An afterlife ecosystem for electric vehicle batteries

The iMOVE Second lives for electric vehicle batteries project, researched by Edith Cowan University and commissioned by Insurance Australia Group (IAG) has now been completed and its final report is available for download.

Objectives

Electric vehicle (EV) sales and consumer uptake continues to grow in volume, and as a consequence, so too do the number of EV batteries that must be accounted for.

IAG commissioned this research to help understand how total loss electric vehicles (where the vehicle is deemed to be not repairable after an insurance incident) can achieve their maximum economic value and also their maximum sustainability potential.

The objective of this work is to outline the unique and complex challenges and responsibilities involved in managing end of life (EOL) batteries. The research here also examines the supply chain ecosystems essential for second life opportunities and environmentally aware battery disposal.

The work also outlines business models to help create a more sustainable future and explores and evaluates the economic opportunities these models present.

The current state of end-of-life batteries

The increasing popularity of electric vehicles can be observed worldwide. In 2024 EV sales represented more than 20% of all car sales globally with over 17 million sold. That same year in Australia, EV sales (including Plug-in Hybrid EVs) totalled 114,000, accounting for around 10% of total vehicles sold here.

Forecasts by The International Energy agency are predicting that by 2035 ‘every other car’ sold would be electric.

An EV battery’s first life ends, typically, due to natural end-of-life (end of vehicle life or warranty replacement), battery upgrade or total-loss vehicle scenario.

The global shift towards EV ownership necessitates the evolution of a sustainable supply chain ecosystem that emphasizes second life opportunities as a primary economic and environmental consideration.

Key stakeholders in the EOL EV batteries supply chain

Key stakeholders are made up of a broad range of parties, each responsible for crucial functions in the management of EOL practices. This group includes:

• EV and Battery Manufacturers

Central stakeholders are the EV and battery manufacturers themselves. The most proactive manufacturers are already involved in reverse logistics like reusing and recycling, using existing logistics information, infrastructure, and performance testing processes. The report touches on how Tesla, Nissan and BMW are making inroads here.

• Recycling companies

Specialised companies that recycle and repurpose items like batteries play a critical role in the supply chain. With their advanced technologies, they are able to dismantle batteries and recover valuable components for reuse in new products. These groups face challenges which include potential limitations on the recycling and reuse of complex materials, handling of hazardous materials and establishing viable markets for sales.

• Reusing and Repurposing companies

Specialised companies that focus on extending the life of batteries, either back into a vehicle or onto another purpose, different from their original application. This is an important role for reducing waste as they can support the use of repurposed EV batteries in stationary energy storage systems (ESS), EV charging and other commercial/industrial applications thus supporting grid stability, energy access and sustainability as a by-product.

• Logistics and transportation

Safe and efficient transport plays an essential role in the supply chain. EOL batteries need to be gathered from various collection points and safely transported to recycling and repurposing centres with specialised handling, transportation and safety protocols realised, in order to avoid accidents. The costs of transport are considerable, due to the safety concerns.

• Performance testers

 Performance testers (Battery state-of-health testing equipment) are critical for determining whether a battery is suitable for a second life. These groups measure capacity in order to estimate suitability and remaining lifespan capacity and potential.

• Insurance providers

Insurance providers role sees them responsible for the assessment of crashed EVs and working with salvage companies to auction total loss vehicles.

• Salvage companies

Salvage companies are responsible for the safe storage and auctioning of crashed EVs, including evaluation of battery health.

• EV owners/consumers

Consumer endorsement and consumer participation when it comes to returning or reusing EV batteries is critical as this helps promote sustainability, cost effectiveness and ensures a further market for the batteries.

• Regulatory bodies

Regulatory bodies are essential in order to implement legal and safety frameworks that guide and enforce recycling, repurposing and disposal of EV batteries.

• Research and technology developers

 Research and tech developers are at the forefront helping to establish new modes of material recovery, helping drive forward with recycling efficiency and innovative ways of battery reuse.

Current and emerging sustainable supply chain practices for EOL EV batteries

Current and emerging supply chain practice focus on several key areas, and includes:

• Safe and efficient storage and collection points
• Safe and secure transportation networks
• Recycling centres for material recovery
• Businesses dedicated to battery repurposing
• Testing facilities for thorough evaluation of batteries

The work in the report endorses a unified approach from supply chain partners, along with regulatory frameworks to provide environmentally safe and sustainable practices as vital components for the EV ecosystem.

Adopting circular business models

To employ sustainable and safe practices that help minimise waste and maximise resource efficiency, the researchers posit a circular business model (CBM) should be adopted. This model should employ tactics supporting the reuse, refurbishment, recycling, repurposing and as a last resort, safe disposal of EV batteries.

The work in the report identifies three circular business models that could be employed:

1. Extending CBM: focuses on extending the life of EV batteries past their first life via refurbishment and repair in order to provide a second life use, helping to minimise waste and reduce demand for new batteries.
2. Sharing CBM: employs strategies that help maximise the use of EV batteries. These strategies may include shared ownership, battery as a service and shared ownership amongst others. The focus here on reducing demand for new EV batteries.
3. Looping CBM: a model that involves keeping EV batteries and their materials and components within a looping system in order to retain maximum value.

The report contains several examples of the models in play, the stakeholders involved and the challenges they faced as well as outcomes.

Proposed circular business models for insurance and salvage companies

Insurance and salvage companies face their own unique challenges which has prompted researchers to put forward two alternative circular business models for these businesses (outlined more fully in the report).

1. Full-Service Business Model: partnership between the insurance and salvage sectors.

In order to safely store and test batteries, salvage yards necessarily need to invest in specialised physical infrastructure and an expert workforce. This model would require adherence to comprehensive legislated protocols and employment of a well-trained workforce in order to dismantle, test and store EV batteries for supply to a diverse range of customers.

2. Hybrid Partnership Model: specialised integrated partnerships and collaborations to optimise processes from products through to sale of recycled or repurposed batteries.

This model requires adherence to a comprehensive safety framework with regulated protocols, but sees some processes undertaken by repurposing partner groups.

This sharing of responsibilities and processes, done by capitalising on partner capabilities, helps minimise the need for certain specialised equipment but may potentially yield less profit than the full-service model.

Economic analysis

The costs for managing EOL EV batteries is highly variable and necessitates a thoroughly detailed approach which includes understanding the costs around logistics, testing, repurposing, and recycling.

The decision to recycle or repurpose can be evaluated from an economical perspective. The researchers state that considering current trends and future projections, repurposing EV batteries is deemed more economically viable in the short term, based on the limited financial information available, but recycling may become more viable in the long term.

Conclusions

EV batteries and the second life opportunities they offer throws up complex challenges that require proactive measures and strategic interventions.

Circular business models that feature collaborative partnerships build the best supply chains. Insurance and salvage companies can cement relationships with a circular hybrid model to maximise existing infrastructures and economic benefits. Reusing (reinstalling the battery system back in its original application after an accident where the battery does not need additional components) seems the easiest, most cost effective and sustainable way to limit waste.

Unfortunately, there is a lack of industry practice for installation of EV batteries in this way. This largely under-explored mode for reusage needs direct collaboration with original equipment manufacturers (OEMs) for battery management system (BMS) readouts. The authors note limited partnerships exist in Australia.

Repurposing EV batteries for a secondary life brings opportunity. As Australia transitions towards net-zero, opportunities to use repurposed EV batteries as secondary storage energy systems will increase. In the short term at least, providing EV batteries for repurposing seems to be a financially viable option, based on the limited financial information available.

Recycling EV batteries has higher initial costs due to the handling and recycling processing costs. This coupled with the narrow set of conditions under which profitability is achieved makes recycling of EV batteries less commercially attractive in the short term. Long term however, as more EV batteries hit the market and technologies improve, recycling will become more economically viable.

Recommendations

For EOL battery management, several recommendations can be taken from this work:

• Develop and implement policies to allow better access to battery information
• Develop EOL protocols and industry standards for safe removal, transport and recycling of batteries
• Implement certification programs for recycling and dismantling facilities
• Enhance data sharing by using digital platforms amongst shareholders
• Increase regulatory alignment by working with regulatory bodies to produce frameworks that will limit confusion and promote compliance and transparency
• Invest in training and education
• Create a centralised battery registry to record key information
• Encourage OEM participation
• Incentivise second life and recycling ventures
• Develop specialised insurance products

This industry is evolving, and as sustainable practices and efficient recycling methods change, we may see EOL battery technology influencing market conditions and perhaps offering even more opportunities for players in this sector.

Expected project impacts

As Australia’s largest general insurance company, we can use the research to help us support electric vehicle uptake. We believe the current challenges of End-Of-Life electric vehicle batteries can be overcome through collaboration. We will use the research to bring key parties to the table to find solutions that are economically viable, safe and support sustainability.

Shawn Ticehurst, Head of IAG Research Centre, IAG

The evolving landscape of Battery Electric Vehicles (BEVs) brings both challenges and opportunities, particularly for second-life battery applications. With EV batteries representing substantial value and significantly influencing repair costs and insurance claims, a cross-industry framework is essential. Standardising battery testing, diagnostics, and safe handling practices in Australia will help ease technical and financial pressures on stakeholders, driving more sustainable management of the EV battery lifecycle.

Edith Cowan University team

Download the final report

Download your copy of the final report, EV Battery Next Lives, by clicking the button below.

DOWNLOAD REPORT