Residential Energy Storage from Repurposed Electric Vehicle Batteries: Market Overview and Development of a Service-Centered Business Model

• Main Authors: Brauer, Sebastian, Monhof, Markus, Klor, Benjamin, Plenter, Florian, Beverungen, Daniel, Siemen, Christian
• Format: Conference Proceeding
• Language: English
• Subjects: Adaptation models; Automobiles; Automotive engineering; Batteries; Business; electric vehicle batteries; Electric vehicles; lemon market theory; repurposing; second-life battery energy storage; service science
• ISSN: 2378-1971
• DOI: 10.1109/CBI.2016.24

Sales figures for electric vehicles still lag behind expectations. Most prominently, limited driving ranges, missing charging stations, and high purchase costs make electric vehicles less attractive than gas-operated vehicles. A huge share of these costs is caused by the electric vehicle battery. Since the batteries' performance degrades over use and time, replacements become necessary to restore the vehicle's driving range, acceleration, and charging speed. Despite the degradation, repurposing used batteries for a further use in less demanding second-life application scenarios seems feasible and desirable. However, neither a market nor business models for further using electric vehicle batteries exist, yet. In this paper, we set out to review existing business models for residential battery energy storage systems and suggest a re-design to open up a market for storage systems that build on used electric vehicle batteries. The re-design is informed by lemon-market theory. To mitigate market failure caused by asymmetric information, the re-designed business model strongly bases on offering value-added services. The services compensate perceived defects of used batteries and signal their quality. With these results, we provide much-needed conceptual insights on how business models for repurposed electric vehicle batteries could be established.