China and the EU are currently leading the way for second-life (2L) electric vehicle (EV) battery application, pushing stronger policy holding manufacturers accountable for EV battery end-of-life, propelling circular battery economies. Conversely, weak policy in the US encourages companies to withhold state of health data and access to battery management systems amidst proprietary concerns. IDTechEx’s Second-life Electric vehicle Batteries report provides deeper analysis of these policy-driven regional differences. However, a collaboration between AI infrastructure company Crusoe and battery recycler and repurposer Redwood hints at shifting tides, and a potential new global frontrunner emerging.
Diverging Policies Shape the Emerging Global Market for Second‑Life EV Batteries
Electric vehicle (EV) batteries gradually lose capacity as they age, influenced by factors such as repeated charging cycles, calendar ageing, and temperature stresses. Once EV battery packs reach 70-80% of its initial capacity (typically after 11-13 years) it can no longer meet performance requirements for road use; showing reduced milage and peak power affecting acceleration and overall safety. With 1 in 4 new cars sold in 2025 being EVs it raises the critical question of how best to utilize these otherwise stable, reliable, and high-capacity batteries at end-of-life.
China has recently been paving the way in the second-life (2L) EV battery market introducing policies that strengthen traceability, enforce extended producer responsibility (EPR), and prioritize sustainability, advancement, and safety. Under these regulations at least 60% of all EV battery waste must be diverted into 2L (or cascade) applications rather than being immediately dismantled or smelted.
Despite the EU establishing clear frameworks for battery disassembly, inspection, and repair its policies lack incentives or quotas to accelerate large-scale EV battery repurposing. Nonetheless the region demonstrates significant momentum with ~20 active EV battery repurposers, translating to substantial capacity to process the increasing number of retired EV batteries and support future commercial 2L projects.
In the United States, 2L EV battery implementation remains far more limited than in China and the EU due to a combination of supply, market and regulatory challenges. Strict and costly Underwriter Laboratories (UL) certification requirements, a limited supply of retired EV batteries and a small number of repurposers continue to bottleneck the market. This is compounded by the absence of clear federal guidance, particularly around whether 2L systems qualify for Inflation Reduction Act incentives, adding further uncertainty for investors and developers.
American Firms Drive Largest Global 2L Battery Deployment to Date
Despite the challenges facing US-based second-life EV battery companies, Redwood and Crusoe have rapidly reshaped the market by deploying the world’s largest second-life electric vehicle battery deployment, a solar powered 12MW/63MWh microgrid in Nevada, and on 24th March 2026 the partners announced a major expansion that will increase their total computing capacity by sevenfold and boost energy storage to 20MW/205MWh.
The project has demonstrated exceptional performance, achieving 99.2% uptime. IDTechEx’s report,” Sustainability for Data Centers 2025-2035: Green Technologies, Market Forecasts, and Players” delivers further market intelligence on sustainable data centers and solutions for reducing scope 2 and scope 3 CO₂ emissions.
This raises a broader question: can battery repurposing not only enhance the sustainability of EVs, but also provide a fast, efficient solution to growing energy demands driven by rising EV adoption, expanding heat‑pump installations, and the rapid growth of AI data centers? IDTechEx’s report, "Second-life Electric Vehicle Batteries 2025-2035: Markets, Forecasts, Players, and Technologies", evaluates battery refurbishment and repurposing technologies, highlighting key players and market outlooks for second-life EV battery deployment opportunities.
