BOX 2 A battery is typically considered fit for use in a new EV for as long as it maintains 80% of total usable capacity and loses no more than 5% of its charge per day when not in use.28 This initial phase of use in an EV is referred to as a battery’s “first life” and typically lasts 8-12 years,29 and potentially 10-15.30 This means that when an EVB no longer meets its original performance specification, the battery still has 75-80% of its usable capacity left.31 At this point it may be “repurposed” (i.e. used in other applications, such as energy storage, which do not require as much power density). There may also be opportunity to “reuse” the battery in another EV under certain circumstances. Together, reuse and repurposing are considered a battery’s “second life.” Second life may allow the battery to be used for an additional 10-20 years beyond its first life.32 Second-life opportunities include: –Renewable energy storage, on and off the power grid: Repurposed batteries can store renewable energy for later use – e.g. storing solar power for times when the sun’s not shining – providing reliable electricity and grid flexibility while lowering emissions. Second-life batteries can also be used for off-grid energy storage in the form of standalone microgrids or other distributed energy resources, which can increase access to electricity in regions with limited electricity infrastructure.33 –Grid stabilization: Repurposed batteries on the electric grid can help a utility maintain power reliability and displace more expensive, less efficient, ageing assets that are currently used to maintain power reliability,34 thereby accomplishing the same goal for lower cost and with lower emissions. This opportunity may be particularly beneficial in the Global South. For example, a 2023 study by the University of California, Davis, highlights the potential for second-life batteries to be used as backup power and off-grid energy storage in Kenya, which experiences power outages, and concludes more generally that second- life batteries could provide a more affordable energy storage solution for lower- and middle- income countries.35 –Expansion of EV charging infrastructure: Repurposed EV batteries may be used directly in EV charging infrastructure to provide supplementary power to fast chargers.36 Additionally, by stabilizing the grid, providing renewable energy storage and increasing access to electricity, second- life batteries can enable development of EV charging infrastructure and help balance grid loads from EV charging. –Reuse in EVs: EVBs are being designed for increasingly longer lifetimes – sometimes as long as one million miles or 15 years.37 This increases the probability that EVs will retire before their batteries reach the end of their useful life. (For reference, passenger cars in the US typically last 12-15 years.38 The average driver in the US drives 13,500 miles a year,39 meaning it would be several decades before an EVB reaches one million miles. In countries with lower average driving rates, the battery may outlast the vehicle even further. As a result, there may be potential for EVBs to be reused in other EVs.) Additionally, a used EVB may be suitable for use in another EV with lower range requirements. On a global scale, the supply of second-life lithium-ion batteries could exceed 200 gigawatt- hours per year by 2030,40 and the second-life battery market could surpass $7 billion by 2033.41 Giving EVBs a second life Powering the Future: Overcoming Battery Supply Chain Challenges with Circularity 14

Powering the Future 2025