The global EV battery reuse market size was valued at $0.2 billion in 2021, and EV battery reuse industry is projected to reach $3.9 billion by 2031, growing at a CAGR of 34.3% from 2022 to 2031.
EV battery reuse has wide range of applications in the energy storage, as a power source for base station and EV charging stations.
Most of the batteries used in this market are those that do not meet the standards for its application in the EVs. The increase in awareness among the people regarding the impact of battery waste on environment has led to recycling that provides second life for the battery in various other applications.
The battery and vehicle manufacturers have been pushing forward EV battery recycling and reuse in pursuit of more sustainable business models. This is being reinforced by progressive government regulations, such as the recent updates to battery reuse and recycling regulations in Europe. Ongoing trends reveal that recycling is ecpected to be favored over the next 2-3 years. However, in the long-term, second life use applications are anticipated to gain momentum due to technological advances, regulatory clarity, and proven business model.
The rise in sale of electric vehicles (EV) across the globe creates considerable opportunity for stationary storage powered by used EV batteries. In terms of battery type, the electric vehicle battery reuse market can be segmented into lithium-ion batteries, nickel-metal hydride batteries, and lead-acid batteries.
Rise in demand for EV battery in the automotive industry is expected to create significant opportunities for the EV battery reuse market in the near future. The benefits of reusing end-of-first-life batteries are the cost development of new batteries to be manufactured is high compared to battery that are recycled.
Therefore, the different paths of reusing those batteries need to be investigated in order to identify possible economic benefits as compared to that offered by new batteries. The comparison of both price trends is a key factor for the success of reusing batteries, since they would not only be ecologically attractive however also cost-effective.
Energy storage application accounted for over 28% of the market share in 2021. Escalating energy demand owing to the growth in population and shortage of power supply are projected to fuel the of EV battery reuse market statistics during the forecast period. The batteries failing to maintain 80% of total usable capacity are ejected from usage in EVs on account of unfulfillment of performance standards.
The used Li-ion batteries can be utilized as a back-up system, where the power is stored during the normal grid supply and it discharges when there is power outage especially during extreme climatic conditions. The EV battery reuse market is anticipated to grow on account of its ability to power low energy demanding applications as a part of energy storage system.
North America accounted for a significant share of the global market revenue in 2021. The demand for battery reuse across North America is primarily driven by the U.S. and Canada. The North America region has great demand for electric vehicles. The recent surge in the sales of electric vehicles in this region has led to increase in demand for EV battery.
The rise in the sales of batteries has led to the launch of various initiatives by the government to recycle and reuse the standard batteries in various sectors. However, the rapid development in the battery technology and decrease in the production cost of lithium batteries by 97% since 1997 have hampered the market growth. On the other hand, the market in Asia-Pacific is estimated to register the fastest growth rate during the forecast period.