It makes more sense from an economic standpoint to recycle old plug-in electric vehicle batteries than to reuse them directly for home energy storage, according to a new report from Lux Research.

The primary reason? According to Lux Research, reused plug-in electric vehicle batteries will “deliver questionable returns on account of reduced performance, limiting them to application with less frequent and shallower depth of discharge cycles.”

This echoes what Tesla CTO JB Straubel said earlier this year. Tesla has said repeatedly that it plans to recycle almost 100% of the materials in its batteries at its Gigafactory. When asked about simply reusing batteries instead of recycling them, though, JB Straubel indicated that Tesla continuously finds that this doesn’t work out as a cost-competitive approach.


As an example, an 11.2 kilowatt-hour (kWh) home energy storage system composed of second-life electric vehicle batteries will cost around $4,600 (according to Lux Research) and a 7 kWh system composed of new batteries will cost around $6,000, but with round-trip efficiency and cycle life factored in, this will make systems composed of new batteries the better option, according to the market research firm.

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