Circular business models for electric vehicle lithium-ion batteries: An analysis of current practices of vehicle manufacturers and policies in the EU

Abstract

Abstract With the burgeoning transition towards electrified vehicle fleets, lithium-ion batteries (LIBs) have come into focus for different stakeholders due to high costs, supply risks, production-related resource and energy demands and environmental concerns. Circular business models (CBMs) and Circular Economy (CE) strategies to slow and close resource loops are discussed as potential solutions. With a focus on circular business model elements and influencing factors, this research reviews literature on CE strategies for LIBs and benchmarks their current adoption amongst European vehicle manufacturers. These were identified by analysing companies’ websites and interviewing representatives from six companies. In addition, observation of a single manufacturer revealed further context-specific and internal factors. Finally, it reviews the external policy drivers and barriers for CE strategies for LIBs and discusses how policy can be further developed. The results demonstrate that many manufacturers are pursuing CE strategies, mostly focussed on repair, refurbishing, and repurposing. Variation in the operationalisation appears to be linked to the degree of manufacturer involvement, indicating that CBMs are context-specific and dependant on internal factors. All CBMs were found to require close collaboration between different stakeholders to build trust and reduce uncertainties. The necessity to design for disassembly and to build expertise to thoroughly diagnose the state of health of LIBs to enable life extending CBMs was highlighted. While the late 2020 proposal for new EU legislation for batteries contains ambitious new requirements that will incentivise CE strategies, there is still a need to consider further policy development to ensure adherence to the waste hierarchy.