IDTechEx Report: US Lags China and EU in Second-Life EV Battery Innovation, Highlighting Challenges and Opportunities

July 12, 2026

Energy Central / IDTechEx USA

Overview

According to IDTechEx’s analysis, the U.S. is falling behind China and the European Union in innovation and deployment within the second-life (2L) electric vehicle (EV) battery application market. Despite losing capacity, EV batteries remain viable for stationary power storage for up to 10 years after they are no longer suitable for vehicles, with 2L batteries playing a crucial role complementing recycling. The U.S. urgently needs to accelerate infrastructure development and innovation to manage the anticipated large volume of retired EV batteries, presenting a significant opportunity for the circular economy.

In Depth

Key Findings

A recent report by IDTechEx highlights that the United States is lagging behind China and the European Union in innovation and widespread market adoption of second-life (2L) electric vehicle (EV) battery applications. This analysis underscores both the challenges and the significant opportunities for the U.S. in maximizing the value of end-of-life EV batteries and accelerating a sustainable energy transition.

Technical Details

When EV batteries are deemed unsuitable for vehicular use, their capacity typically degrades to around 70-80% of their original state. However, these batteries can continue to function effectively as stationary energy storage systems (ESS) for up to an additional 10 years, particularly in applications with less fluctuating power demands. The core concept of 2L batteries is to maximize their residual value before direct recycling. This approach reduces the need for raw material extraction for new battery manufacturing, lowers CO2 emissions, and can significantly decrease the cost of new energy storage solutions. IDTechEx points out that China and the EU are leading in this sector, actively deploying 2L batteries for applications such as grid stabilization and renewable energy integration.

Background & Context

With the rapid proliferation of electric vehicles, a massive influx of retired EV batteries is anticipated in the coming years. The efficient and environmentally responsible management of these batteries is a pressing concern and a critical component of the circular economy. 2L battery solutions complement recycling efforts by extending the battery lifecycle and promoting the efficient utilization of valuable resources. Although the U.S. is committed to climate action and strengthening domestic supply chains, it lags behind other nations in developing 2L battery technologies and infrastructure. This delay could become a potential bottleneck in managing the large volume of end-of-life batteries in the future.

Strategic Significance & Outlook

The IDTechEx report emphasizes the urgent need for the U.S. to accelerate innovation and infrastructure development in the second-life EV battery market. Through collaborative efforts among government, industry, and research institutions to strengthen technology development, policy support, and investment, the U.S. can regain competitiveness and create new economic opportunities in this sector. Specifically, 2L batteries are expected to expand their role as cost-effective energy storage solutions that contribute to grid modernization, renewable energy integration, and enhanced resilience during disasters. Innovation in this market will be a crucial driver for achieving a sustainable mobility and energy future.

Source: https://www.energycentral.com/energy-biz/post/second-life-2l-electric-vehicle-ev-battery-challenges-us-innovation-VtMj9ZexQYpqyDb

Get our weekly technology intelligence — free

Receive an infographic that lets you judge at a glance whether each field’s analysis report is worth reading.

Subscribe Free — Weekly Tech Intelligence

By subscribing, you’ll receive Troy-Technical’s weekly technology intelligence newsletter.