How Cities and States Can Give Old Batteries a New Life

With the U.S. federal government’s retreat from its previous support for renewable energy and electrification, cities, states, and metropolitan regions are faced with a unique opportunity to lead in a transition to more sustainable systems. The latest report from The New York Climate Exchange provides specific strategies for how urban areas can move forward on a circular economy for electric batteries, thus decreasing carbon emissions, reducing waste, and strengthening local supply chains. 

While news about tariffs and trade wars dominates headlines, one industry underlies all economic activity in a fundamental way. 

Transportation accounts for nearly 40% of carbon emissions in the United States—more than any other sector. Not to mention the air and noise pollution, and the asthma rates that come from burning gasoline. Electrification is the solution we need to reduce transportation emissions and our dependence on oil, while lowering consumer costs. 

The world has mostly gotten the memo: in 2013, there were only 100,000 electric vehicles (EVs) on the road worldwide, but just 10 years later, that number reached 40 million, according to the International Energy Agency. The expanded production of lithium-ion batteries, which power EVs, has been similarly impressive, with global annual manufactured capacity exceeding 1 terawatt—enough to power the entire state of California for two weeks. 

Still, EV adoption is slower than it could be, partially due to vehicle costs, with incentives being axed in the recent federal budget law. Though any new vehicle will be costly, many large fleets, such as those used by delivery companies, municipal public transportation, and others, are slow to adopt electric vehicles both due to their high upfront costs and recurring costs of battery replacement. 

The latter is a particular burden because, like your cell phone, electric vehicle batteries degrade over time. After 7-12 years of natural wear and tear, an EV battery loses a quarter of its original charging capacity. At that point, it may no longer power the vehicle’s needs, even though it still has 70 to 80% of its max charge left. The vehicle owner will have to discard the battery and send it to the landfill—a process that shows up on the balance sheet as a lost investment.  At best, they can recycle it for raw materials, but even then, it’s estimated that at current rates, by 2033, worldwide capacity to recycle battery cells will cover just 10% of what’s needed.  

With all the rare earth minerals mined for each battery, throwing them into landfills risks turning a potential climate solution into a new environmental crisis.  

The U.S. federal government’s retreat from its previous support for renewable energy and electrification provides cities, states, and metropolitan regions with a unique opportunity to design the system right: by building a circular economy for batteries.  

The latest report from The New York Climate Exchange, An Introduction to Battery Circularity, provides specific strategies for how urban areas can move forward on a circular economy for electric batteries.  

First, extending a battery’s first use: if we can use data to optimize battery performance in electric vehicles, we extend the life of the batteries in their first usage.  The scale of vehicle electrification in urban areas means that public and municipal electric fleets have a particular opportunity to coordinate, share data, and extend the state of the batteries’ health. 

Second, repurposing: we’re able to unlock the full value of EV batteries by giving them second lives in battery energy storage systems or grid storage—or even third lives powering lamp posts or scooters.  If vehicle owners can sell their used batteries to another user, they would be able to reclaim some of that remaining value, recouping some of their initial investment and making the upfront costs of electrification more worthwhile. Metropolitan areas are uniquely positioned to connect the forthcoming supply of used EV batteries with the demand from energy storage systems at a local level, effectively creating a local, closed-loop market for battery reuse. 

And finally, recycling: expanding and incentivizing responsible recycling allows for the extraction of critical minerals inside old batteries to be reused as raw materials for newly manufactured ones. If municipalities can work in cooperation with state entities to develop recycling facilities within the region, we can minimize transport costs in the recovery of materials from locally used batteries. 

By extending the life of batteries and their materials through a circular market, we can reduce the demand for raw minerals for new batteries. This would reduce environmental degradation, human rights abuses, and reliance on supply chains from countries that may not be dependable, thus strengthening domestic supply chains. 

Battery circularity could be a $200 billion industry by 2050, supplying over 200 GWh by 2030 alone. Though it may not have the support it did before, electrification and the circular economy would help ensure that every dollar we invest in batteries delivers maximum impact—for vehicle owners, energy and grid storage developers, recyclers, insurers, manufacturers, and for society. A transition to a circular economy is an opportunity to deliver lasting economic growth, supply chain resilience, and meaningful environmental benefits to our communities.