Since the first sales of modern electric vehicles in 2010, carmakers have sought to close the competitiveness gap with combustion engines. With the battery carrying the cost premium, attention turned to its uses beyond traction alone. Two sources of value had been studied for six years, and our analysis separates them clearly.
V2G and V2H will not become a significant market
The principle is to use the vehicle battery to power a home or feed the grid directly. Several carmakers, Nissan first among them, launched pilots.
Only the Leaf-to-home solution developed by Nissan and Nichicon genuinely moved beyond trial stage, with around 3,000 cumulative sales since its launch in June 2012. Everywhere else the subject remained largely experimental.
Two obstacles compound each other. The first is cost: several thousand euros per vehicle, €4,000 for Nichicon’s bidirectional charger before subsidy, and an estimated €10,000 for the V2G system developed by Endesa and Enel with Nissan, with a medium-term target of €5,000.
The second is structural. Maximising the system’s value requires near-permanent vehicle availability at the charge point, in direct conflict with its primary use, mobility. Aggregation across many vehicles is therefore necessary, which reduces the value accessible per vehicle. Economic analysis also shows that managing discharge adds little value over simple smart charging.
Second-life use is on a different scale
Reusing batteries for stationary storage, once their performance no longer suits traction, offers potential of an entirely different order.
Taking account of global EV and plug-in hybrid fleet scenarios, even if only half the available capacity were reused, cumulative capacity within ten years would be of the same order of magnitude as total installed electricity storage capacity worldwide, around 140 GW, today mostly pumped hydro.
Economic uncertainty is real, but research converges: under favourable conditions refurbishment could be done at a full cost well below $100/kWh, making competitiveness against new batteries plausible, including the purchase price of the battery at the end of its first life.
Recycling is not a competing alternative. Given the cost-revenue balance of a lithium-ion battery, it still represents a net cost for whoever is responsible, today the carmaker, and that was expected to persist over the medium term.
A sector structured through partnerships
Renewed interest was clear: within months, most major carmakers, Nissan, Renault, BMW, Mitsubishi, PSA, Daimler, GMC and Toyota, had formed strategic partnerships or joint ventures with third parties.
Interests differ by position in the value chain. Battery manufacturers hold the design know-how and appear best placed technically to handle refurbishment. Carmakers have a direct interest in growing this market, since it raises the residual value of the battery and so lowers the vehicle’s initial price, while offering an answer to the grid impact of electric vehicles. Then come all those seeking access to competitive storage capacity: utilities, renewable developers, back-up and UPS suppliers, construction firms, alongside collection and recycling companies.
It is through these strategic partnerships, commercial joint ventures, R&D agreements and joint demonstrators, that the sector will take shape.
To go further, download our full analysis below or contact our experts.
The downloadable PDF of this study is available in French only.
