Dive Brief:
- Tech group Wärtsilä and Hyundai Motor Group on Tuesday announced a partnership to develop uses for second-life electric vehicle batteries, which are expected to begin flooding the energy storage market within a decade.
- The companies say their partnership will help develop a market for advanced energy storage systems utilizing used EV batteries in utility-scale and commercial applications.
- There is growing interest in repurposing used electric vehicle batteries, particularly as the sector is expected to begin gaining traction. Daimler and its Mercedes-Benz Energy subsidiary have turned a former coal plant in Elverlingsen, Germany into an 8.96 MW, 9.8 MWh energy storage facility that also stores replacement EV batteries.
Dive Insight:
As electric vehicles take hold, eventually used batteries will begin to pile up. They may not be suitable for transportation any longer, but storage developers say they can still be used in grid applications ultimately helping maintain reliability and add renewables.
According to Hyundai, in 2025, there will be 29 GWh of second-life EV batteries available, "far exceeding the size of today’s stationary storage market," which it estimates as about 10 GWh.
In the United States, EVGo is testing installations of used vehicle batteries at charging stations, using them as stationary storage to avoid demand charges — generally considered the bane of charging business models.
"Energy storage is the logical next step in the after-market use of EV batteries," Hyundai Executive Vice President Youngcho Chi said in a statement. "By repurposing resource-intensive products like EV batteries, we eliminate disposal costs and extend the value of the R&D investment that goes into manufacturing the technology."
The two companies want to see their partnership create a growing business and market for advanced energy storage systems, ultimately developing a global supply chain that leverages manufacturer relationships "to take a holistic approach from battery manufacturing, EV applications and energy storage redeployments as well as recycling of materials."
Automakers moving into the EV market see a growing stockpile of energy storage assets and want to develop revenue streams around them.
Two years ago, automaker Daimler hired Boris von Bormann, a former top executive at Sonnen, to launch Mercedes-Benz Energy Americas to market batteries to residential, commercial and utility consumers. The company's Elverlingsen storage facility, with 1,920 lithium-ion batteries, is a warehouse for electric vehicle batteries that also provides revenues from the batteries while they are being stored.
