The battery sector evolves so rapidly. As soon as one breakthrough idea comes along, one market shift can soon cast doubts on it. 

Take second life batteries for example. For some time, reusing spent EV batteries for stationary ESS applications has shown real promise. Rather than discard these batteries, when they still have plenty of life in them, they can be used again with great suitability for ESS (more of a focus on durability and reliability).

We've had the pleasure of working with some wonderful startups who are at the forefront of this domain and we know their technology is proving valuable to customers, particularly in Commercial and Industrial segments. 

But like any business, cash is king. New battery prices have been falling considerably for the last 12 months and now the widespread acceptance of LFP batteries, with a lower cost than NMC, has triggered a flurry of growth. LFP production is soaring around the world, and with greater volumes of low cost battery production, the competitive edge of 2nd life batteries comes into question. 

So is this the end for second life?

I don't think so. ESG is at the forefront of many battery industry leaders and there is a growing focus on circularity so reusing spent EV batteries still remains an attractive proposition from this perspective. Some may argue that a better circular approach would be battery material recycling (which is a debate for another day), but in my view there's room at the table for both.

It's important to note that some “second life" battery companies aren't actually that and in fact are repurposed first life batteries i.e. they've sourced batteries that may have originally been destined for EV use, but didn't qualify (due to power and energy density needs) but are perfectly viable for ESS. This way they've not had the same degradation as second life, but also this could still be an important reuse of low cost batteries (whereas otherwise they may have been scrapped).

Companies like Cactos (featured in this article) and Evyon have wisely placed an emphasis on repurposed first life batteries and second life, which seems a smart choice. 

Those companies offering such technology will need to be smart and consider attractive business models like ESS-as-a-service, reducing upfront costs for customers and really focus on high added value (in-built monitoring and diagnostics, easy integration within larger power system solutions, and excellent aftermarket and customer service).

Hyperion works with international battery clients during the scale-up phase, hiring great senior and leadership talent. If you're considering growing your team, then get in touch at david.beeston@hyperionsearch.com