How Used EV Batteries Can Reduce the Total Cost of Ownership of EVs
Reused EV batteries can significantly lower the total cost of ownership by reducing replacement costs, extending vehicle lifespan, and improving resale value. Many “used” batteries still retain strong performance and can be redeployed in vehicles or energy storage, turning a former liability into an asset. Scaling a trusted, compliant secondary market is key to unlocking these economic and sustainability benefits.
Introduction Electric vehicles (EVs) are often positioned as the future of mobility - cleaner, quieter, and increasingly cost-efficient. Yet one major concern continues to influence purchasing decisions: total cost of ownership (TCO). While EVs typically offer lower running costs than internal combustion vehicles, the high upfront price and uncertainty around battery replacement remain key barriers. A growing and often overlooked solution lies in the reuse of functional EV batteries. By enabling a secondary market for these batteries, the industry has an opportunity to
significantly reduce TCO for both current and future EV owners. The Battery: The Largest Cost Component The battery pack is the single most expensive component in an electric vehicle, often representing 30-40% of the total vehicle cost. While battery longevity has improved, degradation over time is inevitable. When performance drops below acceptable levels, owners are faced with a difficult choice: Replace the battery at a high cost Sell the vehicle at a reduced value Continue using the vehicle with reduced range This is where the concept of reused, functional
batteries becomes highly relevant. What Is a “Used but Functional” EV Battery? Not all batteries removed from vehicles are at end-of-life. In fact, many retain 70-90% of their original capacity when they are removed due to accidents, insurance claims, or vehicle write-offs. These batteries can still be highly valuable for: Direct reuse in another vehicle (repair market) Repurposing for stationary energy storage (ESS) Refurbishment and resale By treating these batteries as assets rather than waste, a new economic layer is introduced into the EV ecosystem.
Direct Impact on TCO 1. Lower Replacement Costs A reused battery can cost significantly less than a new one - often 30–60% cheaper depending on condition and traceability. This directly lowers the cost of major repairs and extends the usable life of the vehicle. Effect on TCO: Reduced maintenance and replacement costs over the vehicle’s lifetime. 2. Increased Residual Value Vehicles with access to a reliable secondary battery market become less risky assets. Buyers know that battery replacement is not a “total loss” scenario. Effect on TCO: Higher resale value and
lower depreciation. 3. Reduced Insurance Costs (Long Term) As insurers gain confidence in predictable battery repair costs, the total cost of claims decreases. This can translate into more competitive insurance premiums over time. Effect on TCO: Lower annual ownership costs. 4. Extended Vehicle Lifespan Affordable replacement batteries allow vehicles to remain in operation longer, delaying scrappage and maximizing asset utilization. Effect on TCO: Lower cost per kilometer driven over the vehicle’s lifetime. System-Level Benefits Beyond individual
vehicle economics, the reuse of EV batteries contributes to broader efficiencies: Reduced demand for new battery production, lowering pressure on raw materials Lower lifecycle emissions, improving sustainability credentials More efficient capital utilization, as existing assets are reused rather than discarded This creates a positive feedback loop: as the reuse ecosystem matures, costs decrease further, adoption increases, and TCO improves across the market. What’s Needed to Unlock This Value Despite the clear benefits, the secondary battery market is still underdeveloped. Key
barriers include: - Lack of standardized testing and state-of-health verification - Regulatory uncertainty around waste vs. product classification - Limited transparency and trust between buyers and sellers - Fragmented supply from dismantlers and insurers To fully realize the TCO benefits, the industry needs infrastructure that ensures: - Traceability and compliance - Verified battery data and diagnostics - Trusted transaction frameworks - Efficient logistics and handling Conclusion Used EV batteries represent one of the most powerful levers to reduce the total cost of ownership
of electric vehicles. By transforming what was previously considered waste into a structured, tradable asset, the industry can unlock both economic and environmental value. For consumers, this means more predictable costs, higher residual values, and longer vehicle lifespans. For the broader ecosystem, it accelerates the transition to a truly circular and sustainable electric mobility system. The shift is already underway. The question is not if reused batteries will impact TCO - but how quickly the market can scale to make this the new standard.