Reuse and recycling represent the smallest area of opportunity for used electric vehicle batteries, but remain important, according to a recent report from British consultancy Circular Energy Storage (CES) Research and Consulting.
Exports of used vehicles account for the main value in EV batteries, CES said in its 2025 battery lifecycle report. The firm specializes in collection and analytics for end-of-life lithium-ion batteries. The report estimates that 28,000 used EVs were exported from the US in 2024, and 30,000 from the European Union.
Although smaller than the export market for used EVs, the reuse sector is growing for EV batteries and recycling is the smallest by value, the report said, citing long in-vehicle lifetimes and high export ratios for suppressing volumes of end-of-life batteries.
“Recycling has an important role to play, but as long as batteries deliver higher value in other markets, that is where they will go,” the report said. “Downstream activities can never outcompete upstream value.”
For the US and Europe, feedstock of end-of-life batteries will remain small through the 2020s, dominated by nickel- and cobalt-based batteries, with lithium iron phosphate (LFP) gaining share into the 2030s. In China, feedstocks will become substantial earlier and volumes will be much larger, with a heavy share of LFP with high-nickel volumes remaining substantial.
An ‘overlooked weak point’
In a recent blog post, CES managing director Hans Eric Melin called low residual values “the overlooked weak point in the EV transition.”
According to the report, “The imperative is to maintain the highest value possible throughout the product’s life: repair where viable, enable direct reuse and repurposing, and eventually route batteries to recycling.
“Done well, circular activity can help to stabilize residuals and keep products in their original markets, supporting jobs, reducing environmental burden, and safeguarding the industry.”
The report went on to recommend that policymakers reward value preservation and in-market retention, in addition to incentivizing new products.
Moreover, the report said that sustainable growth requires business models that maximize the value of the batteries deployed and the highest-value reuse often lies in direct reuse in the same vehicle model. However, because of limited scalability and unpredictable, model-specific demand, growth paths for this sector are harder to forecast.
End-of-life activities will always represent a smaller market share than active use, but “in a margin-pressured market, even smaller pools can matter when they’re repeatable and well-operated,” the report said.
CES published its first report in 2020 and found that EVs could remain in service for up to 20 years, that future volumes of used batteries would be strongly influenced by vehicle export patterns, and that all markets were trending toward a state of recycling.
Potential solutions
Solutions to the problems that the report lays out are as yet largely stuck in the proposal stage, with few new business models to address them, Melin said in his blog post.
“This means that if you make chemicals, cells, or operate reuse companies or recycling facilities, this is not your job to fix. That also means you can’t let your business rely on hope that the automotive industry will be that locomotive you hoped for. Your market is defined by the cars that automakers sell, sustain, and keep on the road.”
However, first in Melin’s list of solutions is to alleviate the common consumer fear of a dead battery. “Carmakers need to use smart diagnostics, share real-world data on degradation, and publish clear policies for replacement costs once warranties expire,” he said.
Even so, Melin said in the blog that increasing the low residual value of EVs doesn’t mean “recyclers, reuse companies, and circular industries waiting to harvest those materials will never see them. It doesn’t make the cars less circular, just that the circular value creation will take place in other markets than the original ones.”
