Exploring EV Battery Secondary Life Business models and Reverse Logistic perspectives

University essay from Mälardalens högskola/Akademin för innovation, design och teknik; Mälardalens högskola/Akademin för innovation, design och teknik

Abstract:  In connection to the increasing awareness of vehicles and its impact on the environment, the interest in the electric vehicle market has shown a significant growth in the recent years. According to forecasts, it is also projected to increase further in the future. These electric vehicles are driven by lithium-ion batteries with an expected service life of 5-15 years depending on different technology generations and design concepts. After the given service life, the battery has lost approximately 20 percent of its capacity and is no longer permitted to be used in its original application area again, out of safety reasons. Although the retired battery pack is not suitable for vehicles, its remaining capacity can still be utilized in other applications. Hence, the term second life has become a common subject in the automotive industry, where companies are trying to find new application areas for the retired electric vehicle battery packs. Common methods regarding second life of electric vehicle batteries are processes such as remanufacturing, repurposing and re-use. These presented second life methods are from a reverse logistics perspective. Second life alternatives enable a better sustainability and reduces the environmental impact by re-using and recycling existing materials.   In this thesis, the authors examined different second life concepts with the same prerequisite, an electric vehicle lithium-ion battery pack with an energy capacity of 20 kWh. The project has been conducted in a company that is one of the leading manufacturers in the heavy-duty industrial vehicle industry, which currently is developing their electric vehicle machines. Several different concepts have been generated and analysed to find the most applicable business model concepts from a second life perspective. The purpose has been to investigate and calculate which of these business model concepts are most feasible from an economic and a reverse logistics perspective. In order to fulfil the purpose, the following research questions have been formulated:   RQ1: Which secondary use business model concepts are feasible for battery packs of electrified machines? RQ2: Out of the above identified concepts, which business model concept is economically feasible and how can its reverse logistic be composed?   In order to answer the research questions, the authors have analysed different cost aspects and forecasts based on existing research and case company data. This is performed to develop the most profitable concepts based on the collected data, where the generated ideas concluded in three final concepts. For these concepts, individual business model canvases were created to illustrate all important parts of the concepts. The thesis resulted in an economic analysis of the three concepts, visualizing function diagrams and comparing them to each other, to identify the most applicable concept for the case company. The remanufacturing concept proved to be the most applicable one, where its associated reverse logistics and recycling process were investigated and determined. In conclusion the thesis can firstly contribute to future research by the created process map that companies can use and apply in their second life process, correlated to the managerial implications. Secondly, the remanufacturing concept can be a potential future investment for the case company, considering all valuable factors that have been analysed throughout the thesis.     Keywords: Battery pack, Battery secondary use, Business model, Reverse logistic, ESS, Remanufacturing, Battery repurposing, re-use, Battery second life economic analysis.

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