Reduced Reliance on Virgin Materials: As EV production scales, the demand for critical raw materials like lithium, cobalt, nickel, and manganese intensifies. Marketplaces can connect OEMs with suppliers of recycled battery materials (“black mass” or processed elements) derived from end-of-life EV batteries. This reduces dependence on new mining, which can be environmentally impactful and subject to geopolitical risks and price volatility.
Cost Savings: While the initial recycling process can be expensive, the long-term benefit of sourcing recycled materials can lead to cost savings compared to continually procuring virgin materials, especially as recycling technologies improve.
Sustainable Sourcing: Participating in a circular economy for batteries enhances an OEM’s sustainability credentials, aligning with growing consumer and regulatory demand for environmentally responsible products. This can also help them comply with regulations like the EU battery passport, which requires tracking the carbon footprint of battery production.
Responsible Disposal: OEMs are increasingly responsible for the entire lifecycle of their products, including battery disposal. A marketplace provides a structured and compliant channel for managing end-of-life batteries, ensuring they are not improperly discarded.
Optimizing Value Recovery: Instead of simply sending batteries to a shredder, a marketplace allows OEMs to assess the remaining value of a battery. If a battery still has significant capacity (e.g., 70-80%), it can be routed to second-life applications, maximizing its economic and environmental value before full recycling. This helps OEMs unlock new revenue streams from what was once considered waste.
Reduced Liability: Proper management through a marketplace minimizes environmental and safety liabilities associated with high-voltage battery packs.
New Revenue Streams: OEMs can partner with companies on the marketplace that specialize in repurposing EV batteries for stationary energy storage, backup power, or other less demanding applications. This creates an additional revenue stream from batteries that are no longer suitable for vehicle use but still have significant life.
Brand Reputation: Engaging in second-life initiatives enhances an OEM’s brand image as a leader in sustainability and innovation.
Data Insights: By tracking batteries through a marketplace, OEMs can gain valuable data on battery degradation, performance in various applications, and overall lifecycle, which can inform future battery design and manufacturing.
Supply Chain Visibility: Marketplaces can provide OEMs with insights into the availability of used batteries and recycled materials, helping them forecast future supply and demand for their battery production.
Pricing Trends: Understanding the market value of used batteries and recycled materials helps OEMs make more informed decisions about battery design, material sourcing, and overall cost management.
Some OEMs are exploring BaaS models where customers lease the battery rather than own it outright. In such models, the OEM retains ownership of the battery, and a marketplace becomes crucial for managing these assets once they are removed from the vehicle. This allows OEMs to control the full lifecycle of the battery, from initial deployment to second-life applications and eventual recycling.