California is experiencing a surge in renewable energy generation from the sun and wind. But the state will face long-term economic and environmental challenges relying on these intermittent resources without deploying more energy storage.

Used electric vehicle batteries could be a critical – and inexpensive – part of the solution. Electric vehicle batteries that no longer have convenient range in the vehicles can still be repurposed and stacked to provide inexpensive energy storage to help decarbonize the electricity sector. However, regulatory hurdles and lack of definitive data on the revenue opportunities hinder the development of this market. This paper recommends more public sector support for new second-life battery demonstration projects, regulatory reform for rules that inadvertently prevent investment in this potential market, clearer liability to determine who pays in the event of damages from second-life battery usage, and more data sharing on electric vehicle battery life both in the vehicle and in grid applications.

Reuse and Repower is the thirteenth paper of the California Climate Change and Business Research Initiative, a joint project with UC Berkeley School of Law that is sponsored by Bank of America.

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