–Right-to-repair regulations: Their primary purpose is to allow independent technicians to repair EVBs by guaranteeing them access to the information, tools and parts needed to safely complete repairs; this access is also critical to enabling reuse and repurposing, making the right to repair a useful policy lever for enabling second life. Right to repair could also guarantee access to data on SOH and remaining useful life to enable reuse and repurposing. Right to repair should be accompanied by established guidelines for acceptable second-life uses, battery health diagnosis and data sharing as outlined above. –Liability transfer and disposal regulations: Automakers and battery manufacturers are concerned about liability and EOL disposal responsibilities for second-life applications, especially in regions with EPR. Some start-ups may address these safety and liability issues by offering warranties for second-life products. It is also critical to ensure that all second- life batteries are eventually recycled at EOL. Each region should establish its own liability framework and disposal strategy based on its overall EOL management policy and available recycling infrastructure. For example, the EU battery regulation mandates a sales contract between the seller of second-life batteries and the consumer and places liability and EPR requirements on the seller.96 –Incentives: Second-life BESS are often viewed as ideal candidates for repurposing EVBs. As noted above, a recent study has indicated that the levelized cost of energy storage in second-life BESS can reach up to $278 per megawatt-hour (MWh) over a 15-year project period, more than a new BESS’s at $211/MWh.97 The repurposing costs can range from $28 to $36/kWh, compared to recycling costs of $9-$17/kWh.98 Well-designed incentives, informed by the social and environmental benefits, could help align stakeholders and lower overall costs, especially as new battery prices continue to decline with technological advancements and economies of scale,99 while second life usage is nascent. Use material recovery targets and recycled content mandates to encourage recycling. Material recovery targets require certain amounts of the materials in batteries to be recovered through recycling at EOL, which the International Council on Clean Transportation notes is “particularly important to ensure a high recovery of materials for which recycling is not necessarily profitable.”100 Material recovery targets are often accompanied by recycled content mandates, which require batteries to contain a certain percentage of recycled critical minerals. Material recovery targets and recycled content mandates can be effective tools for supporting recycling, but they must be carefully designed to avoid unintended consequences. Policies (such as those pertaining to recovery rates) designed to increase recycling of one metal could inadvertently disadvantage recycling of another metal, which may reduce positive outcomes in the future as battery chemistry, demand and markets evolve. Additionally, recycled content mandates could lead to premature recycling. Outcomes must be consistently evaluated to obviate undesirable market and environmental impacts, especially considering the complexity and evolving nature of the recycling industry. Finally, a focus on critical minerals recycling should not preclude the recovery of other battery materials such as electrolytes and rare earths. Examples of recycled content and recovery targets BOX 5 –In the EU , the Battery Regulation requires lithium-ion EVBs to contain at least 16% recycled cobalt, 85% recycled lead, 6% recycled lithium and 6% recycled nickel by the beginning of 2031. To achieve this, by the end of 2030 all waste batteries must enter a recycling process with a minimum efficiency of 70% in order to recover at least 80% of lithium, 95% of nickel, 95% of cobalt and 95% of copper.101 Civil society organizations and recyclers have expressed concern that the latest draft EU legislation, which explains the methodology for calculating recycling efficiency and recovery rates, creates a loophole that excludes LFP batteries. Considering that 15% of all EVs sold in Europe in 2023 contained LFP batteries, and that this number is expected to increase to 57% of sales by 2030, the exclusion of LFP batteries from the mandatory calculation of recycling efficiency could undercut the impact of this regulation and disrupt the LFP recycling industry.102 –In China , recovery rates are not mandatory, but meeting the targets (98% for nickel, cobalt and manganese, and 85% for lithium) allows companies to qualify for a voluntary certification.103 (An update drafted in 2024 will increase the lithium recovery rate to 90%.)104 Powering the Future: Overcoming Battery Supply Chain Challenges with Circularity 25

Powering the Future 2025