Recycling & Circularity Developed 2024 · C12 4 min
Circular Economy of Batteries: Exploring the Potential of Second-Life Battery Solutions
The shift from combustion engines to electric vehicles is producing a wave of batteries that will reach end of first life after eight to ten years of use. Projections point to roughly 1.7 million tonnes of cell-equivalent battery waste by 2030, and Europe alone could see 6,000 kilotonnes of end-of-life batteries by 2040. Second-life battery solutions, which repair or repurpose packs that still hold around 80 percent of their capacity, offer a way to turn that waste stream into value while making the battery economy more circular.
Two Circular Models, One Practical Choice
There are two main circular pathways. Recycling recovers critical materials such as nickel and lithium for use in new cells. Second-life reuse takes a pack retired at about 80 percent capacity and either reuses it in the same kind of application or repurposes it for a different, less demanding one, such as stationary energy storage. Recycling remains costly and is not yet fully cost-competitive with mining, so the case treats second-life as the more readily implementable route in the near term, and a useful bridge before recycling. Remanufacturing a lithium-ion battery can represent around 40 percent cost savings compared with producing a new one, which underlines the economic logic.
The Partnership and the Location
The case centres on a European EV automaker partnering with a second-life startup based in Spain to handle end-of-life packs and cells with manufacturing defects. Spain is chosen for practical reasons. Energy costs sit in the mid-range of Europe and can fall further with abundant solar, labour costs are mid-to-low at around 18.2 euros per hour, and skilled technicians in renewables, batteries, and power electronics are available regionally. Battery storage regulation is comparatively light on warehousing requirements, which lowers compliance cost, and Barcelona offers strong sea, air, rail, and road logistics. The region hosts several carmakers and battery projects, and state support through a program offering 100 million euros in loans and 200 million euros in subsidies helps fund development. A carmaker partner supplies packs with minor non-conformities along with detailed performance data, which is essential for safe disassembly and quality grading.
The Obstacles to Viability
The model is not without friction. Sorting and testing old batteries is expensive, and as new battery prices keep falling, repurposed packs become harder to sell on price alone. Logistics and transportation of used batteries are complex, safety is a real concern during sorting and reuse, and the absence of standardised data across the value chain makes grading and warranty difficult. A capable battery management system is central to overcoming this: it monitors voltage, current, and temperature, prevents overcharge and overheating, estimates state of charge, and keeps cells balanced, which is what makes a repurposed pack safe and predictable. Standardised, scalable modules and consistent testing protocols are needed to move from bespoke projects to a repeatable business.
What It Means for the Industry
For the automaker, the decision comes down to how deep to go, how much capital and intellectual property to share, and whether EU regulation supports the strategy. The regulatory direction favours circularity, and subsidy programs improve the economics, but the partnership only pays off if the operational problems around sorting, data, and safety are solved. Done well, second-life reduces the carbon footprint of the battery ecosystem, lowers waste-handling costs for the carmaker, and gives the startup a reliable supply of packs. It also creates an option to replicate the model in other countries, subject to local rules, once the process is proven.
Key Takeaways
Around 1.7 million tonnes of battery waste is projected by 2030, with Europe alone facing about 6,000 kilotonnes of end-of-life batteries by 2040.
Second-life reuse targets packs retired at roughly 80 percent capacity and is more readily implementable today than material recycling.
Remanufacturing a lithium-ion battery can save about 40 percent compared with making a new one.
Spain was selected for mid-range energy costs, labour around 18.2 euros per hour, skilled technicians, light storage regulation, and strong logistics.
State support of 100 million euros in loans and 200 million euros in subsidies strengthens the business case.
Falling new-battery prices, costly sorting and testing, complex logistics, safety, and unstandardised data are the main viability challenges.
A capable battery management system is essential to making repurposed packs safe, predictable, and marketable.
Disclaimer: This case study was developed and presented by BatteryMBA participants as part of the Case Study Track. Views, analysis and recommendations are the authors' own. BatteryMBA does not take responsibility for the accuracy or completeness of the content and it should not be relied upon as investment, engineering or legal advice.
This is the public summary, the full case study lives inside the programme
Every BatteryMBA cohort runs the Case Study Track: small teams build the full recommendation, backed by a written document and a live presentation, supported by the BatteryMBA team. Full case study documents are not shared outside the programme. programme.