The Hidden Economics of EV Battery Circularity

23 July 2026

Every year, around 20 to 22 million new electric vehicles hit the roads worldwide, creating a rapidly growing market for used EV batteries. But once these batteries reach the end of their life in a vehicle, what makes the most economic sense: giving them a second life or recycling their valuable materials?

In this Research in a Minute video, Dr. Amadeus Bach, researcher at the Mannheim Institute of Sustainable Energy Studies (MISES), set out to answer this question.

Calculating the fair market value

Together with Prof. Dr. Stefan Reichelstein and researchers from Stanford, Prof. Dr. Simona Onori and Jihan Zhuang, Bach developed a model that calculates the fair market value of used EV batteries. By accounting for technological progress and the declining cost of new batteries, the model identifies the financial tipping point between repurposing and recycling.

Battery chemistry makes the difference

The study shows that the answer depends largely on the battery chemistry. LFP batteries, known for their long lifespan, are almost always more valuable when repurposed for a second use, such as stationary energy storage. NCX batteries, on the other hand, often generate greater economic value through immediate recycling because they contain high-value materials such as nickel and cobalt.

These findings provide a roadmap for industry and policymakers alike. The model offers a practical basis for deciding whether future investments should focus on expanding recycling infrastructure or developing facilities for battery repurposing, helping ensure that EV batteries deliver the greatest possible value throughout their entire lifecycle.