This summer I worked with Prof. Stefan Reichelstein and the Energy Business Innovations group. Our project focuses on the economic potential of electric vehicle battery reuse or second-life. The idea for the project stems from the realization that electric vehicles need to retire their batteries once their energy capacity degrades to about 80% of its original value. This fact means that there is a significant amount of energy storage potential if these batteries can be refurbished properly and sold to consumers at the right price point. But determining that price point can be challenging.
Our group proposes that the most economical efficient way to determine the price point is to find the price that equates the levelized cost of energy storage (LCOES) of a second-life system to the LCOES of a new system. LCOES, in general, is highly dependent on factors such as the useful life of the system in years and the degradation in capacity from year to year. In the future, our group hopes to collect and analyze experimental data on retired batteries to fit probability distributions to important parameters and, subsequently, propose a distribution for the fair market value of second-life batteries.
This project has reinvigorated my interest in electric vehicles not only from an economic perspective, but from a perspective of environment and equity as well. Higher salvage values for electric vehicles has the potential to increase their adoption rate and have wide reaching air pollution and climate benefits. As my home state of California moves towards decarbonizing its heavy-duty transportation system, I hope that they keep in mind the lifecycle value of electric vehicles and promote the second life of batteries. Batteries like these could potentially “stabilize” renewable and intermittent power supply in microgrids and ensure all Californians have reliable access to electricity during heatwaves and wildfires. All in all, we should be heading towards a future with a second life for batteries.