As lithium-ion battery pack costs drop to the USD 100 per kWh threshold, new EVs are becoming more affordable. And this is likely to be reflected in the prices of used EVs, helping to make the shift towards net-zero transport accessible for more motorists. However, when it comes to the second-hand EV market, consumer confidence needs to be built, particularly about the battery state of health. This will expand EV ownership to a vast majority of people who are held back by the high upfront cost of electric vehicles.

Battery state of health

The range of an EV is an important consideration as batteries can lose 5% to 10% of their capacity in the first five years and continue to degrade due to a variety of factors, including age, exposure to extreme temperature, and use of fast charging. The battery state of health, which is the ratio of the total maximum capacity in kWh at any given time, over the beginning of life or rated capacity, is reflective of everything the battery has gone through in the normal course of powering an EV.

The battery state of health is a specific concern for the used EV market

Especially because the battery is the single largest cost component in an EV. If battery degradation is excessive there might be a need to repair or replace the battery, which can be expensive and a major hurdle for a used car consumer. In this context, access to EV battery data is important, as without diagnostic data about its health the battery is like a black box. The used electric vehicles market cannot function without availability of accurate data on battery health because buyers need to have confidence that they are buying a vehicle with a well-functioning and sound battery.

Standards can help

As more used EVs start to come onto the market, standards can help in understanding whether an EV is suitable for the secondary market, or if its battery can be put to second life use in stationary storage or simply recycled. EVs come with unique battery packs and work is underway to develop a Battery State of Health Standard which will address this need.

Long life boost

The development of single crystal NMC cathode combined with other technological advancements, means that a long life boost to EV batteries is possible which will alleviate concerns in the secondary EV markets. The so-called ‘million mile battery’ will also bring longevity to vehicle-to-grid applications.

Encouraged by the used EV tax credits such as those provided under the Inflation Reduction Act, pre-owned electric cars can play an important role in transition towards decarbonization. Greater affordability will serve the needs of consumers who would like to go the electric way, but are currently prohibited by the high upfront cost of a new electric vehicle. Declining battery costs will help new EVs become more affordable, and as consumers gain confidence in the electric powertrain, it is likely in turn to ease the switch towards new EVs.