How is the second life battery market playing out?
Since electric vehicles (EVs) began moving into mass adoption, questions have persisted about what happens to their batteries at the end of life (EoL). Recycling remains the obvious answer, but there is a growing interest exploring the intermediate step of giving used EV batteries a “second life” in stationary energy storage before they head to the recycler.
What does the market look like?
Today, the industry is small, accounting for less than 0.1% of grid-scale projects in North America and just 0.2% in Europe according to Rho Motion’s BESS Database. Deployment has been led mainly by players with direct access to EoL cells such as battery recyclers or automakers.
Notably, China, the world’s largest battery energy storage system (BESS) market, has effectively banned second-life projects. Regulators imposed the restriction in response to safety concerns, following a spate of battery fires in 2021 associated with second life installations.
A technology mismatch?
While second-life batteries extend usable cell lifetimes, no large-scale storage developers are looking to the technology. The BESS industry has evolved with increasingly bespoke and optimised technology. The cells and systems used in EV batteries often differ widely from those used in BESS, complicating integration. However, that is not to say there will not a be a place in the market for them.
Notable players in the market
In the US, battery recycler Redwood Materials is seeking to establish itself within the second-life industry. With access to over 20GWh of EoL EV batteries each year, the company is well positioned in the supply chain to pilot second-life applications. It has established a 63MWh microgrid project at a site in Nevada which is used to power a datacentre. This is largest second-life project in Rho Motion’s BESS Database. Redwood says the project requires more intensive management than new-cell systems, with regular battery replacements needed and a larger physical footprint to maintain capacity.
In Japan, Toyota has also been experimenting with second-life systems, launching its Sweep Energy Storage System in 2022. In August 2025, the company announced it had begun testing the platform at a Mazda factory.
Where does the opportunity lie?
For now, the roll-out of second-life projects will remain small, but considering the pace of expansion in global storage markets the potential for growth is there but in limited setting. Smaller scale commercial and industrial (C&I) applications could be a key area for use, where cost advantages may outweigh technical drawbacks.
> 
> 
> 
> 
> 
> 
> 
>