With the introduction of specific national policies, the topic of the secondary use of power lithium batteries has recently gained more attention. One question circulating online is: Which type of battery—ternary lithium-ion, lithium iron phosphate, or those using other cathode materials—is more suitable for secondary use?
Regardless of official sources, responsible OEMs for the recall, or Volkswagen, let's look at this issue from the perspective of someone hoping to enter this industry. Where should I invest my time and energy to maximize its value? Value here includes both a high probability of stable returns and a time dimension—that my chosen field will at least still exist in the long run.
It's difficult to give a direct answer to this question, because the profitability of battery reuse doesn't solely depend on whether it's ternary or lithium iron phosphate batteries. Let's shift our focus and discuss what characteristics of batteries are suitable for further development and reuse.
1. Different cathode materials lead to differences in cell performance.
The safety, energy density, and power density of cathode materials are the basic criteria for different vehicle models to choose lithium-ion battery types. However, as will be seen later, the characteristics of power lithium batteries themselves cannot completely determine the performance of secondary use.
1) Lithium manganese oxide
Lithium manganese oxide, as a lithium-ion battery material with a long history of use, boasts high safety, especially its strong resistance to overcharge, which is a major advantage. Due to the inherent structural stability of lithium manganese oxide, the amount of positive electrode material does not need to exceed that of the negative electrode significantly during cell design. This results in a relatively small number of active lithium ions in the entire system; after the negative electrode is fully charged, not many lithium ions remain at the positive electrode. Even in the event of overcharging, a large amount of lithium ions will not deposit and crystallize at the negative electrode. Therefore, lithium manganese oxide has the best overcharge resistance among commonly used materials.
In addition, the material is inexpensive and has relatively low requirements for production processes, making it one of the earliest cathode materials to be widely used.
2) Lithium iron phosphate
The main advantages of lithium iron phosphate (LFP) lie in its safety and cycle life. A key determining factor is its olivine structure. This structure results in both low ion diffusion capacity and good high-temperature stability and cycling performance.
Lithium iron phosphate also has some obvious drawbacks, including low energy density, poor consistency, and poor low-temperature performance.
The low energy density is determined by the chemical properties of the material itself; one lithium iron phosphate macromolecule can only accommodate one lithium ion.
3) Ternary lithium
Ternary lithium cathode materials combine the advantages of LiCoO2, LiNiO2, and LiMnO2, creating a synergistic effect within the same cell. They balance the requirements of material structure stability, activity, and low cost, making them the cathode material with the highest energy density among the three important cathode materials. Their low-temperature performance is also significantly better than that of lithium iron phosphate batteries.
Of the three elements, the higher the Ni content, the higher the energy density of the battery cell, but the lower its safety. In practical applications, the proportions of the three materials in the battery cell have been constantly changing over time. As the pursuit of energy density increases, the proportion of Ni also increases. Furthermore, improvements in battery safety and enhanced system monitoring and accident handling capabilities will further accelerate the expansion of the ternary lithium-ion battery market.
2. A key benchmark for retired power lithium batteries is lead-acid batteries.
Currently, many applications using lead-acid batteries are driven by price sensitivity, not space or performance sensitivity. Once the price issue of retired lithium-ion batteries is resolved, they are highly likely to replace lead-acid batteries in some applications.
Literature has specifically compared the characteristics of lead-acid batteries and lithium-ion batteries for electric vehicles. According to most automakers and battery manufacturers, EV lithium-ion battery packs with 70-80% remaining capacity should be replaced; otherwise, unexpected driving malfunctions and safety issues may occur. Currently, this process typically occurs after 35 years of vehicle operation, at which point the replacement of the electric vehicle's lithium-ion battery pack should be considered.
Although some performance parameters of retired lithium-ion batteries have declined, they still have advantages over lead-acid batteries. As shown in Table 1, retired batteries have significantly higher cycle life and energy density than lead-acid batteries, while lead-acid batteries have a weaker price advantage.
3 Key Factors Affecting Tiered Utilization
1) Testing, screening, and reprocessing costs
The space for reusing retired power lithium batteries may be gradually squeezed as the cost of new batteries decreases. In the short term, they will not be impacted by other types of power sources, including new battery cells after price reductions. This is the primary factor to consider when selecting specific categories of battery cells for cascade utilization.
According to GGII data, by the end of 2017, the price of power lithium batteries had decreased by 20% to 25% compared to the beginning of 2017. The price of lithium iron phosphate battery packs fell from 1.8-1.9 yuan/Wh at the beginning of the year to 1.45-1.55 yuan/Wh at the end. The price of ternary lithium-ion battery packs fell from 1.7-1.8 yuan/Wh at the beginning of the year to 1.4-1.5 yuan/Wh at the end.
News reports indicate that in mid-2017, the energy density of my country's power lithium batteries was 180Wh/kg, and by 2020, this density was expected to continue to increase, reaching 300Wh/kg. By 2020, the global average price per kilowatt-hour of battery systems was estimated to be between approximately 1000 RMB, 100 USD, and 100 Euros.
When the price difference between new and used batteries approaches the combined cost of battery reuse, including testing, reprocessing, equipment replacement, and maintenance of the used batteries, the used batteries may become unusable. If historical data can be utilized, some testing costs can be saved, and this situation will occur later.
Once the incentive to reuse batteries diminishes, the only centralized processing method for power lithium batteries will be dismantling and recycling raw materials. Battery dismantling is likely a longer-term cell processing method. Of course, secondary processing of cells, standardized specifications, module design, battery pack operation models, etc., all affect the secondary utilization of cells. It is also necessary to observe the development of related technologies and the decreasing trend in processing costs.
2) There is room for cost reduction and efficiency improvement in processing technology.
This perspective is actually an extension of 1): What kind of battery cells can achieve small-scale R&D support for mass production and application?
a. Specification consistency
In the early stages of the electric vehicle industry, there were many types of battery cells, but the quantity was not large. The testing of battery cells varied greatly depending on the type of cell, and the parameters were highly individualized. Therefore, it can be said that, to date, battery cells with common specifications such as 18650 are of greater research value.
b. Cells with historical data
With historical data, the extent of abuse experienced by power lithium batteries, overall changes in charge and discharge capacity, voltage, and other parameters are all recorded. Leveraging research findings on the relationship between the external characteristics and internal structure of the battery cells, preliminary consistency evaluations, residual value assessments, and safety evaluations can be conducted without actually possessing the batteries.
Official documents require that new energy vehicles registered after 2017, and those not purchased by individuals, must comply with relevant regulations.
For privately purchased commercial and special-purpose vehicles, relevant data should be uploaded in accordance with the national standard "Technical Specifications for Remote Service and Management System of Electric Vehicles" (GB/T32960). For privately purchased new energy passenger vehicles, relevant data should be uploaded when the vehicle status, charging status, or operating mode changes, but location data is not included. Before this, the data records of battery cells in different vehicles may vary.
3) Scenarios for the secondary utilization of power lithium batteries
Currently, we are familiar with applications such as power storage power stations, new energy power stations, home energy storage, power supply vehicles, low-speed electric vehicles, communication base stations, and new energy streetlights. Regarding the performance requirements and price sensitivity of each application scenario, we lack specific data and cannot draw conclusions. We will discuss this further in a separate topic once we have more detailed data. However, their different needs inevitably influence which battery performance aspects users prioritize when making their choices; this is an objectively existing interconnected relationship.
4. A typical application scenario of retired power lithium batteries: communication base stations
Chunbo Zhu's 2017 IEEE paper, "Effect of maintaining cycle life on a economy of retired electric vehicle lithium-ion battery second-use in backup power for communication base station," presents a reasoning model for the use of power lithium batteries in communication base stations. The paper has a publication cycle, and the data is for reference only. This case illustrates that detailed information about the application scenario is crucial for evaluating the suitability of a particular battery cell. Therefore, making overly general assessments of suitability is unscientific.
1) Working conditions and application scenarios
In my country, the number of communication base stations is enormous, and their distribution is widespread. More and more base stations are being built in remote suburbs, along roadsides, and on mountaintops. With technological advancements, renewable energy sources such as solar and wind power are now widely used to supply power to base stations in remote areas where the power grid cannot reach.
Currently, the market price for purchasing lead-acid batteries and the subsequent processing costs are RMB 0.6/Wh and RMB 0.2/Wh, respectively. The testing standards developed by my country Tower Corporation require lead-acid batteries to have a cycle life exceeding 200 cycles. Based on research by the communication base station management unit, the operating conditions, application scenarios, and related detailed parameters of the backup power supply for communication base stations are listed in Table 2.
Table 2. Base Station Operating Conditions and Application Scenario Parameters
*In new energy scenarios, solar energy is used as the power source for the base station and to charge the battery pack during the day. At night, a backup battery pack is used to maintain the operation of the base station. The battery pack is equivalent to one charge-discharge cycle per day.
**High-temperature scenarios and three or four power scenarios mean 4.5 power outages per month.
***One or two power scenarios means 3.5 power outages per month. Battery power will only be used during normal power outages.
2) Cost Calculation Model
Regardless of the operating conditions of the backup power supply, the parameters to be analyzed when comparing the operating conditions of backup lithium-ion batteries and lead-acid batteries are the same. These parameters mainly include: battery capacity, purchase price, installation and replacement costs, power output, battery pack disposal costs, different operating strategies determined according to operating conditions, battery power requirements, and battery discharge time.
Below are the formulas for the various cost estimation parameters. In cost analysis, the most important indicator is the average annual cost saving of retired lithium-ion batteries compared to lead-acid batteries. This indicator directly reflects the economic efficiency of retired lithium-ion batteries and can be calculated using formula (1).
in:
R: Annual cost savings rate, %;
Pbaac: Average annual cost of lead-acid batteries, in tens of thousands of RMB;
LiAAC: Average annual cost of retired lithium-ion batteries, in tens of thousands of RMB.
Assess annual costs according to formula (2).
in:
AAC: Average annual cost, in RMB 10,000/year;
cost: Estimated or total cost of the operation period, in ten thousand RMB;
Topr: Estimated or operating period, in years.
Estimate the total cost of the operating cycle (COST).
Key factors include the total cost of the backup battery pack; subsequent maintenance costs; initial installation and replacement costs of the battery pack; and the residual value of the used battery pack. When calculating the operating cycle, both calendar life and cycle life are considered.
in:
Topr: Estimated or operational period, in years;
Pb_Tperl: Cycle life of lead-acid battery pack, in years;
Pb_Tcal: Calendar life of lead-acid battery pack, in years;
Li_Tperl: The cycle life of a retired lithium-ion battery pack, one year;
Li_Tcal: The usage time of the retired lithium-ion battery pack calendar, in years.
The battery cycle life duration (Tperl) is determined by the battery's cycle life (Ncl) and operating strategy (Noc). The operating strategy refers to the number of charges and the number of discharge cycles completed by the battery pack per day based on operating conditions and application scenarios. This parameter can be calculated using (4).
3) Analysis of estimation results
Currently in my country, the price of new power lithium batteries is approximately 2.2 yuan/Wh, the average price of retired lithium-ion batteries is approximately 0.73 yuan/Wh, and the cost of screening and remanufacturing components is approximately 0.60 yuan/Wh. Considering that the use of retired lithium-ion batteries is currently in the trial operation phase and there is still room for price increases after mass production, the price of retired lithium-ion battery systems usable in base stations is set at 1.1 yuan/Wh. my country's 13th Five-Year Plan set the price of lithium-ion batteries at 0.8 yuan/Wh. Based on the current ratio of new to old batteries, it is estimated that the price of retired lithium-ion batteries should reach 0.265 yuan/Wh after the completion of the 13th Five-Year Plan. Considering the proportion of usable batteries (some batteries cannot be reused for various reasons, tentatively set at 50%) and the capacity decay of retired lithium-ion batteries (tentatively set at 70%), and based on the current battery screening and grouping methods, the estimated price of the readjusted retired batteries is 0.265/50%/70% = 0.757. Therefore, a target unit price of 0.7 yuan/Wh is used for comparative analysis.
The battery pack can be obtained at a cost of 0 after the battery is scrapped. The purchase price of the screened and recombined batteries is set at 1.1 yuan/Wh and 0.7 yuan/hour, respectively. The cost savings rate of retired lithium-ion batteries compared with lead-acid batteries under various operating conditions is shown in the figure below.
In the new energy sector, when the remaining cycle life of retired lithium-ion batteries is 443 cycles (purchase price 1.1 yuan/hour) and 286 cycles (purchase price 0.7 yuan/hour), the total cost of retired lithium-ion batteries is the same as that of lead-acid batteries. With the increase in remaining cycle life, the economic benefits of retired lithium-ion batteries increase significantly. This is important because in this scenario, the battery pack operates by completing one charge-discharge cycle per day, making the remaining cycle life the most crucial factor affecting economic efficiency; economic benefits are sensitive to remaining cycle life.
In three other application scenarios, even with different purchase prices, the savings rate reaches a fixed value when the remaining cycle life of the retired lithium battery is 219 cycles (high-temperature scenario), 214 cycles (one or two charge/discharge cycles), and 274 cycles (three or four charge/discharge cycles). Furthermore, the cost savings rate does not increase with further increases in remaining cycle life. For example, in the high-temperature scenario, the battery pack operates on approximately 4.5 charge/discharge cycles per month. Therefore, the battery pack's calendar life is a crucial factor affecting economics, and the cost savings rate is sensitive to calendar life. Actual calculations for this scenario show that when the lead-acid battery has a cycle life of 200 cycles and the retired lithium-ion battery has a remaining cycle life of 400 cycles, the cycle life times can reach 3.65 years and 7.31 years respectively, which is much longer than the corresponding calendar life times (2.5 years for lead-acid batteries, approximately 137 cycles) and 4 years for retired lithium-ion batteries, approximately 219 cycles). According to the economic calculation model, the parameter useful in the calculation is the battery's calendar life; increasing the remaining cycle life does not improve cost savings. The other two scenarios are similar, so they will not be repeated here.
1) Battery cells with clear historical data, whose safety and residual value can be assessed through data analysis, have a greater advantage for secondary use;
2) Standardized specifications, including appearance and performance parameters, are essential for large-volume battery cells, such as the mainstream 18650 capacity. With the implementation of official battery standards and the gradual accumulation of market experience, the standardization of battery cells and battery packs is expected to improve, making them increasingly suitable for reuse.
3) For battery cells with overly complex specifications and too small a quantity of a single type (in the early stages of the power lithium battery market, the types of battery cells were quite complex), it would probably be more reasonable to recycle the raw materials and dispose of them centrally.
4) Considering specific application scenarios and evaluating the economics of retired batteries based on benchmark products is a good way to develop secondary utilization products for power lithium batteries, rather than making a direct judgment.
