Asset or liability? The future value of used batteries

For many years, CES data has shown that the perceived tsunamis of waste batteries — claimed by both researchers and startups — are neither tsunamis nor arriving as fast as predicted. With data covering over 25 years of battery deployments and recycling volumes, collected and refined over the past decade, we have a strong track record in guiding the market. And usually, our guidance has meant telling the industry to calm down.

However, as time goes by, it also becomes necessary to point out that volumes will in fact increase — and that this will have a substantial impact on the market.

In 2030, the global supply of used lithium-ion batteries will be almost three times higher than in 2025. By 2035, it will be eight times higher. That covers all types of lithium-ion batteries. But if we look only at EV, ESS, and industrial batteries — long-lived batteries which made it to the market first 15 years ago — the increase will be significantly steeper.

For recyclers in several parts of the world, this is of little immediate relief. The industry, which is extremely dependent on both upstream and downstream developments, mostly thrives when competition for feedstock is limited. In many markets today, competition is instead fierce, leaving operators with a choice between accepting razor-thin gross margins for volume or accepting that the bottom line is destroyed by low revenues and high fixed costs — even when gross margins appear sound on paper.

This is why pointing at future 2x, 4x, or even 10x increases in volume makes little difference to recyclers today. It is not about what is to come, but how to survive the journey.

The players that should look into the future

What is interesting is that these future numbers should be of far greater concern to other market participants: OEMs, battery manufacturers, and producer responsibility organisations that are placing batteries on the market today or are assuming the obligation to take them back in the future.

This is especially relevant in European countries where the EU Battery Regulation now requires battery producers to take financial responsibility for the end-of-life management of the batteries they place on the market. Including its financing.

This has already become a significant challenge — not least for ESS companies, some of which by PROs are being quoted amounts that could add 25% to 30% to the total cost of the systems they are deploying. This happens because they, and the organisations hoping to represent them, collect prices from recyclers that are in the red and trying to do everything they can to drive cash flow both upstream and downstream.

But here is the problem with using those prices to plan. They represent a completely different market.

Our lifecycle data shows that most EV, ESS, and many types of industrial batteries will celebrate their tenth birthday inside their applications. For EVs, over 50% of the batteries placed on the market will still be in use beyond their 17th year.

This means that batteries placed on the market today will start reaching end of life at meaningful scale around 10 years from now.

In Europe, we estimate that 5.8 GWh of EV, ESS, and industrial batteries were either decommissioned or dismantled in 2025. In 2030, that figure will be 28 GWh — an almost fivefold increase. By 2035, it will be 106 GWh — more than 18 times higher. And this is after export of applications has been taken into account.

A market 18 times larger is a fundamentally different market. It allows efficient consolidation of larger volumes. It makes transportation more efficient, especially in Northern Europe where larger volumes will emerge first. It enables recyclers to compete at scale, where higher throughput can justify lower margins and drive genuine cost efficiency. And the ten years in between will reveal how direct reuse markets have matured — including repowering of ESS systems, redeployment of industrial batteries, and direct replacement of batteries in EVs.

Using today's recycling costs and gate fees to estimate what end-of-life management will cost in that market is not just imprecise. It will be very wrong — and it risks hampering the deployment of batteries today.

A market that is largely predictable

At CES, we realised several years ago that this market is largely predictable. By using granular data where batteries and applications are tracked as the products they are — with specific configurations in specific applications — and by applying first-principle analysis of costs in both recycling and reuse as well as in manufacturing and deployment of new batteries, it is possible to forecast with reasonable accuracy whether batteries will come at a cost or continue to generate revenues when reaching end of life.

Since then, we have continuously collected and refined the data that supports these forecasts.

One of our most important data streams is observed prices of used EV batteries. These batteries tell stories that differ significantly from other industrial batteries: they are designed for very specific vehicles, carrying higher value if they can be resold back into that specific market, but also offering the possibility of reuse in other applications. We have learned how important business models and small tipping points — warranty expiration, inventory saturation, the gap between new and used battery prices — are for how this market behaves. And by collecting data at a granular level, we have learned to recognise the different dynamics that come with different batteries.

For ESS batteries, we have tracked the emergence of a secondary market that, unlike the EV market, started from essentially nothing and continues to develop — with significant ad hoc pricing that is expected to mature as markets become more liquid and efficient.

The principle that matters most

There is an important principle that runs through all of this. The market grows organically.

The common narrative of feedstock tsunamis and mountains of waste implies that volumes appear suddenly and that markets are unprepared. This is not how it works.

Markets are built over time, adapting to increasing supply and demand. They can indeed be volatile — facing periods of both overcapacity and shortage — but they develop, and they adjust. Just as the saying goes in raw materials: the best cure for high prices is high prices. The path forward will not be straight, but it will be navigable for those with the right data.

What is true is that the end-of-life market for lithium-ion batteries in ten years will be far more mature, will support many more players, and will be significantly more predictable than the market today.

And what is equally true is that nobody benefits from undervaluing batteries in this market. Not even recyclers. What we have demonstrated over time is that low downstream value only diverts material higher up in the value chain — reducing the volume of batteries available for domestic processing. We have seen this clearly in the declining prices of used EVs, which accelerate the export of vehicles and their batteries to markets where they are repaired and driven for several more years. The batteries leave the home market entirely and never enter the domestic recycling system.

Getting the value right matters — for producers planning their obligations, for PROs setting their fees, for recyclers pricing their services, and for reuse companies evaluating their opportunities.

Introducing the CES Used Battery Value Forecast

Over the coming months, we are rolling out the CES Used Battery Value Forecast as part of both our advisory services and as available forecasts on CES Online.

The Used Battery Value Forecast draws on all of our data — observed used battery prices, lifecycle research, material prices, recycling cost modelling, reuse market analysis, and trade flow data — to project what batteries will be worth during and after their use.

To get these forecasts right, three things matter: granularity, context, and continuous updates.

Granularity, because batteries throughout most of their lives are part of other products — and their destinies are tied to those products, which have different replacement rates, value retention characteristics, and exposure to trade and export.

Context, because value is highly connected to local market circumstances. A market with strong competition for reused batteries or with several competing pre-processors will price feedstock significantly higher than one with limited demand and no competition.

And continuous updates, because markets change in response to their own signals. A highly competitive market will at some point cool down as weaker players exit, just as a blue ocean with almost no competition will attract new entrants. Raw material prices continuously shift feedstock economics, and sustained price levels can also have structural effects on which players survive and which routes batteries take.

Our goal is to help battery producers, companies that have placed batteries on the market, PROs managing their obligations, and the recycling and reuse industries to identify the right underlying value of batteries — both today and over the full lifetime of their portfolios.

As we have argued in earlier editions of Market Signals, the biggest value in the real battery economy is not generated by production — it is generated by usage. It is therefore critical to lower any barrier to profitable usage. That includes end-of-life costs that are set too high because they are based on the wrong data, as well as depreciation that is too aggressive because residual values are not understood.

At the same time, it is important that there is a viable business for players in the end-of-life industry — and that every participant in the value chain eventually bears its own costs.

This is why we aim to add analytical transparency to the market — enabling players who come from different directions, and sometimes with different goals, to make decisions based on the same underlying information. That is not the same thing as setting or advising on prices. Actual prices reflect service levels and individual company strategies. But by making the fundamental value trajectory visible through data, we believe we can offer a tool that helps this market grow even faster than it already is.

Read more about the CES Used Battery Value Forecast and how it can support your end-of-life strategy