The second life of batteries:
Recycling and Second Life for LFP

A lithium-ion battery of an electric car that has lost 20-30% of its initial capacity is no longer suitable for a car — but it works perfectly as a stationary storage device for another 10-15 years. And when its resource is finally exhausted, modern recycling technologies return up to 95% of valuable materials. This is not a utopia - it is a real business model of ROI 15-25%.

Battery life cycle: from production to recycling

Diagram: closed battery cycle (circular economy)

Second Life BESS: When an EV battery becomes a storage device

EV manufacturers usually define the "end of life" of a car battery at 70-80% SOH (State of Health) — the remaining capacity from the initial one. At this level, the battery no longer provides sufficient range for the driver, but its remaining resource is 3000-5000 cycles — ideal for stationary use.

The key difference: the car needs high power (1-3C discharge rate) and a wide temperature range (-20 to +45°C). A stationary BESS operates at a moderate 0.3-0.5C and a controlled temperature of 15-30°C. In such "greenhouse" conditions, a degraded EV battery can function for another 10-15 years.

Who builds Second Life BESS

• Renault / Connected Energy — E-STOR system based on Renault ZOE batteries. Installed at 50+ sites in the UK for peak shaving and EV charging.
• BMW / BELECTRIC — 2.8 MW*h BMW i3 battery system in Leipzig. Provides frequency regulation for the network.
• Nissan / 4R Energy — second-life LEAF batteries for street lighting and backup power in Japan.
• CATL — program for returning batteries with a guaranteed buy-back. Own second-life projects for telecom towers.

Technology of recycling: three approaches

Recovery of materials by the method of recycling

* Indicators for the hydrometallurgical process (state of the art)

Call LFP recycling

Paradox: LFP (LiFePO4) is the safest and cheapest chemistry for BESS, but the least profitable for recycling. The reason is simple: LFP does not contain expensive cobalt ($30/kg) and nickel ($18/kg). The main materials are lithium ($15/kg), iron ($0.1/kg) and phosphorus ($1/kg).

Recycling one ton of NMC batteries yields $5,000-8,000 worth of recovered materials. A ton of LFP is only $1,000-2,000. With recycling costs of $1,500-3,000/ton, LFP recycling barely breaks even without subsidies.

Solutions come from three sides: scale (reducing the cost of the process at large volumes), regulation (EU Battery Regulation will make recycling mandatory) and direct recycling (saving the cathode material without disassembling it into elements).

Leading recycling companies

• Li-Cycle (Canada/USA) — Spoke & Hub hydrometallurgical process. 35,000 tons/year capacity. Spoke factories grind batteries into "black mass", Hub factories extract materials. 95%+ recovery rate. IPO on the NYSE.
• Redwood Materials (USA) — founded by ex-CTO Tesla JB Straubel. Closed-loop: takes batteries from Tesla, Ford, Volvo and returns the cathode material to the manufacturers. Capacity 100+ GWh/year by 2025. Investment $2B+.
• CATL (China) — vertical integration: produces, collects and recycles. Subsidiary Brunp Recycling processes 100,000 tons/year. Closed-loop for LFP by reduction of lithium carbonate.
• Umicore (Belgium) — the European leader of pyrometallurgy. 35,000 tons/year. Partnership of BMW, Audi. Switch to a hybrid pyro+hydro process to increase lithium recovery.

EU Battery Regulation 2027: what will change

The new EU Regulation on batteries (coming into full force of 2027 years) fundamentally changes the rules of the game:

• Battery Passport — a digital passport of each battery >2 kWh with full information on chemical composition, carbon footprint, recycled content, SOH and history of use. QR code on each module.
• Minimal recycled content — of 2031 years: 12% cobalt, 4% lithium, 4% nickel of recycling. From 2036: 20% Co, 10% Li, 12% Ni. This creates a stable demand for recycled materials.
• Mandatory recycling goals — 2027: 65% of battery weight. 2031: 70%. For lithium separately: 50% by 2027, 80% by 2031.
• Extended Producer Responsibility (EPR) — battery manufacturer finances end-of-life collection and recycling. This stimulates design for recyclability.
• Due diligence — a mandatory check of the supply chain of raw materials for compliance with ESG standards.

"EU Battery Regulation is not just an environmental initiative. It is a strategic tool to reduce Europe's dependence on imports of critical materials. Recycling is local 'mining' without geopolitical risks."

Environmental impact: recycling vs extraction

Mining of lithium ore requires 250-500 tons of water per ton of LiCO3 (Atacama, Chile) or large-scale open pit development (Australia). Recycling reduces water footprint by 90%, energy footprint by 50-70%, CO2 emissions by 40-60%.

For LFP batteries, an additional argument: the iron phosphate in the composition is not toxic (unlike cobalt), but lithium is a water-soluble metal that creates environmental risks if it gets into groundwater. Even "safe" LFP batteries require responsible disposal.

Second Life BESS in Ukraine: opportunities

There are still few Ukrainian EVs (~50,000 as of 2025), but the market is growing rapidly. In 5-7 years, the first mass batches of batteries (mostly Nissan LEAF, Tesla Model 3) will reach the second-life threshold. Strategic opportunities:

• Import of second-life modules of the EU — European EV batteries are massively entering the secondary market. The cost of delivery to Germany/Poland is minimal.
• Telecom towers — 30,000+ base stations in Ukraine need backup power. Second-life BESS 5-20 kWh is an ideal replacement for lead batteries.
• Agriculture — autonomous power supply of irrigation systems, refrigerating chambers, grain elevators from PV + second-life BESS.
• Microgrids of critical infrastructure — second-life BESS for schools, hospitals, shelters at a much lower cost.

Frequently Asked Questions

Are second-life batteries safe?

Yes, subject to professional testing and recalibration. Before use, each module passes: SOH measurement (capacity, internal resistance), self-discharge test (14 days), insulation check, thermal testing. Modules with anomalies (micro-short circuits, swelling) are rejected and sent for recycling. LFP batteries are much safer than NMC - even degraded, they are not prone to thermal runaway.

What is the warranty on second-life BESS?

Typical warranty from integrators: 3-5 years or 2000-3000 cycles (whichever comes first). Some companies (Connected Energy, Beeplanet Factory) provide up to 10 years of guarantees at the system level. The key factor is BMS quality: the new intelligent BMS compensates for uneven module degradation through cell-level balancing and adaptive charge algorithms.

How much does battery recycling cost in Ukraine?

As of 2025, there are no industrial capacities for lithium-ion recycling in Ukraine. Batteries are exported to Poland (Elemental Strategic Metals), Belgium (Umicore) or Germany. Cost: $800-1500/ton including logistics. This creates an opportunity for a Ukrainian startup: with a volume of 5,000+ tons/year, a hydrometallurgical recycling plant pays for itself in 3-4 years.

Is it possible to mix modules from different manufacturers in a second-life BESS?

Technically possible, but requires advanced BMS. Key constraint: modules must be of the same chemistry (LFP of LFP, NMC of NMC) and close SOH (no more than 5% difference). Different manufacturers = different rated voltage, cell capacity, connectors. Recommendation: form strings of modules of the same manufacturer and model. Different strings can be from different manufacturers if the BMS supports independent management.

What will become of millions of EV batteries in 10 years?

According to McKinsey forecasts, by 2030 years, 1.2 M tons of EV batteries (equivalent to ~600 GW*h) will enter the secondary market annually. 60-70% will go to second-life (BESS, telecom, industrial), 30-40% — directly to recycling. By 2040, recycled lithium will cover 25-30% of new production needs. This creates a market worth $30-50 billion per year.

Does Ukraine fall under the EU Battery Regulation?

Directly - no, but indirectly - yes. Any manufacturer exporting batteries or battery products to the EU must comply with the Regulation. For Ukraine, this applies to: car manufacturers, manufacturers of electric vehicles, BESS integrators working on European projects. In addition, Ukraine is in the process of approximating EU legislation — a similar regulation will appear within 3-5 years after its entry into force in the EU.