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"After removing the toy car, the remote control can still be used!" The advertisement for Nanfu Battery explains in a simple and understandable way what battery cascading utilization is. When the capacity of the power battery decays to 80%, it is not suitable to continue serving on the vehicle, but there is still residual value that can be developed.

What is the market size for cascading utilization? The well-known iron tower company in China, which is well-known in the cascading utilization process, estimated that as of 2020, the cumulative number of power batteries that can be cascading utilized is 61.86GWh. According to 80% capacity degradation and 60% cascading utilization screening rate, the cumulative cascading utilization of power batteries by 2020 is about 29.69 GWh. According to an estimated price of 0.62 yuan/Wh for cascaded utilization batteries, the market size for cascaded utilization of power batteries in 2020 is approximately 7.769 billion yuan.

However, there has been controversy in the industry over whether retired batteries have cascading utilization value and how to ensure their safety. What are the difficulties in cascading utilization? Why can't we turn waste batteries into treasure?

Difficulty in Cascade Utilization: Battery Health Status Becomes a Black Box“

"The cascading utilization of power batteries for energy storage is a false proposition," Huang Shilin, Vice Chairman of CATL, made it clear at the 5th China Energy Storage Innovation and Technology Summit held in Shenzhen on November 22. As the leader of the domestic lithium battery industry, the public statement of the person in charge of Ningde Times is like pouring a bucket of cold water into the cascade energy storage.

Coincidentally, Wang Fang, the chief expert of power batteries at China Automotive Center, gave a speech at the "Eagle Plan" CEO training class organized by the Tramways Association, saying, "We did a project on the State Grid from 2012 to 2014 and demonstrated the cascading utilization. At that time, we used Chery S18 batteries to build an energy storage power station, and after completing it, we also admitted that it was close to a pseudo proposition, which was very difficult, very difficult to do."

The Electric Vehicle Observer consulted with companies involved in cascade utilization projects. One of the former executives of a company owned by State Grid, who declined to be named, stated that as early as 10 years ago, State Grid had conducted research on cascading utilization and had attempted centralized energy storage, distributed energy storage, UPS, and bicycle applications. However, in the end, except for its ideal application on bicycles, its performance in other projects was not ideal.

Can the quality of cascaded battery utilization meet the demand for energy storage? Professor Ai Xinping from Wuhan University once stated that the safety of electric vehicle batteries requires careful maintenance. Even the best batteries can make product consistency uncontrollable for users after use. Huang Shilin introduced that CATL conducts repeated charge and discharge tests on batteries at the end of their lives, and then dissects and studies the internal physical changes of the batteries. However, "At present, the accumulation of basic data on cascading battery utilization is far from sufficient. What will happen to batteries at the end of their lives? It will take at least a few years to understand this problem."

After vehicle use, the internal condition of the power battery is actually a black box. The product has undergone significant differences from the newly designed battery, making it difficult to ensure product consistency and safety. "The ternary batteries currently used in mainstream cars for cascading energy storage are not yet mature enough. If the system is not designed well or exceeds its service life, it will leave many safety hazards," said Huang Shilin.

Open the Black Box: Single Section Detection, Whole Life Monitoring, and Module Utilization

To completely solve this problem, it is necessary to test each battery. The person in charge of an energy storage enterprise stated that most of the early cascade utilization projects were demonstration projects, without considering cost inputs. The dismantling of cascaded battery cells into individual sections for evaluation, grouping and reuse, with a very high cost investment, is not feasible for large-scale energy storage.

If we can quickly detect the health status of battery cells and eliminate unhealthy batteries, does it mean that cascading utilization becomes possible?

Wang Fang from China Automotive Center stated that the cascading utilization of batteries should be conditional, limited, and required. She believes that implementing coding rules in the battery market is beneficial for the subsequent supervision and management of batteries. At the same time, there are also leaders of lithium battery companies who hope to rely on the power battery traceability platform launched this year. If the full lifecycle supervision of power batteries can be achieved through information collection and management, it will be of great significance for the subsequent cascading utilization and residual value development of power batteries.

Waste power batteries are usually priced by ton, which is not cost-effective for battery companies. If the traceability platform can monitor, retired power is expected to be traded based on the remaining battery capacity in the future. But the person in charge also stated that there is still a long way to go to achieve real-time monitoring of battery SOC.

The cost of individual detection and utilization is too high, and fast detection is difficult to achieve. How to carry out cascading utilization? A company has proposed a technological roadmap for module utilization. Can modules avoid the "black box" problem of individual battery cell health?

"At present, BMS technology has made significant progress in monitoring individual battery cells compared to before," said the head of a domestic recycling enterprise. He believes that by balancing modules and complementing each other's strengths and weaknesses, the safety of cascaded batteries can be improved to a certain extent.

In addition to the advancement of BMS technology, there are also third-party enterprise leaders specializing in cascading utilization who suggest installing monitoring devices on cascading batteries to improve their safety. "The equipment monitors the ladder at all times and alarms for abnormal conditions to prevent accidents from escalating."

The Observer of Electric Vehicles has learned that some companies currently prefer to use module utilization or whole package utilization in order to save costs. Balance and add monitoring facilities to battery modules or whole packages, and place them centrally in containers, with a capacity of approximately 1MWh per box, for distributed or centralized energy storage. The price of such energy storage equipment is 1 yuan/Wh, which has certain market competitiveness.

Is it really economical to use retired batteries for energy storage?

Can the use of modules to avoid the problem of individual battery cells enable the proper utilization of cascaded batteries? Some companies have expressed negation of such practices. The head of a domestic lithium battery company stated that the profit point of the energy storage business model lies in the fast charging and discharging of electric energy. "Energy storage companies may need to charge and discharge a box of 1000 kilowatt hours of electricity twice a day to make a profit. Cascade batteries obviously cannot meet the needs of commercial energy storage."

"A power battery that can be charged and discharged for 4000 cycles decays to 2000 cycles. If installed in an energy storage system and only used for peak shaving and valley filling, lithium iron phosphate can last for three to four years, while ternary batteries can only last for two years, which is not cost-effective economically," said Huang Shilin.

Huang Shilin believes that in the future, energy storage systems need to achieve more than 10000 cycles in order to have better economic efficiency. In addition, he believes that in the future, power batteries and energy storage batteries will be two different technological routes, and the cycle life of power batteries will decrease less and less after increasing energy density, making it unsuitable for cascading utilization.

Cascade batteries not only have mismatched performance with energy storage scenarios, but also have high hidden costs.

"The lifespan of the cascading utilization battery and the overall energy storage system are not compatible, and the cost of replacing the battery in the future is high," said the person in charge of a professional third-party cascading utilization enterprise mentioned earlier. Due to the limited lifespan of cascaded batteries, some cascaded utilization projects may encounter issues where the battery lifespan is shorter than that of energy storage boxes, air conditioners, and protective measures. Therefore, the cost of replacing batteries midway is relatively high.

Cascade utilization, focusing on finding the right scene

"The biggest problem with current tiered batteries is that retired batteries cannot find suitable application scenarios," said the person in charge of a certain State Grid company mentioned earlier. If the demand for retired batteries and cascading utilization does not match, it is necessary to carry out restructuring, and the price difference between cascading batteries and new batteries is not significant.

Will there be market prospects for cascaded batteries in other application scenarios as they are not suitable for large-scale use in energy storage facilities?

Zhou Xiaoliang, General Manager of Hangzhou Huanchi Energy Technology Co., Ltd., is a supporter of module cascading utilization. He believes that "currently, in order to meet the requirements of automotive manufacturing, many high cost designs are used on power battery modules. Generally, small battery modules do not have this design and have high utilization value."

Huanchi Energy has turned retired battery modules into household energy storage devices, portable energy storage devices, and some low-speed vehicle power batteries, which have performed well in the market. "These tiered energy storage products have a better market in areas with imperfect power facilities abroad. In addition, we monitor the daily driving demand of three wheeled logistics vehicles, which is about 50km. Retired battery modules can be well matched with them," Zhou Xiaoliang said.

"Although each family's battery pack is different, overall, the adaptability of battery module size is still very high; the module voltage platform is basically between 20V-30V, and our tiered application scenarios are between 12V-72V, which is also relatively matched; most retired modules now have a capacity of 70-80Ah, which is just slightly larger than the batteries of logistics tricycles, and can replace previous battery products very well." Zhou Xiaoliang introduced.

However, some industry insiders have expressed their concerns about whether these small industries can digest the massive retirement power batteries of new energy vehicles?

Cascade utilization should be a consideration at the beginning of lithium battery production design. Wang Fang from China Automotive Center stated that the subsequent application scenarios of batteries in design should be clear.

"At present, cascading utilization should not focus too much on vehicles, but also on the vehicles themselves. The urgent task is to establish a business model for separating vehicles and electricity." Nie Liang, founder of Berten Technology, said, "Rather than taking out batteries to find suitable application scenarios, it is better to directly use them in cascading on vehicles. The battery pack is first used for passenger cars, and when the SOC decays to 90%, it is extracted and replaced for operating taxis. When the battery decays to 60-65%, it is then used for logistics vehicles. However, the premise of doing so is that the vehicle's battery pack and electrical platform must match, and a reasonable business model can achieve the effective utilization of the battery pack."

"The target audience for cascading battery utilization should be some energy storage products that have obvious pain points in the market, such as express delivery three wheeled and four wheeled tour buses that originally used lead-acid batteries but have a high frequency of use. In addition, some products that are not frequently used have also begun to be replaced with cascading batteries, such as the backup of communication base stations replaced by China Tower. Ordinary lead-acid products are heavy and require a large amount of maintenance work. The prices of cascading batteries and lead-acid batteries are comparable, and they also have a comparative advantage." Zhou Xiaoliang said.

Which one do you choose for cascading utilization, dismantling and recycling?

Since there are many difficulties in cascading utilization, why do we still need to make cascading utilization? It's better to dismantle and sell for money.

The Cascade Utilization Project of Great Wall Power (Image Source: Electric Media Company)

Sound Group, which has a layout in solid waste treatment, power battery production, metal recycling, and lithium-ion material processing, has stated that its lithium-ion power battery cascading utilization and recycling business is currently being operated by its subsidiaries, Sound Smart Energy and Hongjie New Materials Co., Ltd.

According to the person in charge of Sander, Hongjie New Materials currently has the ability to recycle and reuse 100000 tons/year of waste lithium batteries. It mainly adopts an innovative process technology combining "fire pretreatment+deep wet recovery" to treat waste batteries. The ultimate benefits vary depending on the materials used in the disposal of discarded batteries. At present, this method is used to deal with ternary waste batteries. Taking 523 as an example, the gross profit from treating one ton of batteries is about 15%. However, if one ton of lithium iron phosphate batteries are also treated, a loss of 800-1000 yuan will be incurred.

Sander stated that for retired lithium iron phosphate batteries, if they meet the cascading utilization standards after comprehensive testing and evaluation, they advocate for cascading utilization as much as possible; After the maturity of the cascading utilization market and the clarification of relevant policies, the subsequent recycling and regeneration will be judged by the market for its market value and economic benefits.

Beijing Saidemei Resource Reuse Co., Ltd. adopts a physical recycling method, and during the processing, the power battery materials are sorted and recycled one by one. Through this recycling method, traditional recycling companies can also recover some of the unprofitable lithium iron phosphate batteries.

Zhao Xiaoyong, Managing Director of Saidemei, believes that power battery recycling is more practical than cascading utilization. At present, the price of power batteries is still relatively high, which is a prerequisite for the cascading utilization of batteries. In the future, the cost of power batteries will decrease, and the commercial prospects for cascading utilization will no longer exist. At present, in terms of products on the market, the number of retired ternary batteries has not yet formed a scale. Most companies recycle power batteries, mainly lithium iron phosphate. In the future, with the increase of ternary battery scrap, economically speaking, more companies should choose to directly dismantle and recycle them.

But Zhao Xiaoyong also expressed his concern that at present, there are insufficient recycling channels and incomplete industry regulations, making it difficult for enterprises to form a scale, which is an obstacle to the profitability of recycling enterprises.

"We should emphasize the environmental attributes of batteries, rather than solely emphasizing their resource attributes. We should pay attention to how to recycle them in a green way, rather than solely emphasizing the value of waste batteries," said Zhao Xiaoyong.

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