Get a Comprehensive Overview of the Second-Life Automotive Lithium-Ion Battery Market Report Prepared by P&S Intelligence, Segmented by Type (LFP, LMO, NMC, LTO, NCA), Vehicle Type (Two-Wheeler, Passenger Car, Commercial Vehicle), Application (Energy Storage, Electric Vehicle Charging, Base Station, Low-Speed EV), and Geographic Regions. This Report Provides Insights From 2017 to 2030.
The second-life automotive lithium-ion battery market generated revenue of USD 987.5 million in 2023, which is expected to witness a CAGR of 23.8% during 2024–2030, to reach USD 4,379.2 million by 2030. The expensive battery recycling process and the growing adoption of electric vehicles (EVs) across the world are the key factors driving the growth of the second-life automotive lithium-ion battery industry.
Various countries in the world are rigorously announcing their aim to adopt electric vehicles in the near future, thereby creating lucrative growth opportunities for electric vehicle as well as battery manufacturers.
For instance, in India, the Department of Heavy Industries (DHI) under the Ministry of Heavy Industries and Public Enterprises launched the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (FAME-II) program in 2019. FAME II reflects the country’s ambitious aim to expand the adoption of EVs in the coming years.
Increasing Number of Partnerships and Collaborations
The increasing number of partnerships and collaborations is a major trend in the second-life automotive lithium-ion battery market. Major OEMs and energy storage technology providers across the world have taken several business initiatives, including pilot projects, to explore the applications of used EV batteries. This is being done to support energy storage in residential, industrial, and commercial premises and encourage EV charging at both home and public charging stations.
For instance, Nissan Motor Co. has entered into a licensing agreement with APB Cooperation for low-cost lithium-ion battery production. This would help customers to use low-cost and renewable energy more efficiently.
Similarly, BMW AG, Anheuser-Busch InBev, Robert Bosch GmbH, Microsoft Corporation, and ZF Friedrichshafen AG have teamed up to support manufacturing companies in accelerating innovation at a large scale. This collaboration involves sharing knowledge and data across industries and providing access to new technologies.
Expensive Battery Recycling Process Drives Market
Lithium-ion batteries contain only 2–7% lithium, and obtaining it through recycling is five times more expensive than obtaining lithium directly from natural sources.
The only material worth recycling in the process is cobalt. However, battery technology companies are increasingly focusing on the development of batteries that reduce or omit the use of this material, by substituting it with a more-stable and cheaper substance, thereby creating a possibility of future batteries not having any cobalt to recycle.
Thus, the expensive battery recycling process acts as a main driver for the second-life automotive lithium-ion battery market.
Growing Adoption of EVs
The increasing EV sales across the world are the biggest factor propelling the demand for EV batteries. In turn, this drives the second-life automotive lithium-ion battery market by making more of these available for reuse.
The increasing efforts for environmental protection, primarily due to the swift ozone depletion, are driving EV sales around the world.
At present, around 43% of the global GHG emissions are accounted for by the automobile sector.
Thus, the growing concerns over air quality degradation due to the rising amount of exhaust fumes from vehicles are driving governments to launch initiatives for environmental protection globally.
Falling Cost of Battery and Its Components Is Key Challenge in Market
Lithium-ion battery systems comprise various components, including pack housing, thermal control, internal wiring, and battery management system. The prices of these components have come down in the recent past and are expected to further decline in the near future, thus making lithium-ion batteries more suitable and affordable for end users.
The average cost of a battery management system was USD 200 to 300 per kilowatt-hour (kWh) of battery capacity in 2022, and it is expected to decline by 40–60% by 2025. These estimates can vary based on the specific technologies and market conditions.
Moreover, the prices of battery pack contents, such as module frames, cooling plates, internal wiring, plastic covers, and pack cases, are projected to come down by 30% by 2025.
Tesla Inc. is in the process of building a massive factory named Gigafactory with Panasonic Corp. to produce lithium-ion batteries, to meet the growing demand for them. Hence, as new batteries become cheaper, the cost difference between used and new batteries would diminish, with customers preferring new ones. Thus, the declining cost of these batteries and their raw materials has the potential to limit the growth of the second-life automotive lithium-ion battery market.
In-Depth Segmentation Analysis
Automotive Lithium-Ion Battery Type Insights
The lithium–iron phosphate category held the largest share, of 35%, in terms of battery capacity demand, in 2023. This is ascribed to the fact that the LFP battery is comparatively safer than other types and has a longer life span, which is why it is preferred by many EV manufacturers, especially in China.
Due to these advantages, LFP is projected to be the chemistry of choice for electric buses’ batteries in the foreseeable future.
The lithium–nickel–cobalt–aluminum oxide category is expected to exhibit the fastest growth in the market during the forecast period. This can be attributed to the fact that the NCA battery offers a greater energy density over others and has superior fast-charging capabilities.
During the study, we have analyzed five second-life automotive lithium-ion battery types in the report:
The passenger car category dominated the market throughout the historical period, with around 50% share in 2023, in terms of total battery consumption worldwide. This is due to the support from the governments of major automobile selling countries, such as China and the U.S., for producing new-energy cars, and the rising demand for fully electric passenger cars with a high-range-per-charge feature. Huge monetary incentives are being provided to both electric car manufacturers and end users to promote the adoption of these vehicles.
Below are the major vehicle types analyzed in this report:
Two-Wheelers (Fastest-Growing Category)
Passenger Cars (Largest Category)
Commercial Vehicles
Application Analysis
The base stations category held the largest market share, of around 45%, in 2023, in terms of consumption. This is due to the fact that battery systems are increasingly being used in telecommunications base stations as an aggregated and highly distributed asset for frequency containment reserves.
The energy storage category is projected to witness the highest CAGR, of around 24.2%, during 2024–2030 in the market. This growth is associated with the fact that second-life batteries provide reserve energy for maintaining a utility’s power reliability at an optimum cost, by displacing the more-expensive and less-efficient assets.
Additionally, utilizing second-life batteries for energy storage allows for deferring transmission and distribution investments. This approach also capitalizes on power-arbitrage opportunities by storing renewable energy for use during times of scarcity.
Below are the major applications in which second-life automotive lithium-ion batteries play an important role:
Energy Storage (Fastest Application Category)
Electric Vehicle Charging
Base Stations (Largest Application Category)
Low-Speed Electric Vehicles
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APAC Leads the Global Market Driven by China
The growing adoption of EVs across the world acts as the most-important driver for the market. As per the International Energy Agency (IEA), the global sales of electric cars crossed 10 million units, and 14% of all the new cars sold were electric in 2022, increasing from 9% in 2021 and less than 5% in 2020.
Globally, APAC held the largest market share, of around 55%, in 2023. This dominance is due to the region’s highest EV sales around the world, driven by China. The People’s Republic stands as the world’s largest electric car market, accounting for around 60% of the global electric cars sold in 2022. Moreover, more than half of the electric cars on the roads globally are now in China, and the country has already exceeded its 2025 target for sales of new-energy vehicles.
Moreover, India leads the world in the sale of electric three-wheelers, which touched 425,000 units in 2022. This is due to the various policies of the Government of India to enable a clean transportation system. The National Electric Mobility Mission Plan (NEMMP) 2020, FAME I & FAME II schemes, PM-eBus Sewa scheme, supply-side incentives under the Production-Linked Incentive (PLI) scheme, multiple tax benefits, and Go Electric campaign are all contributing in reducing the upfront cost of EVs. As the battery is essential in EVs, the latter’s increasing adoption is fueling the growth of the second-life automotive lithium-ion battery market in the APAC region.
Further, Europe is the second-largest and fastest-growing market, expected to advance at a CAGR of 24.4% during 2024–2030. This can be ascribed to the increasing sales of EVs; sales increased by over 15% in 2022.
The U.S. is the third-largest market for electric cars, with sales increasing by 55% in 2022. Further, sales of electric cars reached over 2.3 million units in the first quarter of 2023, around 25% more than in the same period in 2022. The sale was expected to reach 14 million units by the end of 2023.
The regions and countries analyzed for this report include:
North America
U.S. (Larger and Faster-Growing Country Market)
Canada
Europe (Fastest-Growing Regional Market)
Germany (Largest Country Market)
U.K. (Fastest-Growing Country Market)
France
Italy
Spain
Rest of Europe
Asia-Pacific (APAC) (Largest Regional Market)
China (Largest Country Market)
Japan
India (Fastest-Growing Country Market)
South Korea
Australia
Rest of APAC
Latin America (LATAM)
Brazil (Largest and Fastest-Growing Country Market)
Mexico
Rest of LATAM
Middle East and Africa (MEA)
Saudi Arabia (Largest Country Market)
South Africa
U.A.E. (Fastest-Growing Country Market)
Rest of MEA
Market Nature - Fragmented
The market has a high degree of fragmentation, owing to many domestic and international players. The continual appearance of new entrants is impacting the established and new service providers. Organizations can choose any service to fulfill their particular second-life automotive lithium-ion battery needs due to the presence of numerous players.
Second-Life Automotive Lithium-Ion Battery Industry News
Wykes Engineering and Jaguar Land Rover have deployed a 2.5-MWh ESS using second-life EV batteries; they further planned to expand its capacity to 7.5 MWh by 2023 end.
In March 2022, Robert Bosch GmbH, BPSE, and Mitsubishi Corporation signed a cooperation agreement to develop a new service enabling the battery as a service business model. This initiative leverages Bosch’s Battery-in-the-Cloud technology, the battery service commercialization capability of Mitsubishi Corporation, and BPSE’s battery swapping platform. The battery-in-the-cloud technology uses AI to monitor and analyze the battery continuously, optimizing its performance and lifespan, while also optimizing the total cost of ownership (TOC) of the EV Fleet. This technology has been integrated into the battery swapping platform.
UL and Hyundai Motor Company have signed an agreement to help further the safe deployment and use of second-life battery energy storage systems (SLBESS).
Lohum has partnered with MG Motor India to create second-life solutions for the carmaker's EV batteries. Under the initiative, Lohum is reusing the EoFL batteries of the electric vehicles of MG to build energy storage systems with second-life batteries for a wide variety of clean-energy applications in the rural and urban areas of India.
BMW AG has announced the expansion of production capacity and staff for electric powertrain components at its Dingolfing plant in Germany.
GS Yuasa Corporation announced that it has started its new lithium-ion battery plant in Hungary, to fulfill the increasing market demand in Europe.
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