The electric vehicle (EV) transition was built on the premise of cleaner transportation, lower lifecycle emissions, and reduced oil dependence. But as EV adoption accelerates, it’s worth looking at the full battery life cycle, including what happens when batteries reach the end of their useful life and how they can be reused, recycled, or responsibly managed.
In the first half of 2026, global EV sales surpassed 23 million vehicles, bringing the world's total fleet of plug-in passenger and commercial vehicles to more than 116 million. That explosive growth has fueled unprecedented demand for critical minerals while creating a new challenge: how to manage the next life of the batteries already in circulation.
Second-life batteries now sit at the intersection of energy resilience, responsible sourcing, product safety, circular economy strategy, emergency preparedness, and human rights due diligence. For organizations building, buying, storing, transporting, financing, or relying on battery systems, the opportunity is significant, but so is the need for disciplined risk management. In June 2026, Vancouver-based Moment Energy officially opened Megafactory 1 in British Columbia, which the company describes as the world’s largest EV battery repurposing facility. The company says the facility is operational and is expected to produce 1 gigawatt-hour (GWh) of battery energy storage systems by 2030.
Instead of sending every retired battery directly to recycling, the operation evaluates and transforms suitable EV batteries into battery energy storage systems (BESSs). It is part of a broader second-life ecosystem. In Germany, RWE and Audi commissioned a 4.5 megawatt-hour (MWh) storage system using decommissioned Audi e-tron batteries. In Spain, Endesa announced a 4 MW/1.7 MWh pilot in Melilla using Nissan LEAF batteries. In California, B2U reports that its 32 MWh Lancaster project has operated since 2020, using more than 1,300 repurposed EV batteries to provide power and grid services in the CAISO market.
The emergence of a second-life battery economy is quickly becoming one of the most important sustainability, supply chain, and energy infrastructure stories of the next decade. This opportunity is expected to help address resource scarcity, reduce waste, ease pressure on critical mineral supply chains, and extend the useful life of materials that required significant environmental and human effort to extract in the first place.
But as this market expands, it also comes with a warning. Second-life battery usage brings new challenges around safety, traceability, product lifecycle management, and responsible stewardship of these items throughout their extended use.
“Second life should not mean postponing responsibility. The real circularity opportunity comes from matching a battery to an appropriate next use, documenting its condition and safety, and maintaining a clear path to eventual recycling.” – Ethan Redden, Circularity and Carbon Reduction Lead, BSI
Requirements vary by jurisdiction. The European Union (EU) Batteries Regulation is one concrete example: it establishes extended producer responsibility for batteries placed on a member state market, treats the first marketer of a repurposed battery as the producer for Extended Producer Responsibility (EPR) purposes, requires evidence such as state-of-health testing to show that a prepared waste battery is no longer waste, and introduces digital battery passports from February 18, 2027, for EV batteries and industrial batteries above 2 kilowatt-hours (kWh). A 2025 amendment delayed battery due-diligence obligations for in-scope economic operators to August 18, 2027. Outside the EU, organizations may face different product-safety, hazardous materials transport, waste, forced labor, and disclosure rules. This makes traceability and documented stewardship essential for managing compliance, reputational, and operational risk.
Millions of batteries are about to enter their second act
By 2035, more than 300 GWh of EV batteries, equivalent to roughly 4.6 million battery packs, are expected to retire from automotive use, creating one of the biggest circular economy opportunities of the next decade. Most of these batteries won't be “dead” when they exit the road as many will still retain 70% to 80% of their original energy capacity, leaving years of useful life on the table.
That remaining capacity comes at exactly the right time. As artificial intelligence (AI) infrastructure, electrification, renewable energy expansion, and grid modernization drive unprecedented demand for electricity, second-life batteries can help fill a critical gap. Repurposed battery systems can store renewable energy, improve grid reliability, provide backup power for hospitals and industrial facilities, support data centers, and strengthen community microgrids. In other words, batteries that can no longer power a vehicle may still play a vital role in powering the future.
The Circularity Gap Report 2026 estimates an annual global “value gap” of 25.4 trillion euros (EUR), plus or minus EUR 4.7 trillion, from inefficient material and energy use, food loss and waste, end-of-life waste, asset deterioration, and partially unpriced externalities. The report describes this as indicative potential rather than a guaranteed recoverable amount. For an individual retired EV battery, repurposing may preserve functional value when testing confirms that the battery remains suitable for a defined second use.
“Extending product lifecycles can strengthen resilience, reduce supply chain exposure, unlock new value streams, and support emerging regulatory expectations at the same time.” – Ethan Redden, Associate Consultant for Sustainability
Challenge behind the clean energy transition
EVs are central to global decarbonization efforts, but the batteries that power them remain one of the industry's biggest sustainability challenges. Producing EV batteries requires enormous quantities of critical minerals, including lithium, nickel, cobalt, manganese, and graphite. Extracting and processing these materials can involve a range of environmental considerations, including water use in water-stressed regions such as South America, as well as impacts related to habitat, greenhouse gas emissions, and mining waste.
But the challenge extends well beyond environmental impacts. Every EV battery depends on a complex global supply chain that spans mines, processing facilities, manufacturers, logistics providers, energy users, and end-of-life recovery networks. Many of the critical minerals used in batteries are sourced from regions where labor rights, worker safety, and environmental protections have faced persistent scrutiny. The Democratic Republic of the Congo, which has long supplied much of the world's cobalt, has been the focus of international concern over child labor, unsafe working conditions, and other human rights issues in parts of its mining sector. Similar scrutiny is growing around other minerals and processing locations, making traceability and due diligence necessary to the credibility of the EV transition.
“Traceability is what turns responsible sourcing into something organizations can verify. Those repurposing EV batteries need to understand not just who supplied the original material but where it came from, how it moved through the value chain, and whether the right controls were in place along the way.” – Tony Pelli, Practice Director, Security and Resilience
Governments, investors, non-governmental organizations (NGOs), customers, and manufacturers expect organizations to demonstrate that the materials entering their batteries are sourced ethically. As a result, responsible sourcing, supply chain transparency, traceability, worker protections, and human rights due diligence have become critical components of a sustainable EV battery strategy.
“The most sustainable battery is not simply the one with the lowest carbon footprint. It's the battery that delivers the maximum value from every material, every resource, and every hour of labor invested throughout its lifecycle. Extending battery life through repurposing creates both environmental and human rights benefits because it reduces demand for constant extraction while helping organizations get more value from existing resources.” – Ryan Lynch, Global Practice Director for Sustainability
Extending the lifespan of existing batteries offers an opportunity to reduce pressure on the extraction of new materials while maximizing the value of resources already in circulation.
Realizing the value of battery repurposing requires coordinated action across the multiple disciplines:
- Sustainability teams need credible lifecycle data.
- Supply chain teams need visibility into sourcing and recovery pathways.
- Environmental, health, and safety (EHS) teams need safe handling, storage, transportation, and emergency response plans.
- Operations leaders need confidence that repurposed systems will perform reliably.
- Procurement and legal teams need evidence that suppliers are managing labor, environmental, and product safety risks.
The strength of a second-life battery strategy will depend on how well these functions work together.
The safety question everyone is asking
As the second-life battery market expands, organizations must determine not only whether a battery can be repurposed but whether it can be repurposed safely. Lithium-ion battery fires are fundamentally different from traditional fires. They can experience a phenomenon known as thermal runaway, where damaged or compromised battery cells generate heat faster than it can dissipate. These incidents can be difficult to suppress, may reignite after appearing extinguished, and often require specialized emergency response procedures.
“A battery doesn't become low risk simply because it becomes sustainable. A single incident can have devastating operational, financial, and reputational consequences. As second-life battery systems scale, they must be approached with the same rigorous risk management discipline applied to any critical infrastructure asset.” – David Blacksberg, Senior Consultant specializing in emergency response and business resilience
Responsible battery lifecycle management requires testing, monitoring, transportation controls, storage protocols, performance verification, traceability, and emergency preparedness. Depending on the product, location, and use case, relevant US and Canadian frameworks may include UL 1974 for battery-repurposing processes, UL 1973 and UL 9540/9540A for stationary systems, National Fire Protection Association (NFPA) 855, and adopted fire and building codes as well as hazardous-materials transport rules such as 49 Code of Federal Regulations (CFR) 173.185. Key questions include:
- How will battery health and performance be verified?
- How will batteries be traced throughout their lifecycle?
- What standards will govern safety and quality?
- How will companies demonstrate environmental benefits and regulatory compliance?
- How will reverse logistics and recovery networks operate at scale?
Why this matters today
The opening of the world's largest EV battery repurposing facility is a sign that the conversation around sustainability is changing. For years, the focus was on building more batteries, deploying more electric vehicles, and accelerating the transition to a lower-carbon economy.
Now, attention is turning to a different challenge: how to get the most value from the resources we've already invested in while addressing environmental, economic, and humanitarian challenges at the same time.
Meet our experts
- David Blacksberg, Senior Consultant specializing in emergency response and business resilience
- Ryan Lynch, Global Practice Director for Sustainability
- Tony Pelli, Practice Director, Security and Resilience
- Ethan Redden, Associate Consultant for Sustainability specializing in product lifecycle management and extended producer responsibility
