Reuse vehicle batteries in second-life energy storage
Ford Otosan
SKD TürkiyeSummary
Repurposing end-of-life and scrap vehicle batteries into scalable storage that supports grid resilience, load shifting, vehicle charging and a circular value chain.
Context
Submitted through the COP31 Sustainable Transformation Awards · SKD Türkiye (WBCSD Global Network Partner)
The company is an automotive manufacturer with over 25,000 employees as of year-end 2025, operating passenger, light, medium and heavy commercial vehicles with a production capacity of 934,500 units in Türkiye and Romania and has a net zero emission target for 2050 verified by SBTi.
The rapid acceleration of electrification generates a complex new material stream. Scrap but usable battery modules from production and an increasing influx of end-of-life vehicle batteries risk being prematurely directed to energy-intensive recycling or disposal. This linear practice discards substantial residual value. A module that no longer meets the stringent operating requirements of an electric vehicle can still operate efficiently in stationary applications.
The project has been initiated in 2022 as a part of the company's ReCube sustainable design framework, which transforms the approach from end-of-life waste management to a life cycle framework. By establishing a safe, monitorable and commercially viable second-life energy storage route, the project anticipates the stringent requirements of the EU Battery Regulation, turning a compliance obligation (traceability, recovery and extended producer responsibility) into a strategic asset.
Location of the initiative: Gölcük, Kocaeli province, Türkiye
Solution
Known internally as FOUS, the system converts usable scrap battery modules into a stationary energy storage unit through a defined validation and integration sequence rather than through direct reuse. Modules pass state-of-health and safety gateways first. Validated modules are then assembled into a storage unit governed by a battery management system, with fire suppression and IoT remote monitoring built in, so that the unit meets the safety standards required in an industrial environment.
The first pilot unit was commissioned with 18 battery modules, a nominal capacity of 142.2 kWh and a usable capacity of 113.8 kWh. A second version was developed in 2026 to the same technical specification, with a more compact design, upgraded fire suppression infrastructure and IoT-based remote monitoring.
FOUS is designed for multi-duty use, combining several operating strategies in a single asset. It performs energy arbitrage, charging during off-peak low-tariff hours and discharging at peak demand to reduce cost. It acts as an infrastructure enabler, supporting electric vehicle charging locally without triggering costly grid upgrades. Its design also allows integration with renewable generation such as solar and wind.
Designed based on the principle of modularity, FOUS is positioned as a scalable B2B solution that ranges from on-site energy optimisation to load balancing in weak grid infrastructures.
Figure 1: FOUS_V1 commissioned at the Gölcük plant in 2024 and FOUS_V2 in 2026
Impact
Sustainability impact
Climate
The climate effect works on two levels. Giving the battery a second life avoids the emissions embodied in manufacturing a new storage unit, which the company puts at a potential reduction of up to 50 per cent per unit, based on published comparative life cycle assessment literature (DOI 10.1016/j.isci.2023.107195) rather than on a site-specific measurement. Operationally, in Scope 2, the system supports smart grid management and increases the share of renewable electricity used on site.
The project remains at prototype and validation stage. The 2025 Sustainability Report confirms an operating prototype at Gölcük and continued technical optimisation; no site-wide emissions reduction is reported.
Nature
FOUS moves the business model from waste treatment to waste prevention. Extending the economic life of the batteries delays the chemical- and energy-intensive recycling process and reduces demand for the critical raw materials that new stationary storage units require. Modules that would have entered disposal or recycling are returned to the value chain in a functional state.
Social
Energy storage solutions enable the installation of charging systems even in locations with infrastructure and capacity issues, thereby increasing the widespread availability of electric vehicle charging systems. By eliminating the need for costly transformer upgrades in grids with insufficient power capacity, this system facilitates the wider adoption of electric vehicles. Furthermore, prioritising fire suppression and IoT monitoring systems ensures workplace safety, while operational units provide a real-world testing environment that is vital for academic research on battery ageing and thermal dynamics.
Business impact
Benefits
While this project is now of great value in shaping the battery management system strategy, it is also developing a new approach that will contribute to the circular economy and add commercial value to a product currently classified as waste.
The model opens a broader commercial opportunity. It converts battery waste from a disposal liability into a deployable energy asset, creates a lower-cost route for charging and renewable-energy infrastructure, and positions second-life storage as a scalable business-to-business solution for customers facing weak grid connections, transformer investment constraints and growing demand for flexible energy capacity.
Demand was tested rather than assumed: 27 structured interviews with electric vehicle charging operators, industrial manufacturers and renewable energy providers confirmed the market and identified weak grid infrastructure and transformer investment cost as the conditions in which the system is most valuable.
Operationally, a single fully charged 142.2 kWh unit can cover the daily alternating current charging need of seven vehicles, or three 20 to 80 per cent direct current fast charges, without straining the local grid.
Costs
The project turns a disposal liability into a revenue-generating asset. The second-life system carries a unit cost advantage of approximately 30 per cent against a comparable prime-battery system: an equivalent new energy storage system costs about USD 340 per kWh, while the second-life system can come down to about USD 240 per kWh, based on quotations received and calculations made in March 2026. The unit also earns from tariff differentials, storing energy during low-price hours and using it for vehicle charging during high-price hours.
The cost base is research and development effort, safety validation and the integrated technology layer of IoT and battery management, all of which are necessary before a second-life unit can operate on an industrial site.
The principal barrier to scaling is the standardisation of incoming second-life modules, since units can only be produced repeatably if the modules arriving are consistent. This is addressed through modular architecture, partnerships and continuous field-data feedback.
The 30 per cent cost advantage should be read as a unit cost comparison rather than a full cost of ownership. The residual life of second-life modules and the replacement cycle that follows will decide whether the advantage holds across the service life of the asset.
Impact beyond sustainability and business
Co-benefits
The model creates a route to compliance with the European Union Battery Regulation on life cycle management, traceability, recovery and producer responsibility, which turns a regulatory obligation into an asset class.
The unit lowers the barrier to entry for renewable energy investors and charging point operators.
It generates critical field evidence for future policymaking and for research and development work on second-life batteries.
Potential side-effects
Managing supply chain variability, in the volume and specification of end-of-life batteries and navigating the changing landscape of industrial insurance and compliance for second-life assets are the main constraints. The financial model also has to remain competitive against the continuously declining price of prime batteries.
Implementation
Typical business profile
The model suits automotive manufacturers, battery producers and industrial facilities that face significant electricity tariff differentials. It is equally relevant to renewable energy operators seeking cost-effective storage to balance intermittent generation. The critical factor is the supply chain for production scrap and end-of-life batteries: their collection, the assessment of whether they are suitable for repurposing, and the incoming quality test protocol. Delivery requires research and development, product development, battery systems, sustainability, energy management, plant production and maintenance, and business development teams working as one project structure, with access to safety validation and testing capability.
Approach
Recover value at source: Intercept usable modules from production or end-of-life streams before they enter the recycling phase.
Make validation a standing gateway: Treat state-of-health and safety testing as an ongoing operational requirement rather than a one-off entry gate.
Design around safety, not capacity: Build the unit around the battery management system, fire suppression and IoT monitoring; capacity comes second to industrial safety.
Pilot inside your own operations: Deploy the first unit internally to capture authentic duty-cycle data.
Define the duty stack: Set a multi-functional role covering arbitrage, charging support and renewable integration, and size the asset against the combination.
Iterate from field data: Channel field-test results and remote monitoring output directly into the next version.
Benchmark transparently: State the per-kWh cost advantage against new batteries so the commercial case can be argued with customers.
Engage the ecosystem early: Validate demand with charging operators, industrial off-takers and grid managers before industrialising.
Stakeholders involved
Project leads: FOUS is a research and circular economy initiative sponsored by senior management under the company's 2050 carbon neutrality goal and its ReCube sustainable design approach. Social and environmental sustainability risks, regulatory compliance and the monitoring of actions taken sit with the Early Risk Detection and Management Committee at Board level. Product Development Leadership is responsible for developing sustainable solutions across the product life cycle, for resource allocation and for the measures needed to meet targets.
Company functions: A single task force covering research and development, sustainability, energy management, plant production and business development.
Main providers: Collaboration with domestic battery system manufacturers covers integration and testing of the storage units.
Other: Collaboration with academic institutions covers thermal and ageing research, for which the operating units provide the test environment.
Key parameters to consider
Performance and impact are actively monitored through a consolidated set of operational, economic and market indicators. At the current validation stage, the operating prototype (18 modules, 142.2 kWh nominal and 113.8 kWh usable capacity) demonstrates an approximate 30 per cent unit cost advantage over prime battery systems, alongside a literature-backed carbon reduction potential. Continuous real-time data from field acceptance tests, the battery management system and IoT monitoring directly inform ongoing safety, design and operational optimisations. Moving forward, the initiative aims to use these validated field insights to evaluate broader ecosystem partnerships and scalable deployment opportunities across the energy and electric vehicle charging landscape.
Implementation and operations tips
Treat the safety case as the product, not as a constraint on it. Validation, the battery management system, fire suppression and IoT monitoring are what turn a reusable module into a saleable storage system.
Express capacity in customer terms. Stating that one unit covers the daily charge of seven vehicles on an alternating current connection communicates the value better than the kilowatt-hour figure alone.
Position the system as an infrastructure enabler. Market work showed the strongest case is avoiding transformer investment on weak grid connections, not storage in the abstract.
Build the first unit inside your own operations. Integrating with the plant network and charging infrastructure produced operating data that a standalone demonstration would not have generated.
Be precise about what is measured and what is modelled. The cost advantage comes from a unit cost comparison; the CO2 reduction is a literature-based potential. Presenting them at the same level of confidence would undermine both.