Repurposing EV batteries for grid storage

The job of an EV battery is unforgiving. If its performance slips too far — say, lost acceleration or range — it's probably off to the recycling heap. That’s even though it may have plenty of usable life, if only for something less demanding than powering a vehicle. Grid storage is theoretically a gentler job, involving slower discharging and more careful management. Still, repurposing isn’t easy. It requires dealing with a mishmash of various makes, models, and levels of quality. And it means competing against the falling price of new, purpose-built storage systems. But a few companies have said they’ve figured it out, including Redwood Materials, which supplied a second-life data center microgrid this year. So how does second-life storage on the grid actually work? In this episode, Shayle talks to Colin Campbell, chief technology officer of battery recycler Redwood Materials. Colin explains how, in just the past year, the company has found cost-effective ways to repurpose batteries before recycling them. Shayle and Colin cover topics like: What has changed to make repurposing profitable, including better software management and high-volume, low-cost supply Why, for Redwood, second-life batteries only need a short lifespan to be worth it Why second-life systems are especially well-suited for long-duration storage What it takes to compete with the falling prices of new LFP systems Resources: Latitude Media: Crusoe and Redwood Materials are powering a data center with old EV batteries Latitude Media: Millions of EV batteries could retire on solar farms Latitude Media: The challenging economics of battery recycling Credits: Hosted by Shayle Kann. Produced and edited by Daniel Woldorff. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor. Catalyst is brought to you by Anza, a solar and energy storage development and procurement platform helping clients make optimal decisions, saving significant time, money, and reducing risk. Subscribers instantly access pricing, product, and supplier data. Learn more at go.anzarenewables.com/latitude. Catalyst is supported by EnergyHub. EnergyHub helps utilities build next-generation virtual power plants that unlock reliable flexibility at every level of the grid. See how EnergyHub helps unlock the power of flexibility at scale, and deliver more value through cross-DER dispatch with their leading Edge DERMS platform by visiting energyhub.com. Catalyst is brought to you by Antenna Group, the public relations and strategic marketing agency of choice for climate and energy leaders. If you're a startup, investor, or global corporation that's looking to tell your climate story, demonstrate your impact, or accelerate your growth, Antenna Group's team of industry insiders is ready to help. Learn more at antennagroup.com.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Speaker 00

  Latitude Media, covering the new frontiers of the energy transition.

• 0:07Shayle Kann?

  I'm Shayle Khan, and this is Catalyst.

• 0:11Speaker 02

  So we do a very brief electrical inspection, something like five minutes, and we literally wheel it out to the field where we have a spot for it and plug it in.

• 0:23Shayle Kann?

  Coming up, second life batteries get reincarnated, so to speak.

• 0:36Speaker 00

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• 1:19Speaker 00

  build market leadership, and become category-defining brands. From breakthrough startups to global industry leaders, their team brings the expertise, relationships, and track record to accelerate your momentum. Learn more at antennagroup.com.

• 1:34Speaker 03

  The power plant for the modern grid isn't a building, it's a network. Energy Hub's DRMs platform connects batteries, EVs, thermostats, and commercial and industrial sites into virtual power plants that over 230 utilities dispatch as reliable grid capacity day in, day out. VPPs deploy in 60 to 100 days at 40% to 60% less cost than traditional infrastructure, and they perform like conventional generation from day one. Learn about the flexibility platform for the modern grid at energyhub.com.

• 2:10Shayle Kann?

  I'm Shayle Khan. I invest in early-stage companies at Energy Impact Partners. Welcome. Okay, so as I'm sure Catalyst listeners know, end-of-life batteries, particularly those coming from electric vehicles, are not really end-of-life. Batteries don't usually fail, they just degrade over time. And so when the battery reaches the end of its useful life in a vehicle or in something else, it's still got a lot of value. But the question is, what is the highest and best use of it at that point? One option is refurbishment and putting it back in a vehicle or its original application, which makes sense in some very limited cases, but not usually. So that leaves two other options. One, you recycle the battery for materials and minerals. And the second is

• 2:54Shayle Kann?

  you repurpose the battery, usually as a stationary energy storage asset on the grid. There's an economic calculus to the decision between these two that has a bunch of variables: the current value of the materials themselves, the actual processing technology, the cost of new stationary batteries, et cetera. And you might think that there's a right answer, and indeed, many people do. And generally, historically, that right answer has been recycling for materials. But that's why I found it interesting when Redwood Materials, which is a company founded by Tesla founder JB Strabill and best known as a battery materials recycler, announced a new division called Redwood Energy, where they're focused on stationary storage. So that means they're going to take in end-of-life batteries and send them into one of two streams: either materials

• 3:39Shayle Kann?

  recycling or repurposing for grid energy storage assets. So what underlies that decision tree? And what is it that unlocked the possibility of an economic second-life battery on the grid? Well, who better to answer that than Colin Campbell, himself a longtime Tesla veteran, but now the CTO at Redwood? Also, before we begin, I'm hosting another Ask Me Anything episode, where I answer your questions, big and small, about climate tech, the energy transition, investing, et cetera, et cetera. Just email us if you want to ask a question. Thank you to all of you who have already submitted many great questions. We have room for more, so hit us at [email protected]. That's [email protected]. And for now, here's Colin.

• 4:25Shayle Kann?

  Colin, welcome.

• 4:26Speaker 02

  Shale, it's a pleasure to be here.

• 4:28Shayle Kann?

  Excited to finally have you on and to talk about what to do with end of life batteries, the various things that you can do with them. Maybe start by talking to me about, from just a technical standpoint, like you get a end of life battery, I guess you tell me it probably varies based on the type of battery and the application, but I don't know, take an EV battery, for example, like what state is it in when it rolls up into your factory? And what are the, what are the technical parameters that you're looking at to determine its condition?

• 5:01Speaker 02

  Yeah, I think the state of the batteries that we receive, the old electric vehicle batteries, it's, it's better than you might think. Those things are incredibly highly engineered, durable objects. So from a physical perspective, they're usually almost new. And then from an electrical and electrochemical perspective, we receive them when a customer might get frustrated with them typically. So that's something like, I've lost 20% of my range, or the acceleration isn't what it used to be, something like 20% increase in impedance, 20% decrease in capacity is, is typical for what we see.

• 5:41Shayle Kann?

  And then how different is it if it's not an EV battery? Like if you're taking, I don't know, consumer products, batteries and things like that? Cause I know you guys get a pretty wide variety of in streams incoming.

• 5:52Speaker 02

  It's a real, it's a real fantasy land, if you're a battery nerd, to look at the stream of things that we get, it's literally everything under the sun, you know, ear pods, toothbrushes, power banks, and those, they're so varied, there's so many of them, and they're so difficult to reintegrate into a second life system. That's not something that we've looked at very closely, to be honest.

• 6:15Shayle Kann?

  Okay, so as we talk about second life, predominantly right now, we are talking about EV batteries.

• 6:20Speaker 02

  Yeah, that's right.

• 6:21Shayle Kann?

  Okay, and then I guess let's talk about chemistries for a second. Presumably what you're getting, if it's an end of life EV battery, these are NMC chemistries that are coming in mostly?

• 6:34Speaker 02

  Today, they're predominantly NMC. You could think of it as what we get is what was built roughly 10 years ago. So we're time shifted from the manufacturing trends.

• 6:46Shayle Kann?

  Right, okay. And then so here's my, the core thing I think is interesting and I want to understand, right? Like so Redwood, you've been taking in all these, these end of life batteries for, for a few years of various kinds, but including the EV batteries and historically mostly recycling them for the material value. Now you are doing that sometimes, but sometimes refurbishing them and turning them into stationary storage assets. So talk to me at the high level through the calculus, like you get an end of life battery that comes in the door. What determines which path makes sense?

• 7:25Speaker 02

  Yeah, we do a pretty brief inspection. So there's a mechanical one and then there's an electrical one to check the health of the pack. So things like cell balance, impedance, you know, are all of the internal electronics still functioning and reporting out very detailed diagnostic data about the pack. And what we found is that if all of those lights are green, 95% of the time, the pack is going to be usable for grid scale energy storage. So it's a pretty brief inspection, honestly.

• 8:01Shayle Kann?

  So there's the question of, I guess what you're answering right now is can you use it for grid scale energy storage? But the other question is, should you, right? And, and that is an economic question, I guess, partially a technical question, because in either case, you have work to do. You can't just like, put the battery back out in the field and you can't just, it's not automatically recycled into materials. So how do you think about the economic question, I guess, of which makes more sense to do?

• 8:31Speaker 02

  When you think about the economic value of these packs, it's, they don't need to have as much life left in them as you might think in order to

• 8:41Speaker 02

  Makes sense to put back on the grid. So we've since we have developed a really low cost, hot swappable way of putting the packs in, the cost of integrating the packs to the grid itself is really low, the install cost, the swap cost. And so the amount of usable life that's left in a pack doesn't need to be that high in order for it to really be valuable and economically profitable to put back on the grid, given the value of the grid services that these storage sites are providing.

• 9:13Shayle Kann?

  I guess that the one of the questions that I imagine is embedded in there is, okay, so in one path, which is the one that you've done more of historically, you break the battery down and you get a bunch of useful materials out of it, you get the cathode actin, or you reproduce cathode active material, you get the anode material and so on. And so there, the value you're able to derive from your end of life battery is a function of the the price you can yield in the market for those materials minus your reprocessing cost, presumably. In the other context, it is how much value is there on the grid for doing the stationary

• 9:57Shayle Kann?

  storage asset minus, again, your sort of refurbishment cost. And you're competing against different things. In one case, you're competing against like a new cathode active material. In the other case, you're competing against new, let's say, LFP packs. Right. And which is a has, I mean, outside the US has been a falling knife of a cost, but in the US is a little more complicated because of tariffs and various things. But to a first order, like from a first principles perspective, all else equal, would you rather just refurbish the battery to put it on the grid than to break it down to its constituent materials? Is that the right way to think about it? And you should only do the latter thing if either

• 10:43Shayle Kann?

  The battery is incapable of being put back on the grid because it doesn't work in one way or another, or because you're in a, we're in a market where like cam prices have spiked or something?

• 10:53Speaker 02

  Yeah, we don't have to choose, right? So we typically will do both. We will send a battery out to a grid scale energy storage site to provide grid services when that is economically sensible, which is 95% of the time. And then we will go on to recover the metals value from it. So it's additive. We think of it as a detour. You know, we can put these batteries out to a grid storage pasture for a little while to really extract all of the energy storage and power delivery value that they have, and then go on to recover the critical minerals from them and regenerate fresh cathode materials.

• 11:34Shayle Kann?

  That gets to another question, I guess, which is how much of a useful life do you expect there to be for the grid storage asset? You've already had a 10-year useful life in an EV. It's down to 80% capacity or something like that. Now you stick it on the grid. Is it another 10-year useful life? Is it less? Is it more?

• 11:53Speaker 02

  The life of the second life battery on the grid is, it's certainly long enough to be economically valuable. And that, in order to make economic sense, it's really one or two years, hundreds of cycles, low hundreds of cycles.

• 12:09Shayle Kann?

  So for that to be true, it must be remarkably cheap to deploy, right? Because you're up against a new LFP project, let's say, energy storage project, where I don't know what the current price is, like fully delivered, but like a couple hundred bucks a kilowatt hour, probably, something like that. But that has a 10-year life, or 10-year warranty life, anyway. And so presumably what you're saying is that, look, take an end-of-life NMC battery, you get it very, very cheap, if not free, and then you have some cost you bear in the, which I want to talk in a second about, like what you actually have to do to it.

• 12:51Shayle Kann?

  But you have some cost you bear in turning it back into an asset you could put on the grid. That cost must be so low. That the total installed cost of the Second Life ESS battery is like significantly below the cost of a new de novo LFP battery today?

• 13:11Speaker 02

  Yeah, I mean, you've you've nailed it. I was, to be honest, always a little skeptical about Second Life energy storage as as a thing in the world. I was like, how can this possibly compete with a purpose-built product that's really optimized for the application? And I think it's only started to make sense in the last year from the volume of packs that are coming back. And then the other thing is, we have put together, like you said, a really simple, straightforward, low-cost way of integrating these packs that were originally designed for another purpose back into the grid. And doing that very simply, very cheaply, is is central to doing this well, I think.

• 13:55Shayle Kann?

  All right. So walk me through that process. So you get you get an end-of-life NMC battery off of an electric vehicle. What do you have to do to it?

• 14:04Speaker 02

  So we do a very brief electrical inspection, something like five minutes, cell balance, impedance check. And we literally wheel it out to the field where we have a spot for it and plug it in. So we are not opening up the packs. We are not removing the modules. We are really using them as they were installed in the car. You could think of it really as a giant parking lot for electric vehicles, except there's no wheels. It's just the packs and the power electronics that went with it.

• 14:38Shayle Kann?

  Wait, so where's the innovation? I mean, that makes it sound like you like literally anybody could just take an end-of-life pack and plug it into the grid and be done. What's what's new here? What did you have to do?

• 14:48Speaker 02

  You need to be really thoughtful about the high-power electronics design to integrate an incredibly wide variety of packs, to talk to an incredibly wide variety of packs, to sensibly dispatch each one of them as part of an integrated energy storage asset to optimize their value. The mechanical design of the site itself to keep it low cost is not that straightforward. And these are all things that that we think we've done really well.

• 15:20Shayle Kann?

  So it's power electronics and software, basically. Like, to a first order from a physical standpoint, You're just plugging a bunch of disparate batteries into one system to make it operate like a single cohesive grid scale energy storage asset. There's some magic in the

• 15:41Speaker 02

  Power conversion, software, exactly, coordination, all of those things. Also, it's not that simple to collect a whole bunch of packs like this. So this business is one that really makes a ton of sense at Redwood, you know, where we are already collecting north of 80% of the end of life EV packs across the nation. That's not a small feat to have the feedstock available. It's really heterogeneous. It comes from a million different places.

• 16:12Shayle Kann?

  Right. Yeah, I mean, just having the feedstock is clearly a big advantage for you there. I mean, maybe that gets to this next question, which is how much of this can we expect? I mean, you know, battery recycling in general has always been this interesting game of like, as you said, you're 10 years behind, at least with EV batteries. And so we're today recycling the volume that we deployed 10 years ago. And so I feel like, I mean, you probably know the EV adoption curve a little better than I do, but it feels like the sort of inflection came less than 10 years ago, like somewhere in between. So like the real ramp in volume

• 16:53Shayle Kann?

  of end of life batteries you would have available to do this with seems like it's coming sometime in the next five years or something like that. So how much volume do we see now? How much volume might we see? And like, if you step back, how big a player in the ESS game do you think this can and should become?

• 17:14Speaker 02

  Those are exactly the right questions to ask. The future is preordained here, right? These packs were manufactured a decade ago. We know, we can predict how much energy is going to be available for this and at what time. So today, it's on the order of 5 gigawatt hours a year that's coming off the road.

• 17:35Shayle Kann?

  Globally or in the US?

• 17:36Speaker 02

  US.

• 17:37Shayle Kann?

  US, 5 gigawatt hours? Okay.

• 17:39Speaker 02

  And it's on the order of 150 gigawatt hours a year new EV production that's going into service.

• 17:48Speaker 02

  And then I think the battery energy storage that was deployed in the US last year was on the order of 50 gigawatt hours. So already coming off the road today is a tenth of what's being deployed.

• 18:01Shayle Kann?

  Is that 5 gigawatt hours rated, right? Or is that 5 gigawatt hours available?

• 18:06Speaker 02

  Great questions. That would be the

• 18:08Shayle Kann?

  Rated probably.

• 18:09Speaker 02

  Brand new.

• 18:10Shayle Kann?

  Yeah.

• 18:10Speaker 02

  Capacity. So even though if you discount it by, call it 50%, be really conservative, call it 70%, be extremely conservative, it's still gigawatt hours a year of useful energy that's available for second life energy storage.

• 18:30Speaker 00

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• 19:15Speaker 00

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• 20:39Shayle Kann?

  Do you think that the, assuming that these economics all continue to hold, does it end up being that for Redwood, where you get a heterogeneous stream of incoming end-of-life batteries, and then you have these two different places you can send them, does it mostly end up being that the EV batteries primarily get deployed as second-life assets on the grid and the non-EV batteries all get sent to material recycling? Like, is that sort of where we land here eventually?

• 21:13Speaker 02

  I hesitate to commit to that because I have this constitutional distaste for throwing anything away that still has useful life left in it. We're starting with what is easiest and most sensible, which is full EV packs. Will we ever get to old toothbrushes for grid-scale energy storage? I really doubt it. That seems unlikely to happen. But somewhere in between, I think there's probably a happy medium. Maybe it would make sense to repurpose big power banks, you know, kilowatt-hour-scale power banks in this kind of application. That's a ways away. I think the other thing that's important to look at is just the sheer manufacturing volume. Like, look at the front end of the pipe.

• 21:56Speaker 02

  I think it's something like 80% of the energy storage is going into EV. So that's where most of the gigawatt-hours are going to come out.

• 22:07Speaker 02

  Which is really good for grid storage because those are the packs that are going to be easiest to redeploy. Those are the most robustly engineered packs that have a ton of useful life left in them.

• 22:18Shayle Kann?

  Speaking of which, from a chemistry perspective, as we mentioned, right, what you're recycling now are mostly NMC batteries because they're 10 years old. As we look forward, you know, we'll start to see LFP EV batteries start to get recycled as well. Is there any meaningful difference from your perspective, either in the economic calculus of like what you can get out of that battery at end of life, or in the technical process you have to run through between different chemistries or among different chemistries?

• 22:50Speaker 02

  I'll start with the technical process. We're totally agnostic to chemistry type. So because of the power electronics that we've developed, we can really easily integrate

• 23:03Speaker 02

  low-capacity, high-capacity, high nickel, LFP, new, old, low voltage, high voltage packs, whatever it is, we're ready to plug it in. From an economic perspective, the economics are different for LFP, but they still solve. The metals values are lower, the cycle life is different, the degradation is different, the energy value is different, but it still makes sense to deploy them on the grid, used LFP packs.

• 23:33Shayle Kann?

  So the one thing we haven't talked about is like what applications on the grid make sense for these second life energy storage assets. How do you think about that? Should we think about it just like the exact same thing as a new LFP pack that we're deploying on the grid, or is there a distinction?

• 23:52Speaker 02

  There's a distinction. We can certainly play in the two-hour, four-hour markets with repurposed EV packs, second life packs, where we see them really starting to shine, though, is in the longer duration. Markets, so four hour, eight hour, maybe longer, maybe 20 hour. And that's because when you are using these packs at much lower than their rated current, when you're discharging them more slowly, you can tolerate more than you could at the high C rates. So an impedance imbalance, things like that become less relevant. And so we find it makes more sense to deploy in places with high energy

• 24:37Speaker 02

  and somewhat lower power than what you might see typically.

• 24:41Shayle Kann?

  When you say you could tolerate more, what do you, what does that mean technically?

• 24:46Speaker 02

  Yeah, so like, what, what does capacity fade look like in an EV pack? Right. One of the things is cell imbalance. You know, you have 100 battery cells stacked up in series. One of them gets a little old, gets a little weak. And so when you try to accelerate onto the freeway, that cell has to be limited. We have to protect the weakest cell in the link. And so you can't get the full power out. You can't get the full capacity out, in fact, at those discharge rates. But when you're discharging it more slowly, in some sense, that weakness is much less relevant to the performance of the pack.

• 25:24Shayle Kann?

  Which would be true of not just second life packs, right? That's true in general. If you operate at a lower C rate, you can, it's easier to manage, right? So what's distinct here is that you probably have more cells that are tired, so to speak, at end of life than at the beginning of life. But the reason why we don't generally do 20 hour lithium ion de novo projects on the grid is an economic one, right? It's just cost, scale, kind of linearly.

• 25:57Speaker 02

  Cost of energy.

• 25:57Shayle Kann?

  Right, with duration. Is that equation, is that not true with these second life packs? Or is it just that it is so cheap, you can afford it?

• 26:06Speaker 02

  That's probably the best way to think about it. We can go toe to toe with brand new.

• 26:13Speaker 02

  Lithium ion packs in the four hour market and the two hour market using second life packs. But where it really starts to shine and where you really start to see, I think, just a beautiful reuse is where you have way more energy. And I think you framed it well, which is it's because the cost of that energy is lower.

• 26:35Shayle Kann?

  Right. It's not a fundamentally different equation. It's just that it's cheap enough. You can stack a bunch of things to make a eight hour, 12 hour system, whatever it is.

• 26:46Speaker 02

  Yeah, if you are able to, you know, integrate all of these disparate pack types, which again, I don't want to trivialize that. It's it's some engineering work to get all these things to play nicely together. Then there's a ton of useful life left to be recovered.

• 27:02Shayle Kann?

  Okay, so this is, this is fun and exciting. I guess that the higher level question is like, at what point does it matter from a, you know, bigger picture, this will impact the market perspective? So talk to me a little bit about volume. I mean, you mentioned five gigawatt hours total end of life batteries coming off of EVs in the United States. But from a Redwood perspective, like, how much can you expect to refurbish and turn in DSS batteries in the near term?

• 27:36Speaker 02

  We think we can refurbish and deploy gigawatt hours, low, single digit gigawatt hours this year, next year. It's really interesting to me that this is the first moment where this thing that has always made some philosophical sense is now starting to be something that we can have impact with in the world. We can actually deploy and, and help to stabilize the grid.

• 28:00Shayle Kann?

  All right, Colin, this was fun. I'm excited to see some second life batteries operating on the grid, but appreciate your time.

• 28:07Speaker 02

  My pleasure.

• 28:08Shayle Kann?

  Colin Campbell is the CTO of Redwood Materials. This show is a production of Latitude Media. You can head over to latitudemedia.com for links to today's topics. Latitude is supported by Prelude Ventures. This episode was produced by Daniel Waldorf, mixing and theme song by Sean Marquand. Stephen Lacey is our executive editor. I'm Shayle Khan, and this is Catalyst.