Battery Solutions Enters LFP Battery Reuse Business, Targets ESS Market

Kips Biopharma (Kips Pharma) subsidiary Battery Solutions is entering the business of reusing secondary batteries, including lithium iron phosphate (LFP) batteries, in energy storage systems (ESS). The company will expand its business by using end-of-life batteries secured through its existing recycling business to remanufacture and sell complete ESS products.

Battery Solutions said on October 14 that it would add a reuse business, which prepares batteries for reuse and sells them, to its existing recycling business, which recovers battery materials through processes such as shredding and extraction.

The company will initially focus on small-scale ESS and ESS for charging stations, where it can gain a price advantage over new ESS, and plans to target overseas markets, particularly Southeast Asia and India.

The global market for reused batteries is also expected to grow rapidly. According to a market research firm, recycling and reuse accounted for 75% and 25%, respectively, of the ways secondary batteries were processed in 2022. By 2028, reuse is expected to overtake recycling. The balance is projected to reverse by 2030, when reuse is expected to account for 55% and recycling for 45%.

The market is also expected to expand in value. The global reused battery market is projected to grow at an average annual rate of 25.5%, from $1.2 billion in 2024 to $4.7 billion in 2030.

Battery Solutions has already established a supply base for the end-of-life batteries needed for its reuse business. In January last year, it built South Korea's first commercial LFP battery pretreatment facility, with a processing capacity of 1 ton per hour, or 5,000 tons per year.

In March this year, the company also signed an annual-volume contract for recycling end-of-life batteries with the global company that ranks first in electric vehicle sales and has entered the Korean market. It is also participating in a national demonstration project for LFP battery recycling led by the Ministry of Environment.

The company said the additional investment burden for its reuse business would be limited, since it would select batteries suitable for reuse from among the end-of-life batteries secured through its existing recycling business.

Securing certification capabilities is expected to be a key challenge for the reuse business. Under current regulations, end-of-life batteries must pass a safety inspection for reused batteries under the Electrical Appliances Safety Control Act before they can be reused. Battery Solutions plans to secure the necessary capabilities through a partnership with or acquisition of a specialist company with expertise in battery performance certification and safety assessments.

The move into this business stems from the company's view that simply increasing recycling volumes has limitations when it comes to improving profitability. Its strategy is to go beyond the existing approach of shredding batteries to recover materials such as lithium and make use of the residual value of the batteries themselves.

Battery Solutions plans to dismantle recovered end-of-life batteries at the pack level, assess their state of health (SoH), and select those that meet certain standards for remanufacturing into ESS. The company said batteries that have been retired for reasons such as the replacement of simple components but still have good residual performance can generate greater added value if reused rather than immediately shredded.

The reuse business also differs in that it sells finished products rather than materials. The company said it can reduce both manufacturing costs and carbon emissions because the batteries do not have to go through the cell manufacturing process again.

The demand base for remanufactured ESS is also expanding. Growth in the ESS market is being driven by rising power demand as artificial intelligence (AI) data centers proliferate and by the wider adoption of renewable energy. The related market is also growing in South Korea, where long-term supply contracts worth more than KRW 3 trillion have recently been signed for battery packs for hybrid vehicles and ESS.

Battery Solutions plans to expand both vertically and horizontally into the reuse business, leveraging its secured supply of end-of-life batteries and the foundation of its existing recycling business.

"Reusing secondary batteries is an eco-friendly business that not only offers economic benefits but can also dramatically address the environmental pollution caused by landfilling," said Kim Minhong, CEO of Battery Solutions. "With the LFP battery market growing rapidly every year, we will continue to pursue vertical and horizontal expansion into the reuse business, building on the volumes secured through our battery recycling business."

This content was produced with the assistance of AI translation services.