A research firm specializing in emerging technologies has advocated that partially depleted electric vehicle batteries be recycled rather than reused for the maximum benefit.

Lux Research, in a report entitled "Reuse or Recycle: The Billion-Dollar Battery Question," estimates that up to 65 gigawatt hours of second life electric vehicle batteries will become available in 2035 after the first generation of plug-in vehicles is retired. The company suggests that the reduced performance of the batteries will result in limited applications for reuse.

"With present technology, recycling old batteries for new materials is the more economical option for creating the most value from existing materials," said Christopher Robinson, lead author of the report and an associate at Lux Research. "That said, innovations in areas like packaging and testing could tip the balance in the future, so companies should have plans for both recycling and reuse."

The report concedes that an 11.2-kilowatt hour residential electrical system using second life batteries would be less expensive than a new seven-kilowatt system, estimating the cost at $4,600 for the former system and $6,000 for the latter. But it suggests that reduced efficiency and cycle life would make second life batteries a poor fit for residential energy storage systems.

The lithium ion battery packs in the current generation of electric vehicles will eventually degrade to a point where they can no longer reliably power an automobile. However, they still retain a significant amount of energy after this point. This condition has fueled the debate over whether partially depleted electric vehicle batteries can be used in new energy storage applications or whether it is better to simply recycle them.

Several metals can be recovered by recycling a battery. John O'Dell, writing for the automotive site Edmunds.com, says nickel, copper, and iron can be recovered from hybrid batteries while non-recoverable materials can be used as fuel in the recycling process. Lithium ion batteries are also considered to be 70 to 100 percent recyclable.

Since battery packs are typically operating at about 80 percent capacity when they need to be retired from automotive use, several automakers are also looking to reuse them before they are recycled. Some possible uses include storing power produced during off-peak periods by solar and wind systems as well as backup power storage for both residential and commercial buildings.

Each automaker has their own strategy for the recycling or reuse of electric vehicle batteries. For example, BMW and Nissan are developing residential energy storage systems, while the German automobile company Daimler has created a 13-megawatt energy storage system using 1,000 used electric vehicle batteries. Tesla has been recycling its batteries, since its nickel-cobalt-aluminum cathodes are not suitable for secondary energy storage.

Lux Research says the reuse of batteries could become more competitive with advances in testing, sorting, and repackaging. However, it says they currently offer only limited cost savings, especially as battery cell prices fall.

Other studies have come to a different conclusion, saying that electric vehicle batteries have plenty of potential for other applications after they are retired from automotive use. A 2014 report by the Mineta National Transit Research Consortium estimates that between 1.38 million and 6.76 million electric vehicle batteries will enter the market by 2035. Researchers determined that remanufacturing batteries for reuse in vehicles was the most economically feasible option, while repurposing them for energy storage was feasible within a certain cost range. By contrast, the report determined that recycling was only cost effective if used as part of a remanufacturing or repurposing process.

In 2015, researchers at the Department of Energy's Lawrence Berkeley National Laboratory determined that an electric vehicle battery depleted to 80 percent capacity would still be able to meet the daily travel needs of 85 percent of American drivers. That study also determined that 80 percent of these drivers would be able to make their regular trips with a battery that was down to 50 percent capacity.

A 2016 report from Navigant Research determined that the capacity of lithium ion batteries for secondary life energy storage will grow by 10 gigawatt hours between 2022 and 2035 as improved batteries are retired. This study found that these batteries can be efficiently used for energy storage, since they can be sold for a lower price than new batteries.