable of bidirectional electricity flows can provide supplemental power to their homes, including during outages. The storage system’s vehicle-to-grid capabilities also will provide “balancing in places where the grid system allows bidirectional charging,” providing power at “times of high energy use,” Toyota said in a press release.
• Initially, the storage system will only be sold in Japan. Whether Toyota will expand sales to other countries and become a serious competitor to Tesla remains to be seen, according to storage experts. The company did not respond to multiple requests for comment.

Dive Insight:

Sales of Toyota’s new home battery, the O-Uchi Kyuden System, to builders and general construction companies will start in August, the company said. Toyota’s entry into this market is not surprising given earlier entries by Tesla, with its popular Powerwall, and other EV companies, such as BMW, according to storage experts.

“Toyota’s announcement is one more indication of a larger trend,” said Jason Burwen, American Clean Power Association vice president of energy storage. “Electric vehicle makers see themselves not only as new stakeholders in the power system, but also increasingly as new players in that system as providers of energy storage — whether in supplying battery systems directly to homeowners, businesses and utilities, or in enabling their vehicles to interact with the operations of buildings and the power grid,” he added.

Toyota’s new distributed storage system uses its “many years of electrified vehicle development as well as on-board parts and units,” the company said. The system can be charged by solar panels and provide additional power from electricity stored in EV batteries, at 100V AC, including when the lights go out, Toyota said.

What is not known is the home battery’s price or if the company will be able to reuse EV batteries taken out of its cars because of wear and tear from daily driving. While these discarded batteries do not hold a charge over as many miles as do new ones, they have substantial life in them that’s suitable for energy storage, according to the California Energy Commission. Generally, second-life batteries have about 70-80% of their power remaining, and energy storage is far less demanding on batteries than driving, according to CEC commissioned studies.

The number of discarded EV batteries is soaring with the rise of electric car and truck purchases and reusing them for storage would diminish the mountain of dumped batteries. But reuse comes with key challenges, principally related to cost, said Jim Greenberger, executive director of NAATBatt International, a nonprofit trade association working to advance electrochemical energy storage technology for emerging, high-tech applications. 

“There is ultimately a cap on second-life batteries because of their recycling value,” which has risen with the war in Ukraine, he added.

The rising costs of nickel and cobalt, in particular, are driving more battery recycling, as well as that of lithium, the extraction of which is more difficult. If it costs $100 to enable the reuse of EV batteries in a storage system, the company must make more than $100 on the reuse, Greenberger pointed out.

In addition, reuse is more complex but that has not stopped Toyota from supporting it. And if anyone can make second-life batteries economically viable, it is Toyota and other major car makers. “Massive and repetitive reuse in the same application will bring down the costs,” added Greenberger.

The push to reuse batteries is increasing in and outside of Toyota. In January, China, a major market for Toyota, issued a series of directives to expand battery reuse and recycling industries, Electrive reported. In May, Toyota Motors partnered with a joint fuel-procurement venture between Tokyo Electric Power and Chubu Electric Power, to turn old batteries taken out of EVs and hybrid vehicles into power storage systems to mainly be combined with renewable energy generation facilities, Nikkei Asia reported. And back in 2018, Toyota and Chubu Electric Power Co. announced an agreement to verify large-capacity storage battery systems that reuse and recycle Toyota batteries.

Toyota, and other big EV companies, not only have considerable ability to drive down the cost of EV battery reuse, they also closely guard their batteries’ proprietary information. Toyota’s use of its own second-life EV batteries may not only drive down the costs but it would keep it from having to share its secret battery technology with startups and other companies working to reuse EV batteries for energy storage, Greenberger pointed out.