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21 June 2019

Nissan Leaf battery performance imperils second-hand grid plans

Nissan seems to be reading its tea-leaves wrong, this week saying that because its battery packs in its Leaf electric vehicle (EV) are so good, it is going to have to recover and then re-use the packs in energy storage applications. However, most early discussions of this topic relied on the cars outlasting the batteries, so that the old packs could be freed up sooner. If Nissan is right, and Volkswagen has recently said much the same thing, then these second-hand applications are going to, initially at least, see a significant shortage of packs to use, which will almost certainly see alternative battery technologies like Vanadium Flow, take the lion’s share of grid scale batteries, due to EVs eating all the Lithium Ion production at first.

This is a very complex balancing act, and one that is most influenced by the overall sales performance of EVs, and so it’s too early to draw solid conclusions. Early concepts included pulling the decayed battery packs out of cars and using them in home energy management systems, or for grid-scale storage applications – after the mobility requirements for battery capacity were failed by the used battery, it could be put to use in a static application.

So, if your startup investment pitch was banking on an EV spitting out a usable battery pack every 7 years, to hear that one of the most popular EVs is finding that it doesn’t ever need to replace the pack could be a disaster. Sure, it wasn’t like collecting these packs from dealerships and workshops was going to be a cakewalk in the first place, but at least the raw material for your fancy new energy system was going to be available. If Nissan’s claims are true, that’s going to throw spanners into the works of many startups out there.

Of course, skyrocketing sales of EVs might offset that. Enough crashed EVs could supply what is needed for these startup plans, but if the packs outlast the cars, then this particular crop of startups is likely going to enter a drought – waiting until EVs start dying off in sufficient volumes.

For Nissan this could be good news, as it might see such startups die off and present an easier path to diversifying into energy services. The automotive industry is not in a good place right now, and the number of future-looking energy-themed investment strategies is not a coincidence.

Many automakers have seen the writing on the wall – that cheaper EV designs are going to slash the already slim margins on their internal-combustion engine portfolios, and that the supporting supply chain of OEMs and service centers is going to fall apart due to the comparatively simpler designs and fewer moving parts.

This is the reasoning behind Ford’s move to selling just trucks and Mustangs, and why it was so keen on mobility-focused startups and business models. Other automaker rivals are exploring ridesharing and mobility, but the other major camp that the automakers seem interested in diversifying into is energy services.

This is the impetus behind Nissan Energy Solar Solutions, which has a HEMS offering that combines battery storage with rooftop solar panels, and packages it up in a pretty familiar model. Nissan and Sumitomo are experimenting with using degraded battery packs for street lights, and the grid-connected vehicle charging method that is being pursued by the likes of eMotorWerks (Enel) is one that the automakers should start partnering in, pretty swiftly. Bundling a number of these battery packs together would let Nissan provide grid-scale services itself, or through a business partner.

The packs themselves are covered by Nissan’s warranty, for 8 years or 100,000 miles. Nissan says that the Leaf packs will be able to hold 70% of their original charge after 10 years of use, and its R&D wing reckons it could still get 40% usable capacity after 20.

The balance that needs to be struck here is whether recycling the battery materials themselves might be a more efficient approach, or if trying to wring as much life as possible out of them is the better option. Volkswagen says it can get 70% of the original battery capacity after 8 years or 100,000 miles. Daisy-chaining a bunch of left-over withered batteries together will be an engineering challenge, but as long as they are still being used, they should prevent new sources of carbon to be emitted during the manufacturing of their replacement.