Second Life EV Battery Market Size & Outlook, 2026-2034

Second Life EV Battery Market Overview

The global second life EV battery market size is valued at USD 1,167.2 million in 2025 and is estimated to reach USD 7,654.2 million by 2034, growing at a CAGR of 25.3% during the forecast period. The consistent growth of the market is supported by the rising adoption of electric vehicles (EVs), the increasing availability of retired EV batteries with sufficient residual capacity, and the expanding focus on circular economy initiatives. Additionally, growing demand for cost-effective energy storage solutions, combined with supportive government regulations promoting battery reuse and sustainability, is driving the large-scale deployment of second-life EV battery systems across automotive and stationary energy storage applications.

Key Market Trends & Insights

• North America dominated the market with a revenue share of 36.28% in 2025.
• Asia Pacific is anticipated to grow at the fastest CAGR of 27.45% during the forecast period.
• Based on battery type, the Lithium-ion segment held the highest market share of 72.64% in 2025.
• By battery source, the Passenger Electric Vehicles (EVs) segment is estimated to register the fastest CAGR growth of 26.31%.
• Based on process type, the Repurpose segment dominated the market with a market share of 48.57% in 2025.
• By end use sector, the Independent Power Producers (IPPs) segment is projected to grow at the fastest CAGR of 26.84% during the forecast period.
• The U.S. dominates the market, valued at USD 421.5 million in 2024 and reaching USD 458.7 million in 2025.

Table: U.S Second Life EV Battery Market Size (USD Million)

Source: Straits Research

Market Size & Forecast

• 2025 Market Size: USD 1167.2 million
• 2034 Projected Market Size: USD 7,654.2 million
• CAGR (2026-2034): 25.3%
• Dominating Region: North America
• Fastest-Growing Region: Asia Pacific

The global second life EV battery market includes a wide variety of processes that prolong the battery life of electric vehicles by reuse, repurposing, and refurbishment methods. These methods include collecting retired passenger EVs, commercial EVs, and two- and three-wheelers' batteries, estimating their residual capacity, and re-deploying them into new uses. By type of battery, the market mainly employs lithium-ion and lead–acid batteries, which are redesigned for improved performance and safety. Second-life batteries are more commonly employed by automotive original equipment manufacturers (OEMs), independent power producers (IPPs), energy service companies (ESCOs), industrial companies, residential customers, and mobility service providers in applications like grid-scale storage, backup power, and integration with renewable energy.

Latest Market Trends

Rapid Transition towards Circular Battery Economy

The world second life EV battery industry is experiencing a revolution in a transition from a linear battery life cycle to a circular energy economy. Rather than sending end-of-life vehicle batteries to the landfill, manufacturers and energy firms are embracing reuse and repurpose business models to leverage their utility in stationary energy storage, renewable integration, and industrial use. This revolution reduces raw material dependency, waste, and meets global sustainability requirements. Automotive OEMs and battery manufacturers are setting up reverse logistics and take-back programs, designing closed-loop systems that guarantee economic as well as environmental returns across the value chain.

Sudden Commercialization of Energy Storage Repurposing Projects

Second-life EV batteries are being used more and more in large-scale energy storage and microgrid applications. Utilities and independent power producers are taking EV battery packs and repurposing them as cost-effective storage units for grid balancing, peak shaving, and integration of renewables. These applications show that second-life batteries have 70–80% of their original capacity available, providing good alternatives to new lithium-ion systems at reduced cost. Increased involvement of automakers and energy providers in the ventures underscores the market's shift towards commercial adoption from pilot launches.

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Second Life EV Battery Market Drivers

Expanding Urban Energy Storage Demand and Smart Grid Transition

Urbanization and the move towards global smart grid infrastructure are driving hard demand for distributed energy storage systems. Industrial complexes and cities are incorporating second life batteries to utilize them for demand response, voltage management, and backup power purposes. Government-supported initiatives like Japan's Smart Community Projects and South Korea's Green New Deal are actively funding second life battery integration into city microgrids. These programs increase the resilience of the grid as well as offer scalable opportunities for the reuse of EV batteries in green city planning. Further, increasing investments in decarbonization and electrification of cities are accelerating the uptake of second life battery systems in transit, lighting, and building networks. This shift puts second life batteries ahead as a cost-effective and green-friendly option for smart cities of the future.

Market Restraints

Shortage of Uniform Performance and Safety Guidelines for Reused Batteries

One of the principal constraints in the second life EV battery market is the lack of global harmonized standards for performance, certification, and repurposed battery safety testing. In contrast to new lithium-ion systems, reused batteries exhibit widely variable states of health, chemical composition, and residual capacity, making uniform evaluation and deployment more difficult. European Union's Battery Regulation (2023/1542) requires traceability for new and recycled batteries; it remains short of thorough testing frameworks specific to second life uses. Such a regulatory vacuum restricts investor confidence and retards mass adoption in key sectors like energy storage and grid stabilization.

Market Opportunity

Increasing Demand for Renewable Energy Storage Integration

The rapid global shift towards renewable power generation is generating tremendous opportunities for the application of second life EV batteries for stationary energy storage systems. With renewable sources such as solar and wind increasing, there has been an explosion in demand for low-cost energy balancing and grid stability solutions. Second life batteries offer a cost-effective and environmentally friendly solution to new battery solutions, promoting efficient peak shaving, load shifting, and time-shifting of renewable energy for utilities and industrial consumers. They help store excess energy and release it in periods of peak demand, increasing grid resilience at the expense of fossil-fuel-based backup systems.

Regional Analysis

North America was the market leader in 2025 with a market share of 36.28%. This is driven by the maturity of the electric vehicle ecosystem in the region, advanced recycling units, and rising investments from key auto and energy companies in circular battery initiatives. Growing deployment of gigawatt-scale stationary energy storage projects in the U.S. and Canada is driving the use of repurposed EV batteries for grid balancing and integration of renewables. The region also benefits from solid relationships between automakers, energy utilities, and battery recycling firms, enabling the creation of organized take-back and reuse programs that support the value chain of second life batteries. Increased corporate commitments towards net-zero operations further reinforce market expansion in North America.

Market growth in the U.S. second life EV battery market is propelled by rapid adoption of electric vehicles, with increasing pilot programs for reused batteries for energy storage and backup power applications. Big OEMs and energy developers are partnering to apply second life systems in community microgrids, data centers, and commercial buildings to maximize energy efficiency and grid resilience. State-level clean energy initiatives are driving reuse-based business models forward, encouraging recovery and redeployment of retired EV batteries through local repurposing hubs. As more and more EVs reach end-of-life stages, the American market has the potential to be a significant source of second life batteries for the world's demand, both economically and environmentally.

Asia Pacific Market Insights

Asia Pacific is recording the fastest growth and is poised to reach a CAGR of 27.45% for 2026–2034.This is driven by the rapid growth of EV production capacity across the region and growing battery lifecycle management attention. Repurposing facilities of giga scale are being developed by China, Japan, and South Korea to recycle used EV batteries from the local fleets, while new markets in Indonesia and India are investigating second-life deployment for rural electrification and backup power systems. Strong local production capabilities and increasing inter-industry collaboration between automakers and renewable energy businesses are further propelling the market.

India second life EV battery market is developing steadily as domestic automakers, battery recyclers, and renewable energy developers explore reuse opportunities for improving grid resilience and sustainable electrification.Local new enterprises are investing in modular repurposing options for batteries for telecom towers, small enterprises, and home power backup. The government's focus on adoption of e-mobility in second life and establishment of circular energy ecosystems is indirectly encouraging second life uses by ensuring constant supply of end-of-life batteries. Furthermore, novel models of innovative financing and partnership-based repurposing programs are turning second life batteries into an affordable and sustainable energy storage solution, with India a leading growth area in the Asia Pacific region.

Regional Market share (%) in 2025

Source: Straits Research

Europe Market Insights

Europe still leads the worldwide Second Life EV Battery Market in 2025, thanks to the region's organized battery recycling system and increasing investments into circular energy systems. The European Union's Battery Regulation requires traceability in a transparent way and carbon footprint labeling, supporting large-scale utilization of repurposed EV batteries as renewable storage. In addition, close partnerships between car OEMs and energy utilities are driving second-life battery deployment into grid-balancing initiatives and home storage solutions, especially in France, Germany, and the Netherlands.

Germany's second life EV battery industry is growing fast with strategic efforts to connect EV end-of-life treatment to the country's shift towards renewable energy. Energy firms are partnering with car manufacturers to create big stationary storage batteries fueled by retired EV batteries. For example, joint initiatives among utility companies and automakers are making second-life battery deployment possible in community-sized microgrids and backup power storage systems. Furthermore, local governments are using refurbished EV batteries to facilitate decentralized energy infrastructure, decreasing fossil fuel-based peaker plant dependency and enhancing energy security in Germany.

Latin America Market Insights

The second life EV battery market in Latin America is gathering pace, with Brazil spearheading the continent through its renewable energy integration strategies and conducive waste management policy. The growth in EV uptake and solar capacity addition in the region is fueling collaborations between recycling companies and battery technology startups to give new life to used EV batteries as cost-effective energy storage devices for small industries and off-grid populations. Affordability of repurposed batteries over new lithium-ion units is also adding to market scalability.

Brazil's market expansion is triggered by the application of repurposed EV batteries in powering home solar energy and charging stations for electric buses. Local companies are building second-life battery refurbishment plants next to major automobile assembly areas in order to save on logistics costs and promote domestic value addition. Moreover, policymaking led by sustainability under Brazil's national roadmap for energy efficiency is promoting renewable projects with second-life battery storage, making the nation an attractive hub for circular energy innovation in Latin America.

Middle East and Africa Market Insights

Middle East and Africa second life EV battery market is growing as nations incorporate reused EV batteries into intelligent grid systems and clean energy storage networks. Governments are working on maximizing energy use in areas with high solar irradiance by creating public-private partnerships that divert EV battery waste into beneficial energy storage assets. Furthermore, partnerships among automotive manufacturers and clean energy developers are boosting localized recycling capacities, which align with larger clean energy goals.

The UAE's second life EV battery market is evolving as part of its larger vision for sustainability to pursue energy diversification. Recycled EV batteries are being utilized in solar farms and EV charging points to smooth out energy output and buffer excess solar energy during peak generation periods. Local clean-tech companies are teaming up with global battery experts to open mechanized sorting and testing facilities, guaranteeing safe reutilization of high-grade EV cells. These initiatives are turning the UAE into a regional leader in circular battery value chains and low-carbon storage solutions.

Battery Type Insights

The Lithium-ion segment held the largest share of the market with a 72.64% revenue in 2025. The high energy density, long cycle life, and higher efficiency of Lithium-ion are mainly responsible for its market dominance. It is the most sought-after option for second life use cases like stationary energy storage, grid balancing, and integrating renewable power.

The Lead–Acid segment is expected to experience the highest growth, registering a foreseen CAGR of approximately 27.12% over the forecast period. This is fueled by its low cost and high fitment for backup and off-grid power use, particularly in developing countries with low access to stable power.

By Battery Type Market Share (%), 2025

Source: Straits Research

Battery Source Insights

The Commercial Electric Vehicles segment (LCVs, buses, trucks) had the largest share of revenue at 41.76% in 2025. This is due to the higher battery capacities and shorter replacement cycles of commercial EVs, which create a consistent stream of high-capacity used batteries for second life applications.

The Passenger Electric Vehicles (EVs) segment is expected to exhibit the quickest growth, recording a CAGR of approximately 26.31% through the forecast period. Growth is driven mainly by the increasing passenger EV adoption worldwide and the development of organised collection networks for end-of-life batteries.

Process Type Insights

The Repurpose segment led the market with a 48.57% revenue share in 2025. The dominance of this segment comes mainly from the expanding use of second life batteries for stationary energy storage, renewable integration, and grid stabilisation initiatives. Repurposing enables end-of-life EV batteries with some residual capacity to be reused in new applications, lengthen their lifecycle, and mitigate waste.

The Refurbishment segment is expected to experience the strongest growth over the forecast period. Its growth is being driven by the increasing number of small-scale businesses that focus on battery diagnostics, testing, and reassembly for secondary use. Refurbishment procedures add safety, performance, and reliability to recycled batteries, allowing for economical deployment in home backup systems and low-power industrial uses.

End Use Industry Insights

The Independent Power Producers (IPPs) segment is expected to have the highest CAGR of 26.84% during the forecast period, driven by the increasing installation of renewable energy projects and grid-scale energy storage units. With IPPs using solar and wind power in their generation mix more and more, second life EV batteries offer a cost-efficient and eco-friendly solution to balance energy supply and demand. Their price and their history of smoothing intermittent renewables make them a likely contender for deployment in large-scale storage.

Competitive Landscape

The global Second Life EV Battery Market is fairly dispersed, with a combination of major auto OEMs, energy service firms, and battery repurposing specialists. Some of the major players command a substantial market share by taking advantage of large second life battery portfolios, strategic collaborations, and combined reuse platforms.

Key players in the market are Renault Group, Mercedes-Benz Group, BMW AG, and others. They are competing aggressively to enhance their presence in the market by focusing on steps like technological advancements, strategic partnerships, and acquisitions to enhance their second life battery competencies and deployment in automotive and energy markets.

Redwood Materials – An emerging market player

Redwood Materials, a US-based battery-technology company with expertise in EV battery recycling and reusing, has recently established itself firmly in the second-life EV battery industry.

• In June 2025, the company announced the launch of its new business division, Redwood Energy, focused on repurposing used EV batteries into large-scale stationary storage systems. The first deployment was a 12 MW / 63 MWh system supplying an AI data-centre, sourced from more than 20 GWh of retired lithium-ion batteries annually.

Redwood Materials thus became a significant force in the global second-life EV battery industry, utilizing its vertically integrated logistics, diagnostics, and system integration skills to transform end-of-life EV batteries into commercial energy-storage assets.

List of key players in Second Life EV Battery Market

1. Nissan Motor Corporation
2. Renault Group
3. BMW AG
4. Tesla Inc.
5. General Motors (GM)
6. Mercedes-Benz Group AG
7. Toyota Motor Corporation
8. Hyundai Motor Company
9. Audi AG
10. RePurpose Energy
11. Connected Energy Ltd.
12. Fortum Oyj
13. 4R Energy Corporation
14. BYD Company Limited
15. CATL (Contemporary Amperex Technology Co. Ltd.)
16. LG Energy Solution
17. Voltaiq Inc.
18. Redwood Materials
19. B2U Storage Solutions
20. Eaton Corporation
21. Others

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Strategic initiatives

• June 2025: Stellantis N.V. supports the PIONEER project with second-life batteries
  In this initiative, Stellantis’ SUSTAINera circular-economy division provided 78 used EV batteries (each 50 kWh) for the “PIONEER” system at Rome Fiumicino airport, totaling 3.9 MWh of storage in the reuse system.
• June 2025: Enel X S.r.l. launches 10 MWh BESS utilising second-life EV batteries
  The Enel X “PIONEER” system uses 762 second-life battery packs to create a 10 MWh battery energy storage system at Italy’s major airport, integrating with solar PV and grid services.
• May 2025: Battery X Metals Inc. collaborates with Tesla technicians to validate second-life battery rebalancing system.
• May 2025: Connected Energy and Forsee Power signed a partnership agreement to develop a modular second-life battery energy storage solution using retired electric-bus battery packs. The first 2.5 MWh system is planned for operation later in 2025, targeting scalable deployment across Europe.