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Nissan and Sumitomo Plan New Life for Old EV Batteries

By KBB.com Editors on October 20, 2009 4:47 PM
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Nissan Motors and the Sumitomo Corporation have joined forces to undertake a feasibility study for an innovative and forward-thinking business venture aimed at capitalizing on tomorrow's potential market in used battery packs from electric vehicles. This "4R" plan -- for Reuse, Resell, Refabricate and Recycle -- will focus on developing new -- and profitable -- ways to both protect the environment and create new energy-storage solutions for Lithium-ion (Li-ion) batteries that have come to the end of their initial service life in cars. While the current state of the EV business has yet to generate much in the way of "feedstock," the firms feel that by 2020, the demand for "second-life" batteries in Japan alone will be the equivalent of 50,000 EVs per year at minimum. The two firms expect to have this joint venture operational by late 201 in Japan and the United States. In Europe, Nissan plans to explore this 4R business model with its Alliance partner, Renault.

While all four cornerstones of the 4R business model offer unique tangible benefits, the most attractive appears to be straightforward reuse. Today's Li-ion cells do lose their ability to gain/maintain full charge capability over time, but generally retain about 80 percent of their as-new power capacity. This makes them ideal candidates to serve as ready-made storage devices for things like solar panels, uninterruptable power supplies and load-leveling links in both solar and wind-generated power grids.

Nissan is particularly well positioned to take advantage of the potential inherent in the 4R business deal. It already has formed the Automotive Energy Supply Corporation (AESC) with NEC Corporation to mass produce high-performance Lithium-ion batteries and would now be able to exercise much stronger control over the entire value chain of the battery, which is the most expensive component in all-electric, zero-emission cars. Hideaki Watanabe, head of Nissan's Zero Emission Business Unit, sees this as a critical factor in helping protect the firm's future EV customers from having to bear the entire cost of this pivotal element. "Nissan is exploring several options including battery lease or credit model based on a monthly payment scheme. With this proposition, the total running cost, which equals the monthly battery payment plus the cost to charge the battery, is comparable to the cost to refuel a similar gasoline-powered car. Ultimately, this is a compelling economic proposition for a zero-emission car that meets all your driving needs."

This week in Tokyo, Nissan's CEO Carlos Ghosn told a gathering at the Foreign Correspondents Club that his firm is also at work developing a next-generation EV battery. Still a few years off, it promises to be even smaller, lighter and less expensive to produce than the Li-ion pack that will be used in Nissan's new LEAF EV model.

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