IDTechEx estimates the second-life EV battery market will reach US$4.2B by 2035.
After a Li-ion battery has served its first life in an electric vehicle (EV), automotive OEMs will determine whether to recycle or repurpose these batteries into second-life applications such as stationary battery storage. As written in their new market report, “Second-life Electric Vehicle Batteries 2025-2035: Markets, Forecasts, Players, and Technologies”, IDTechEx estimates that by 2035, the global second-life electric vehicle batteries market will reach US$4.2B in value. The growing availability of retired EV batteries will be a key driver for the adoption of second-life battery storage technologies. However, key considerations related to EV battery chemistry and repurposing processes will shape the economic and technical feasibility to develop and deploy these technologies at commercial-scale and how competitive they will be compared to incumbent first-life Li-ion battery energy storage systems (BESS).
Influence of EV battery chemistry on second-life batteries
EV batteries, especially in Europe and the US, primarily use NMC chemistries to enhance energy density and driving range. Nickel and cobalt in the cathode make NMC batteries more economical to recycle. IDTechEx predicts that in the long term, more NMC batteries recycled to recover raw materials for new EV batteries. As per the EU Battery Regulation, this will also be important for OEMs looking to meet minimum recycled material contents targets in new EV batteries.
Conversely, however, LFP EV batteries are less economically feasible to recycle due to the absence of cobalt and nickel in the cathode. Therefore, IDTechEx expects more LFP EV batteries to initially be sent to repurposing for second-life battery applications. However, historic LFP EV battery adoption in European and US markets has not been as prevalent as in Chinese markets. Therefore, this may result in slower short-term second-life battery market growth in Europe and the US, at least until the availability of LFP EV batteries increases. IDTechEx’s report analyzes NMC vs LFP recycling and repurposing. It also forecasts LFP EV battery availability and second-life BESS installations in Europe, the US, and China.
Cost bottlenecks in second-life battery repurposing
Repurposers in Europe and the US, such as B2U Storage Solutions, BeePlanet Factory, Connected Energy, Zenobē, and Smartville, have continued to develop and supply second-life BESS technologies, predominantly in these regions. Many factors contribute to the overall cost of second-life battery repurposing, including logistics costs, materials and components, and the need for manual intervention in the repurposing process, which includes manual inspection, testing or grading, and end-of-life (EOL) EV battery disassembly and reassembly.
IDTechEx identified bottlenecks in these processes that increase repurposing costs. These include the cost of the retired EV battery and testing or grading. Logistics costs are significant. Low volumes and long-distance shipping of EOL batteries make logistics a major cost in repurposing.

EOL EV battery costs are expected to decline as business-to-business (B2B) battery marketplaces emerge. These marketplaces will streamline the flow of EOL batteries between automotive OEMs and repurposers and may provide crucial EOL battery State-of-Health (SOH) data to expedite decision-making. Marketplace providers may also store these batteries in inventory for an OEM, potentially removing part of the cost burden of storing EOL batteries for the OEM. Marketplaces may charge OEMs for platform use or take a commission from EOL battery sales.
Some marketplaces offer retired EV batteries for US$25-75/kWh, though in low volumes. Trading larger volumes of EOL batteries to repurposers will reduce battery costs per kWh, benefiting from economies of scale. This will be key for repurposers looking to offer second-life BESS technologies at prices that are more competitive with mature first-life Li-ion BESS technologies. IDTechEx’s market report analyzes repurposing costs, identifies key cost bottlenecks in the second-life battery repurposing process, provides sensitivity analysis in various scenarios, and routes for cost reduction, drawing insights from primary interviews with industry experts.
Competition against first-life li-ion BESS and future outlook
Second-life BESS technologies will generally perform worse than first-life Li-ion BESS technologies. This is due to the EV batteries’ degradation over first-life in an EV. Therefore, these systems have to be priced at costs lower than first-life Li-ion BESS to be a more competitive energy storage technology for customers. The reduction of first-life Li-ion BESS technologies in the last few years has made it increasingly difficult for repurposers to commercialize and develop their second-life BESS technologies. This has led to only steady second-life battery market growth in recent years.
It will be crucial for repurposers to explore opportunities to reduce repurposing costs on all fronts, including logistics, materials, components, and the repurposing process itself. Although alternative business models could also be adopted to make second-life BESS technologies more attractive for customers, including Battery Storage as a Service (BSaaS) or renting batteries to customers. These business models are discussed by IDTechEx in their new market report. Ultimately, the growing availability of retired LFP EV batteries in Europe and the US should help to facilitate lower retired EV battery costs, allowing repurposers to offer their second-life batteries at lower costs to customers. However, the long-term commercial feasibility of second-life battery storage technologies also depends on the cost of first-life Li-ion BESS; which continues to decrease and is yet to reach a floor.
For more detailed information on second-life electric vehicle batteries, please see the IDTechEx report, “Second-life Electric Vehicle Batteries 2025-2035: Markets, Forecasts, Players, and Technologies”:
- Repurposing processes
- Techno-economic analyses against first-life Li-ion BESS
- Business models
- Revenue streams, applications
- Regulations
- EV battery and second-life battery trends
- Key second-life battery players and markets
- EOL battery testing and grading technologies and players
- Access to 30+ company profiles
- 10-year market forecasts for second-life batteries and retired EV battery availability
IDTechEx report on Second-life Electric Vehicle Batteries 2025-2035 is now available.
Edited by Puja Mitra, WTWH Media, for Control Engineering, from an IDTechEx news release.