Used Electric Vehicle Battery Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Vehicle Type (Two-Wheeler, Passenger Car, Commercial Vehicle), By Type (Lead Acid, Lithium-Ion), By Application (Energy Storage, Electric Vehicle Charging, Base Station, Low-Speed EV, Others), and By Region 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 1.31 Billion
CAGR (2026-2031)	27.81%
Fastest Growing Segment	Two-Wheeler
Largest Market	North America
Market Size (2031)	USD 5.71 Billion

Market Overview

The Global Used Electric Vehicle Battery Market will grow from USD 1.31 Billion in 2025 to USD 5.71 Billion by 2031 at a 27.81% CAGR. The Global Used Electric Vehicle Battery Market consists of retired lithium-ion automotive batteries repurposed for second-life energy storage or processed to recover raw materials. Growth is fundamentally driven by stringent environmental regulations mandating circular economy practices and the urgent industrial necessity to secure independent supply chains for critical minerals. According to the Global Battery Alliance, in 2025, pilot programs for battery passports covered over 80% of the global electric vehicle battery market, establishing the essential traceability infrastructure needed to validate and manage these assets throughout their lifecycle.

However, a significant challenge impeding expansion is the lack of standardized diagnostic protocols for assessing the residual health of retired units. The absence of universally accepted testing methodologies creates technical uncertainty and safety risks which complicates the efficient sorting of batteries for reuse or recycling. This fragmentation restricts the scalable commercialization of second-life solutions and creates bottlenecks in the broader reverse supply chain.

Key Market Drivers

The strategic necessity to secure critical raw material supply chains is the primary catalyst propelling the Global Used Electric Vehicle Battery Market, as nations and corporations strive to mitigate reliance on volatile foreign mining operations. By treating retired units as urban mines, stakeholders can recover valuable metals like lithium, cobalt, and nickel with increasing efficiency, thereby stabilizing production costs for new energy storage solutions while insulating manufacturers from geopolitical supply shocks. This capability was highlighted when CATL subsidiary Brunp Recycling revealed in October 2025 that it had achieved a recovery rate of 99.6% for nickel, cobalt, and manganese from waste power batteries, demonstrating the high-yield viability of modern closed-loop ecosystems.

Concurrently, the surging global volume of retired electric vehicle batteries is forcing a rapid industrial expansion to manage this hazardous yet valuable feedstock. As early-generation EV fleets reach their end-of-life, the influx of spent packs is scaling recycling operations from pilot phases to commercial mass production, turning waste management into a profitable material sourcing strategy. According to Redwood Materials, January 2026, the company recycled 20 GWh of lithium-ion batteries in 2024 alone, effectively validating the operational readiness of large-scale domestic recycling infrastructure. To further support this sectoral growth and secure domestic supply lines, the US Department of Energy, in August 2025, announced a funding initiative of $1 billion specifically targeting the expansion of critical minerals production and battery recycling capabilities.

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Key Market Challenges

The lack of standardized diagnostic protocols for assessing the residual health of retired units constitutes a formidable barrier to the Global Used Electric Vehicle Battery Market. Currently, the absence of a universally accepted testing framework compels operators to rely on fragmented, proprietary evaluation methodologies that are often manual and inconsistent. This variability generates significant technical uncertainty regarding the safety, remaining capacity, and chemical stability of battery packs, making it difficult for stakeholders to accurately value assets or certify them for second-life applications. Without a reliable, uniform standard, facilities cannot implement the automated, high-throughput grading systems essential for economic viability, thereby stalling the transition from pilot projects to industrial-scale operations.

These inefficiencies create a severe bottleneck in the reverse supply chain, directly impeding the market’s ability to absorb increasing volumes of end-of-life units. The high operational costs associated with prolonged, inconsistent testing regimes erode the price competitiveness of used batteries compared to new ones, effectively restricting market liquidity. This creates a disconnect where supply exists but cannot be processed fast enough to meet demand. According to the International Energy Agency, in 2024, global demand for electric vehicle batteries surpassed 750 gigawatt-hours, a figure that underscores the critical magnitude of assets that will eventually necessitate streamlined, uniform health verification to avoid becoming stranded inventory.

Key Market Trends

The Integration of Second-Life Batteries into Stationary Energy Storage Systems is rapidly industrializing as a viable alternative to new storage manufacturing, driven by the need to support energy-intensive infrastructure like data centers and renewable microgrids. By repurposing retired electric vehicle packs, stakeholders are creating decentralized power reserves that mitigate grid strain while maximizing the utility of critical minerals before final recycling. This operational shift validates the technical feasibility of using residual lithium-ion capacity for high-demand commercial applications, moving beyond pilot phases into commercial deployment. According to PV Magazine, June 2025, Redwood Materials launched a dedicated division to operationalize these assets, unveiling a 63 megawatt-hour microgrid project designed to power high-performance computing infrastructure using exclusively repurposed battery modules.

Concurrently, the Expansion of Battery-as-a-Service (BaaS) and Leasing Models is transforming the economic landscape of the reverse supply chain by addressing the financial barriers of second-life adoption. To overcome the high upfront capital costs and technical risks associated with used assets, market players are introducing structured financial products that separate asset ownership from operational usage. This evolution allows for the aggregation of decentralized storage projects into investable portfolios, unlocking the institutional capital necessary for large-scale expansion. According to Sustainability Magazine, December 2025, B2U Storage Solutions exemplified this trend by launching a structured finance fund specifically designed to own and manage a portfolio of grid-connected second-life projects with a total expected capacity of 150 megawatt-hours.

Segmental Insights

Based on market analysis from trusted sources, the Two-Wheeler segment is currently positioning itself as the fastest-growing category within the Global Used Electric Vehicle Battery Market. This rapid expansion is primarily driven by the extensive adoption of electric scooters and motorcycles in emerging economies, particularly across Asia-Pacific, where cost sensitivity fuels a high demand for affordable, refurbished battery packs.

Furthermore, the segment’s growth is accelerated by the flourishing battery-swapping ecosystem, which relies heavily on the circulation and reuse of shared battery assets to lower upfront vehicle costs. Unlike passenger vehicles, two-wheelers exhibit shorter battery lifecycles, resulting in a higher turnover rate that stimulates a dynamic secondary market for battery refurbishment and recycling. Industry experts indicate that this unique combination of high-volume turnover and the necessity for cost-effective mobility solutions establishes the two-wheeler segment as a critical and rapidly expanding component of the circular battery economy.

Regional Insights

North America maintains a leading position in the global used electric vehicle battery market, driven by stringent environmental regulations and a mature automotive sector. The United States Department of Energy actively promotes policies that encourage battery recycling and second-life applications to secure critical material supply chains. Consequently, the region possesses a well-developed infrastructure for collecting and processing end-of-life batteries from a growing fleet of electric vehicles. This combination of strong regulatory support and established industrial capability ensures a consistent supply of feedstock, firmly establishing North America as the dominant hub for market expansion.

Recent Developments

• In June 2025, Redwood Materials and Crusoe unveiled a groundbreaking project featuring North America's largest microgrid powered by second-life electric vehicle batteries. Through its new energy division, Redwood Materials repurposed used battery packs, which retained significant capacity, into stationary energy storage systems rather than immediately recycling them. This deployment, located in Nevada, was designed to power Crusoe’s modular artificial intelligence data centers with renewable solar energy and stored power. The collaboration demonstrated a viable commercial application for retired vehicle batteries, extending their useful life and reducing the costs associated with power infrastructure for high-demand computing operations.
• In October 2024, Mercedes-Benz opened Europe's first battery recycling plant with an integrated mechanical-hydrometallurgical process in Kuppenheim, Germany. The facility represented a major milestone for the company as it became the first automotive manufacturer worldwide to close the battery recycling loop with its own in-house operations. The plant utilized an innovative process that achieved a recovery rate of more than 96% for valuable raw materials like lithium, nickel, and cobalt. These recovered materials were deemed suitable for use in the production of new battery modules for the company's future electric models, underscoring a commitment to resource conservation.
• In September 2024, BMW of North America and Redwood Materials established a strategic partnership to recycle lithium-ion batteries from electric, plug-in hybrid, and mild hybrid vehicles across the United States. The collaboration aimed to recover critical minerals such as nickel, cobalt, lithium, and copper from end-of-life batteries collected from the automaker's extensive network of nearly 700 locations. Redwood Materials committed to refining these recovered materials and returning them to the domestic battery supply chain. This initiative supported the creation of a closed-loop circular value chain, significantly reducing the environmental impact associated with battery production.
• In February 2024, Volkswagen Group UK expanded its long-standing collaboration with Ecobat to include the recycling of electric vehicle batteries. This agreement marked a significant step in the automotive group's efforts to promote a circular energy economy by ensuring the sustainable management of lithium-ion batteries throughout their lifecycle. Under the terms of the partnership, Ecobat agreed to collect high-voltage batteries from dealers, distributors, and recycling centers using specialized vehicles. These batteries were then processed at Ecobat’s newly established lithium-ion recycling facility in the United Kingdom, which served as the company’s third such plant globally.

Key Market Players

• Contemporary Amperex Technology Co., Limited (CATL)
• LG Energy Solution, Ltd.
• Panasonic Holdings Corporation
• Samsung SDI Co., Ltd.
• BYD Company Limited
• Tesla, Inc.
• Robert Bosch GmbH
• Umicore SA
• Li-Cycle Holdings Corp.
• Redwood Materials, Inc.

By Vehicle Type	By Type	By Application	By Region
Two-Wheeler Passenger Car Commercial Vehicle	Lead Acid Lithium-Ion	Energy Storage Electric Vehicle Charging Base Station Low-Speed EV Others	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Used Electric Vehicle Battery Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Used Electric Vehicle Battery Market, By Vehicle Type:

• Two-Wheeler
• Passenger Car
• Commercial Vehicle

• Used Electric Vehicle Battery Market, By Type:

• Lead Acid
• Lithium-Ion

• Used Electric Vehicle Battery Market, By Application:

• Energy Storage
• Electric Vehicle Charging
• Base Station
• Low-Speed EV
• Others

• Used Electric Vehicle Battery Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE