Chennai, May 22
As the electric vehicle (EV) revolution gathers pace in India, it will be critical for the country to focus on the End of Life (EOL) management for EV materials. It is because the second life of the battery (SLB) can improve the value proposition of EVs, making them even more attractive by using the full potential of the battery value chain, pointed out a report by EY India.
Battery scrapping and recycling have so far taken a backseat in the Indian context. There are no procedures detailed by regulators, and the onus of battery recycling has been left to the manufacturers. In case a manufacturer is no longer active, then there is no precedent on the methodology that will be followed for the disposal of the vehicle.
With limited reserves of rare earth metals like lithium, cobalt and nickel, battery recycling can offer a shorter supply pool for new EV battery manufacturers.
Instead of importing these metals from the international markets, which can be influenced by world events (such as the Russia-Ukraine conflict), recycling can help establish a domestic supply of used batteries, as well as attach a residual value to the battery at its end of life.
This will offset the total cost of ownership for the consumer, making EVs more affordable in the longer run.
Creating a new asset, revenue stream
“EV batteries are costly but their value chain — use, reuse, recycle — offers revenue potential. Developing a used battery market presents a major opportunity for industry participants to create new assets, access valuable revenue streams, secure supplies of raw materials, and drive EV use,” said Som Kapoor, Partner, Future of Mobility & Autos Retail Leader, EY India.
He added, “It is a critical aspect of the future viability of EVs and will be a major competitive differentiator for those that drive the market as opposed to those that sit on the sideline.”
EV batteries typically operate for up to 3,000-5,000 cycles before they are deemed inefficient for direct use in the vehicle. These batteries retain 70-80 per cent of their original battery capacity, with only a 5 per cent expected self-discharge rate over 24 hours, making them extremely viable for non-transportation related secondary applications such as renewable energy storage, grid stabilisation, etc, the report stated.
Learning from global ideas
Apart from creating awareness, India will need to take cues from global best practices.
Development of systematic processes, standards and guidelines to promote seamless battery reuse, refurbishing, and recycling, incorporating traceability across the value chain to strengthen the battery retrieval process and defining roles and responsibilities of battery manufacturers, OEMs, recyclers and the government stakeholders for appropriate EOL management would be helpful.
Thus, the EV policy landscape should focus on end-to-end supply chain development for the segment to streamline in terms of component availability and localisation, standardisation of EV batteries to allow for ease of battery recycling and development of SLB solutions, the report said.
The benefits offered through developing a localised recycling policy will be reflected in the cost of batteries, reducing the upfront cost. A residual value is placed on the batteries after their end-of-life as an EV battery, encouraging local businesses to explore opportunities in the SLB market, reducing India’s need to import rare earth materials and improving the local supply chain.