The Ministry of Industry and Information Technology (MIIT) of China has recently announced the pilot program of recycling and second use of retired electric vehicle batteries in 17 major regions and cities. China Tower, the world's biggest operator of telecommunication towers, is included as the only company in the pilot program to develop key technologies, explore business models and help establish standards related to second-life batteries. China has a strong momentum on developing solutions and standards for retired batteries from electric and hybrid electric vehicles which are expected to grow explosively over the next ten years, hitting over 100GWh per year by 2029. For more information, please see IDTechEx's latest report on Second-life Electric Vehicle Batteries.
Back to January 2018, China Tower announced partnerships with more than 16 major Chinese EV and battery manufacturers including BYD, Guoxuan High Tech, and YinLong New Energy on second-life electric vehicle batteries. China Tower has close to 2 million telecom towers across China, with around 54GWh battery storage demand for back-up power for their telecom base stations. One single tower needs about 30kWh back-up battery (equivalent to one electric vehicle battery pack) which means in the future the storage demand from the telecom base station back-up only could absorb up to 2 million retired electric vehicle batteries. Currently, there are only 2% Li-ion batteries deployed in China Tower - the majority of the storage batteries are still lead-acid batteries. It is estimated that China Tower spends around CNY20 billion on the back-up lead-acid batteries.
China Tower has been testing second-life electric vehicle batteries as replacement of lead-acid batteries in their telecom base stations across China since 2015. Although somewhat degraded, second-life batteries could still perform better in terms of lifetime degradation and energy density than lead-acid batteries, and they are much cheaper than new Li-ion batteries. In China, currently second-life batteries are priced at the same level as lead-acid batteries (around $100/kWh). China Tower claimed that since 2018 they are not going to purchase lead-acid batteries anymore and all the old lead-acid batteries will be replaced by second-life batteries in the future.
China Tower has long-term steady demand for second-life batteries on a large-scale and the support of the government as the 'demonstration corporation' which makes them the biggest customer of second-life batteries. They are definitely a 'winner' in this business because they get batteries that have better lifetime performance but at the same price as lead-acid batteries. It is not clear whether in the future they are still able to obtain second-life batteries at such a low price. With the volume of second-life batteries as well as the storage demand increases, China Tower is expected to face more and more market competition and the pricing mechanism will change accordingly. More detailed analysis of the cost and pricing of second-life batteries is included in IDTechEx's latest report on Second-life Electric Vehicle Batteries.
If you want to learn more about second-life electric vehicle batteries, be sure not to miss the second-life battery session in our next leading event on the topic: Electric Vehicles: Everything is Changing, USA 2018 on 14-15 Nov 2018 at Santa Clara Convention Center, CA, USA hosted by IDTechEx.
Top image: China Tower