The Big Potential of Used Electric Car Batteries

August 25, 2016, 4:33 PM UTC

Almost a third of electric car batteries are expected be reused by 2025, providing important applications for the power grid and buildings, according to a new report from Bloomberg New Energy Finance.

The report estimates that there will be 29 gigawatt hours of used batteries created by electric cars by 2025, and 10 gigawatt hours of those will be repackaged and find new life storing energy for buildings, home owners, and utilities.

Ten gigawatt hours is enough energy stored to power 1.65 million average American homes, or about 10 large coal or natural gas power plants.

As more and more old electric car batteries are reused, the cost to convert them into new products will start to come down significantly.

Electric car batteries commonly have a life of about 8 to 10 years before the batteries start losing some of their ability to hold energy. It’s similar to what happens with your laptop or cell phone battery after several years of heavy use, but just on a bigger scale.

For more on Tesla’s high energy battery pack, watch:

Today since the market for electric cars is so new, there’s almost no left over batteries available for reuse. However, in the coming years, as those first Nissan LEAF, GM Volt, and Tesla cars age, more and more of them could be economically used in various ways.

Bloomberg New Energy Finance estimates that after 8 to 10 years of use, some electric car batteries could still have 70% of their useful energy left in them. They’re just not operating at a high-enough level to power a car reliably.

But connected to the power grid, or in the basement of a building, they can be packaged together and can collectively charge and discharge in small amounts when needed.

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The report says that today it costs about $100 to $200 per kilowatt hour for used electric car batteries, though those figures are more estimates as the market is so new. But down the road the analysts think that those costs could drop in half, to $49 per kilowatt hour by 2018 (plus additional costs to convert the battery to reuse).

In contrast a brand new battery system for the power grid or for buildings could cost $1,000 per kilowatt hour today (though that cost is also rapidly dropping).

At the end of the day, reusing electric car batteries isn’t just about economics, but also about sustainability. As more and more electric cars are bought and driven every day, the number of electric car batteries that need to be either reused or recycled will continue to grow. Batteries contain chemicals that can’t just be thrown into landfills.