As transport systems shift towards hybrid and fully electric vehicles (EV), attention is increasingly turning to the batteries that power them. While electric vehicles are central to decarbonised mobility, their batteries also raise important environmental, economic and regulatory challenges. How can these be addressed more sustainably?
Given that it is projected that 250 million electric vehicles will be on the road by 2030, it is more important than ever to ensure that we have in place scalable and sustainable strategies to recover and reuse these batteries. Creating new batteries demands raw materials like cobalt, lithium and nickel, which are difficult to extract and come at a significant resource cost and geopolitical precarity. Improper disposal of batteries also risks ecosystems and public health. Implementing circular economy principles to electric vehicle batteries not only helps recover and creates value, but also supports a more sustainable and healthy future for us all.
The latest research by Dr Xu and colleagues develops a framework that maps circular business models across the EV battery closed-loop supply chain, highlighting how value can be created, delivered and captured across different lifecycle stages.
- Battery Leasing in this model, ownership of batteries is retained by providers, which lease them to customers, often supported by battery swapping and flexible service options. Revenue is typically generated through subscription or pay-per-use models, while customers benefit from lower upfront costs and greater affordability.
- Charging infrastructure as a Service provides EV users with access to charging stations and related infrastructure, usually on a subscription or pay-per-use basis rather than through ownership of the infrastructure itself. This enhances the scalability and accessibility of EV charging for customers while generating recurring revenue for providers.
In addition, they find evidence of the ‘Five Rs’ of circular economy, which in the EV battery context can also function as circular business models for value recovery and lifecycle extension:
- Remanufacturing creates value from used batteries or components by restoring them to a like-new or OEM-standard condition. This can extend battery life, return functional components to the supply chain, and enable remanufactured batteries or parts to be sold or leased for further use.
- Repurposing refers to the use of second-life batteries in new applications beyond electric vehicles, most commonly in stationary energy storage systems that store energy generated from renewable sources.
- Recycling refers to the recovery of valuable materials (like lithium, cobalt and nickel) from end-of-life batteries after their first-life use and, where relevant, second-life applications. This helps reduce waste, close material loops and generate value from recovered resources.
- Repairing relates to providing a repair service (targeted fixes or maintenance) to customers, often at a lower cost than full replacement. This can extend the battery’s first-life use and, in some cases, support continued use before second-life application or recycling.
- Refurbishing relates to reconditioning first-life batteries or subcomponents to restore usability and extend lifespan, after which they may be sold or leased for further use. While refurbishing is discussed in the academic literature as a relevant circular business model, it was not strongly evident in the analysed company data.
Through their novel data-driven methodology, the researchers also identify two business models not widely discussed in academic literature:
- EV Sharing can lower the costs of using electric vehicles and thus result in greater overall adoption and utilisation of the battery.This includes things like car and ride sharing and shared mobility services.
- Technology-led Models such as battery digital passports and battery management systems are less visible in the academic literature but increasingly evident in industry practice. These models support lifecycle-wide tracking, monitoring, traceability and coordination, enabling circular strategies across multiple stages of the battery supply chain.
These business models need not be considered in isolation but can complement one another. For example, battery digital passports can support battery leasing by tracking use patterns and life cycle metrics.
This work is part of the Horizon Europe funded CIRCUBATT project. NUSC experts Mao Xu, Quang Huy Duong, Carlos Fernandez De Arroyabe Arranz, Wenxian Sun, and Li Zhou have recently published a new paper in the journal Technovation that explores these issues through a hybrid methodology combining topic modelling and literature synthesis, drawing on more than 1800 press releases and databases.
Read the full paper here – there are so many more great insights to unpack: https://www.sciencedirect.com/science/article/pii/S0166497226000222
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