From Cars to the Grid: The Financial Promise of Giving EV Batteries a Second Use

Researchers compared new batteries with repurposed electric vehicle batteries used to store electricity during cheaper hours and sell it when prices rise. Their analysis explored how aging, downtime, maintenance and the practical difficulties of collecting and preparing used batteries change the financial picture.

A battery that no longer meets an electric car's needs may still have useful years ahead storing electricity for the grid. Research examining Turkey's electricity market suggests these retired batteries could deliver better investment returns than new storage systems when their purchase price is low enough. Their financial appeal comes from giving existing equipment another job, even with reduced performance and higher maintenance needs.

The study, "Technical and Economic Evaluation of Battery Storage Arbitrage in Turkey's Electricity Market: Integrating Battery Degradation and Circular Supply-Chain Constraints," was published in Sustainability. Researchers compared new batteries with repurposed electric vehicle batteries used to store electricity during cheaper hours and sell it when prices rise. Their analysis explored how aging, downtime, maintenance and the practical difficulties of collecting and preparing used batteries change the financial picture.

The findings offer a promising case for reuse, with a reminder that attractive calculations depend on the assumptions behind them. Adding more realistic operating conditions cut the new-battery project's estimated net present value by nearly 78% compared with the simplified starting model. Reused batteries retained an advantage because a 40% reduction in upfront costs outweighed their lower efficiency and shorter working life.

How storing electricity creates value

The researchers modeled a hypothetical power plant producing one megawatt-hour of electricity every hour, comparing immediate sales with sales supported by battery storage. They used hourly 2024 prices from Turkey's electricity market operator, EPİAŞ, selecting representative weeks in January, April, July and October. Each week represented a season, providing a manageable snapshot rather than a complete year of hourly operations.

The trading rule directed electricity into storage when prices fell below the daily average, making that energy available for higher-priced periods. This approach increased the value earned from existing generation without requiring the plant to produce more electricity. The simplified baseline assumed sufficient storage capacity, uninterrupted availability and 85% round-trip efficiency, meaning 85% of the energy entering storage could be recovered.

Estimated additional annual revenue reached $89,179 before maintenance and investment costs, with monthly gains around $9,800 in January and $5,000 in July. Wider winter price swings created stronger earning opportunities, showing why differences between cheap and expensive hours matter more than high prices alone. With a $250,000 investment, a ten-year lifetime and a 7.75% discount rate, the baseline produced a reported net present value of $297,972, a 30% internal rate of return and discounted payback of three years and nine months.

Why used batteries came out ahead

The expanded comparison introduced declining usable capacity, downtime and higher maintenance costs, with both systems available for 93% of the time. New batteries were assigned eight operating years, annual maintenance starting at $12,000 and efficiency falling from 85% to about 77%. Repurposed batteries received seven years, maintenance starting at $14,000 and a constant assumed efficiency of 80%, with usable capacity declining throughout their service.

The new system's reported net present value fell to $66,490, compared with $81,219 for the reused system, a measure of projected value after discounting future cash flows and subtracting the initial investment. Internal rates of return were 14.8% and 22.8%, with discounted payback taking five years and seven months for new batteries and three years and eleven months for reused batteries. The decisive difference was the reused system's $150,000 upfront cost, including procurement, testing and repurposing, compared with $250,000 for new equipment.

New batteries generated more operating income, with first-year revenue after maintenance reaching $62,643 against $48,446 for reused batteries. Converting project values into comparable annual amounts to account for different lifetimes still favored reuse, at $15,476 against $11,462. The reused system's discounted cost-to-revenue ratio was 11.3% lower, a financial comparison that should not be confused with an 11.3% reduction in storage costs per unit of electricity.

What could change the financial result?

Purchase price, financing conditions, efficiency and usable capacity all influenced the second-life system's returns. A 15% change in upfront cost moved net present value by $22,500, and a five-percentage-point change in efficiency moved it by roughly $20,400. Higher financing costs weakened returns, and modeled electricity-price growth improved them, showing how technical performance and market conditions shape the same investment.

Shortening the reused system's life to five years left a positive modeled net present value of $32,576, with longer operation providing greater returns. The baseline used lithium iron phosphate batteries, known as LFP, and substituting nickel-based NMC or NCA chemistries reduced projected value by $11,000–$19,000 through faster assumed degradation. These comparisons assumed graphite anodes; other anode materials bring different durability, cost and performance trade-offs that were discussed without being fully modeled.

The study's second-life valuation excluded money recovered from selling or recycling batteries after retirement. Adding an assumed $7,500 residual value raised net present value to $85,666, a relatively small improvement. LFP batteries contain no high-value nickel or cobalt, making their additional working years especially important to the economic case presented here.

Making a second life work outside the model

Collecting retired batteries, transporting them safely, checking their condition and matching unevenly aged cells all require money and reliable information. Missing vehicle-use histories can make remaining battery life difficult to judge, and poorly matched cells can restrict an entire pack's performance. The researchers highlight local collection and testing facilities, standardized health checks and battery passports as ways to improve traceability and reduce uncertainty.

Service models such as Battery-as-a-Service could let customers pay for storage access, with specialist providers retaining ownership and responsibility for maintenance and eventual recycling. Extending battery use could delay demand for newly manufactured storage and virgin materials, supporting renewable electricity integration and a circular economy. Those environmental benefits were discussed rather than measured through a dedicated life-cycle assessment, and their scale depends on battery condition, transport distances and repurposing needs.

The findings remain model projections, using four representative weeks, simplified aging assumptions and broad allowances for supply-chain costs rather than a working installation's full operating record. Battery size was not optimized, calendar aging and sudden late-life deterioration were excluded, and Turkey-specific logistics costs were not separately calculated. Full-year simulations, measured battery-health data, better trading strategies and additional income from grid services would help establish where second-life storage can deliver the strongest practical returns.