East of San Antonio in Bexar County, 500 electric vehicle batteries at the end of their automotive lives will soon be repurposed to provide energy storage for Texas’s electric grid, a California company, B2U Storage Solutions, announced on August 29.

The batteries, housed in 21 cabinets the size of shipping containers, create a second life for the technology made from critical minerals, including lithium, nickel and cobalt, for another eight years, says Freeman Hall, co-founder and CEO.

Once the site is built and in operation later this year, the batteries will charge when there is an excess of renewable-energy production on the grid and the cost of power is cheap. The Texas facility will have a total capacity of 24 megawatt hours.

B2U Storage Solutions, based in Los Angeles, plans to deploy three more grid-storage projects in Texas throughout the next year, totalling 100 megawatt hours across the state, the company says. Assuming the average household uses 30 kilowatt hours per day, it’s enough energy to power 3,330 homes for a day, Hall says.

The site near San Antonio will interconnect to the CPS Energy distribution system, one of the nation’s largest city-owned utility companies. “We’re really helping to pioneer and demonstrate to the automotive industry that repurposing makes a lot of sense for a pretty healthy number of batteries before they’re truly ready for end of life and recycling,” Hall says in an interview.

An epiphany in novel energy storage

Hall and chief operating officer Michael Stern began building industrial-scale solar projects almost 20 years ago in the California cities of Palmdale, El Centro and Mojave, installing some 100 megawatts, or enough electricity to power more than 15,000 homes. But soon, as more solar began connecting to the grid, their bids to utilities were undermined by a developing  “duck curve” – industry shorthand for when higher penetration of renewables on the grid depresses energy prices during sunlit hours followed by a cost spike in the evening as there’s a loss of sun.

“That’s what inspired us to realize that we needed to add storage to our projects,” Hall says. “Along the way, we had an epiphany.”

RELATED

How subsidized leasing can drive EV adoption

Who’s trying to kill the $17,000 electric car?

Lack of charging stations in high-rise buildings is cutting off access to EVs

In looking for battery storage options for their solar projects, the two developers realized that the first wave of commercial EV batteries were beginning to wrap up their roughly 10-year automotive life. Aware of research that these batteries’ state-of-health, measuring the difference between a new battery and a used one, circled up to 80%, Hall and Stern hypothesized that they could build technology to use the battery packs as they came from the vehicle, avoiding any repurposing costs.

So the two solar developers purchased 300 Nissan Leaf batteries. The carmaker had run into a powertrain warranty issue with the world’s first mass-market EV, as the range they promised in the lease with the customer fell short. To fix the warranty and guarantee, Nissan swapped out the battery packs and found themselves with thousands of batteries that were still useful, Hall says, just not for driving. The batteries still had thousands of cycles left in a less-demanding scenario, like stationary storage for renewable energy.

That’s when the solar developers initiated the EV-pack storage technology fundamental to B2U, which currently operates three facilities using retired batteries from electric vehicles like Teslas, the Honda Clarity and the Nissan Leaf in California.

B2U’s technology allows the company to buy the retired EV battery packs without having to modify them, creating large-scale storage projects for less than if they were installing new batteries.

A coming wave of available energy storage

The global electric car fleet reached almost 58 million by the end of 2024, or about 4%  of all cars on the road, according to an International Energy Agency 2025 EV report. It’s more than triple the amount of electric cars in 2021.

The batteries in electric vehicles are typically replaced once they reach around 70 to 80% of their capacity as their range begins to diminish. As more EV batteries retire throughout the coming decade, the second-life EV battery market is forecasted to grow into a US$4.2 billion industry by 2035, according to a December report by IDTechEx, a technology market research firm.

You haven’t heard about it much to date. But you will be hearing a lot more about it going forward.

 – Freeman Hall, co-founder and CEO, B2U Storage Solutions

As the burgeoning industry in the United States advances, second-life battery reuse will become less expensive to operate, the report says, as new technology develops and speeds up the process. For instance, quality assurance currently can take hours to complete, but the report suggests that soon technology will pare the process down to minutes. These cost savings will be especially important as loans and incentives from the Inflation Reduction Act that supported a growing domestic recycling industry expire.

The opportunities within Texas’s competitive, wholesale grid market are what led Hall and his company to consider operating outside of their California headquarters, Hall says.

As a storage power generator, B2U is able to sell power after cheaply charging it and provide ancillary services to the grid, or get paid by the grid operators to help curb frequency deviations and imbalances.

Batteries have made significant capacity contributions within Texas’s electric grid in recent years and have been credited with helping prevent summer blackouts by bolstering grid reliability. Nearly 4,000 of the 9,600 megawatts of capacity added to the grid since last summer came from energy storage, according to the Electric Reliability Council of Texas (ERCOT).

The latest interconnection report shows that more than 700 stand-alone battery-storage projects and more than 300 battery-plus-solar projects are in line to connect to ERCOT.

Last year, another California-based company, Element Energy, began storing electricity using 900 second-life EV batteries within ERCOT. The West Texas site totals 53 megawatt hours of storage capacity, making it one of the nation’s largest retired EV battery projects, according to Element.

Solving the technical challenges for second-life batteries

B2U manages more than 2,000 retired batteries through its system, which coordinates the performance of the batteries, cabinet and overall power plant. The data they collect in real time allows them to monitor the temperature of the battery packs and voltage levels. The firm has another 2,000 end-of-automative-life batteries at some stage of deployment, Hall says, that will soon be ready to plug into the grid.

Each time the firm receives a batch of EV batteries, B2U performs its own diagnostic tests, with some 5 or 6% rejected because of substandard health.

The testing, coupled with how they configure the batteries in their cabinets, allow the retired batteries to operate despite variance in their capacities. In laymen’s terms, if a weaker battery has charged up and reached its voltage limit, the way B2U links their battery packs ensures that the stronger batteries can keep charging until they’re full. “That’s kind of key to solving the problem of second-life batteries,” Hall says.

Repurposed EV batteries aren’t something you hear of much in ERCOT, or in other grids across the United States. As one of the early innovators, it’s taken B2U nearly five years to get the core technology ironed out, cost effective and ready to scale, Hall says. He says they got their timing just right. Since they started B2U in 2019, EV car sales in North America have nearly tripled. It means a steady flow of retirement-ready batteries available for their next career stabilizing the grid and staving off early recycling of critical minerals.

“You haven’t heard about it much to date,” Hall says of second-life EV battery use. “But you will be hearing a lot more about it going forward.”

Arcelia Martin is an award-winning journalist at Inside Climate News. She covers renewable energy in Texas from her base in Dallas.

The post Used EV batteries are poised to play a bigger role in grid-scale energy storage appeared first on Corporate Knights.