Used electric vehicle batteries could meet most of China’s energy storage demand

Published: Updated: Estimated reading time: 3 minutes
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Used electric vehicle batteries could become one of the pillars of China’s energy transition in the future. According to recent research, up to 67% of China’s energy storage demand in 2050 could potentially be met by so-called second-life batteries.

Second-life batteries – huge untapped potential

With the rapid growth of electromobility, the number of decommissioned vehicles is increasing. Traction batteries are usually considered spent when their capacity drops to around 80% of the original value. For drivers, this means reduced range and lower performance, but for the power system, such a battery can still be highly useful.

In energy storage systems, hundreds or thousands of modules operate simultaneously, and charge–discharge cycles are slower and less stressful than in vehicles. As a result, degradation progresses more slowly than in transportation applications.

A research team led by Ruifei Ma from Tsinghua University indicates that, with an appropriate model for using batteries of different chemistries and operating them down to 40% of their original capacity, second-life storage could grow dynamically after 2030. Total energy storage capacity in China could reach up to 2 terawatts (2 trillion watts) by 2050.

For comparison, a scenario based solely on new lithium-ion batteries and pumped-storage hydroelectric plants would achieve only half that capacity.

Economics and sustainability

Earlier analyses were inconclusive – the price of new lithium-ion batteries was falling so rapidly that the economic viability of second-life batteries was questioned. However, with the growing number of decommissioned vehicles and pressure for a circular economy, this model could gain a cost advantage.

Researchers estimate that using second-life batteries could reduce system costs by about 2.5%. This may seem small, but on the scale of China’s power system, it translates to savings of billions of dollars.

Equally important is the environmental aspect. Mining and processing raw materials for battery production—such as lithium, nickel, and cobalt—carry a significant carbon and environmental footprint. Maximizing the use of already manufactured cells reduces pressure on new resources.

First commercial projects

Although energy storage technology using second-life batteries is still developing, initial deployments are already emerging. The American start-up Redwood Materials has launched a 63 MWh project in Nevada, built from ten-year-old car batteries. The installation powers a data center and, according to the company, costs less than $150 per kWh, offering a runtime exceeding 24 hours.

Technological challenges and safety

Mass deployment of this model requires solving several key issues:

  • Cell selection and testing – batteries must be thoroughly inspected and grouped by similar capacity.
  • Advanced management systems (BMS) – otherwise the weakest cell may limit the performance of the entire module.
  • Fire safety – damaged cells require proper isolation, and each cell should be monitored for temperature and voltage.

The risk of overheating and fire is real, so systems must be designed with additional safeguards and redundant control mechanisms.

China as a model for the world?

If these forecasts prove correct, China could become a global leader in second-life battery use in the power system. The scale of the market, the pace of transport electrification, and centralized planning for energy storage investments create conditions for rapid deployment of this concept.

For other countries—including EU nations—China’s experience could serve as an important reference when designing energy storage strategies and circular economy policies in the battery sector.

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