The new partnerships announced by GM and Nissan will help the automakers figure out how to reap the benefits of depleted batteries, answering questions such as whether the batteries need to be disassembled and repackaged, how well they will work for different applications, and what applications could be the most lucrative. Storing large amounts of energy for hours or days is a very different task from quickly charging and discharging large amounts of power. Duvall says that companies may be willing to pay relatively high prices for batteries for some applications, such as backing up a data center.
It’s not clear exactly how much these applications can defray the cost of the batteries. “It’s a cloudy crystal ball,” says Micky Bly, GM executive director of electrical systems. For now, he says, government incentives will help cars such as the Volt compete, but those incentives will eventually expire. To compete without incentives, the cost of using batteries will have to come down from where it is today–between $500 and $1,000 per kilowatt hour–to $200 to $300 per kilowatt hour.
Bly expects used-battery proceeds to account for “single-digit percentages” of these savings. (The rest of the savings will need to come from other areas, such as improved battery technology, and lower costs that accompany larger-scale production.)
Reaping profits from used batteries “has been a nice vision for many years,” says Menahem Anderman, founder of Total Battery Consulting, based in Oregon House, California. But he says he has yet to see a viable plan for doing it. It’s hard to predict how long an eight-year-old battery will last, he says, or how safe it will be. And the economic value will be limited by the fact that the batteries will need to be tested, shipped, and supported by warranties, he says. So he expects the batteries’ residual value will be “well below $100 per kilowatt hour, probably below $50 per kilowatt hour”–less than 10 percent of the cost of a battery today.