Author: Lukas Marthaler, Innovation Consultant at Bax & Company
The energy transition isn't solely about producing renewable energy; ensuring its accessibility at the right place and time is just as important. Back in 2016, the founders of betteries identified the need to tackle energy poverty in regions with limited access to reliable and affordable energy sources. At the same time, they recognised the emerging waste stream of used EV batteries. Combining these two insights, they spent the period between 2016 and 2018 researching the upcycling of end-of-life EV batteries. After a successful R&D phase, betteries AMPS was launched. Today, the company produces certified, circular, mobile, modular, and multi-purpose energy storage systems, that can replace common fuel-powered generators.
How does betteries repurpose spent EV battery packs?
To understand battery repurposing, the potential of spent EV batteries must be recognised. In short, EV batteries normally have a remaining capacity after they have been discarded from their use in the EV. To illustrate: the industry standard minimum operating capacity of EV batteries lies between 70-80 %. betteries leverages this remaining potential. The company sources used EV battery packs after their first life, currently mainly from the Renault Group. Subsequently, the battery packs are dismantled into battery modules at the Renault repurposing centre (so-called Refactory) in Flins, close to Paris.
A unique aspect of betteries systems is that they are built using 2nd life batteries, whilst other repurposers have so far used discarded cells from battery development and production processes. By looking into their first-life usage data and State-of-Health measurements, battery modules are sorted based on their remaining capacity. Modules are upcycled into modular building blocks, called betterPacks, that operate at 48 V DC, have a capacity of 2.3 kWh, and provide up to 2.6 kW of power. betterPacks modular design allows for varying sizes of energy storage to be produced using the same building blocks (from 2.3 - 13.8 kWh), as well as easier dismantling processes after the battery’s 2nd life. Once the modules are assembled and equipped with a BMS, the energy systems are connected to a digital business platform which allows asset tracking and energy management. In total, over 1 MWh of battery capacity is in operation with their customers.
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The business model
Since its launch, betteries' main value proposition focused on replacing generators, especially in emerging economies where millions of 3 kVA fuel-based generators are used for remote power supply. Petrol and diesel generators, however, struggle with reliability and are maintenance intensive. They also heavily pollute the air, causing environmental and health issues. Renewable energies such as solar and wind are becoming increasingly common also in developing countries, creating an opportunity for a clean power supply. After this initial phase, the Covid-19 pandemic pushed the company to develop a new value proposition serving markets in Europe, closer to home. The new additional focus includes mobile energy storage for the film and lighting industry, festivals, and construction sites. Like in remote areas in developing countries, these markets require reliable off-grid power supply.
While pricing is the critical aspect in developing countries, European end-users are more willing to pay a 'green premium' to offset their carbon emissions by using upcycled battery storage and renewable energy. Moreover, these applications require more energy and power, as well as the possibility of monitoring of the assets which is offered by betteries' proprietary cloud platform. To create a successful business model, several other key aspects need to be in place: the right partners, resources, and activities. Securing a steady feedstock of used EV batteries is essential for each repurposer. To that end, betteries now has an ongoing partnership with Renault.
Other feedstock sources could include mobility fleet operators (e-trucks, e-buses), repair shops, recyclers, or energy companies that use first-life batteries for stationary storage. Processing used EV batteries requires specific know-how, which is why repurposers rely on skilled workers, battery usage data, and ongoing development of proprietary technologies. Combining these resources, betteries can do precise and remote State-of-Health estimation, efficient sorting & dismantling, and modular design & assembly of battery systems. As expected, the main cost of running this business lies in the costs of goods sold (COGS), as well as the human resources and development costs of their technologies. Below you can find the business model Canvas of betteries laid out.
Current challenges in repurposing processes
As repurposing and overall circularity of EV batteries is still a nascent industry, several hurdles exist in the business model and operations of repurposers: assessment of the Remaining Useful Life (RUL), data sharing with 3rd parties, and product warranty. When repurposing a battery, it is key to understand the State of Health and subsequent RUL to plan its second life. Current assessment methods are long and do not allow defining the SOH of each module, which leads to false positive/negative assessments and non-homogenous performance of the resulting 2nd life products.
Acquiring data from both the 1st and 2nd life of the battery can be a challenge for repurposers. Here it is important to find the right partnerships with 1st-life battery operators (automotive OEMs) and to collect usage data from proprietary energy storage products. The data-sharing requirements of the New Battery Regulation can create a level playing field for repurposers entering the market, although data-sharing platforms and methods are still under development. Having in-depth insight into batteries’ SoH and RUL will allow for more product assurances, meaning insurance risk premiums could go down and battery warranty time could go up. To illustrate: most small and mobile energy storage units come with two years of warranty (the legal minimum). In comparison, betteries systems have a projected seven to ten years of productive 2nd life, using operational strategies enabled by Machine Learning / AI-based battery analytics.
New horizons: what is betteries working on now?
As the company is growing and continuously investing in R&D, its value offerings are improving and expanding to serve a more extensive variety of players in the energy transition. For betteries, interesting avenues to explore include battery leasing models and standalone battery SoH diagnostics for fleet operators. The evolution of business and operational models also comes from embracing the impact-driven mindset: developing solutions for where they are most needed, especially in remote or off-grid environments.
In July 2023, betteries delivered its largest sustainable power system shipment ever to aid Ukraine. More than 100 energy storage units have been distributed to schools, hospitals, and kindergartens in areas affected by Russia's war on Ukraine. The effort is aimed at swiftly establishing decentralised power sources, particularly in rural and smaller areas. By November 2022, attacks on Ukraine's energy infrastructure had left millions deprived of essential services. betteries responded by delivering energy systems to places like Netishyn Hospital, providing reliable power to crucial units and preventing reliance on limited-capacity and polluting diesel generators.
This case study was elaborated as part of the BatteReverse project by Bax & Company with input from betteries. The article is part of the Circular Business Cases series, which analyses existing business models for Li-ion batteries.
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