Climate change necessitates a swift transition to clean energy, where lithium-ion batteries (LIBs) play a crucial role as the dominant power source in electric vehicles (EVs) and stationary energy storage. The surge in global EV sales presents significant challenges in managing retired LIBs. Inappropriate handling leads to environmental pollution, resource loss, and increased waste management pressure. To mitigate these risks, reuse and recycling of retired batteries are advocated. Reuse extends battery lifespan, lowers costs, and minimizes raw material demand. Recycling recovers valuable materials. Previous research has considered the entire battery life cycle or focused on specific reuse scenarios like energy storage systems (ESSs) within power grids. However, a unified assessment methodology is lacking, particularly considering the impact of battery capacity configurations on economic performance and environmental benefits. Larger capacities can increase costs, while optimal alignment with application needs enhances efficiency. Variations in battery capacity also impact electricity load patterns and emissions. Furthermore, the influence of SOH on recycling technology outcomes and the impact of technological innovation on the trade-off between reuse and recycling remain unexplored. This study aims to address these gaps by presenting a decision strategy for optimal reuse and recycling pathways for retired EV batteries, considering economic and environmental factors throughout the entire life cycle.

Existing literature highlights the importance of both reuse and recycling of retired LIBs for sustainable waste management. Some studies take a holistic approach, considering the entire life cycle of the battery, while others focus on specific reuse applications, such as ESSs in power grids. Research has explored various aspects of second-life batteries (SLBs), including improving inconsistency detection, state of health (SOH) estimation, and cathode material sorting for optimal allocation. Life cycle assessment (LCA) is frequently employed to evaluate the environmental impacts of LIBs, with a general consensus that battery reuse reduces these impacts compared to immediate recycling. However, contrasting evidence exists, and the influence of battery capacity configurations is often overlooked. A significant research gap exists in the rational reuse of SLBs in different applications with varying requirements. Regarding recycling, pyrometallurgical, hydrometallurgical, and direct recycling methods have been investigated, but the impact of SOH on their outcomes and the influence of technological innovation on the trade-off between reuse and recycling scenarios are not fully explored. A generally applicable and strategic pathway decision framework for retired LIBs is currently lacking.

This study presents a cradle-to-grave (CTG) life cycle assessment of retired EV batteries, focusing on two cathode chemistries: lithium nickel manganese cobalt oxide (NMC) and lithium iron phosphate (LFP). The methodology encompasses several stages: 1. **New Battery Production:** This stage includes material extraction, refinement, cell production, module and pack assembly. 2. **First Use:** The batteries are used in EVs until they reach a specific SOH (70%, 80%, or 90%). 3. **Refurbishment:** Retired batteries are disassembled, tested, and reassembled for reuse. 4. **Reuse:** SLBs are used in ESSs, CBSs, or LSVs with varying capacity configurations, optimized for profit (ESS and CBS) or average daily profit (LSV). 5. **End-of-Life (EOL):** Batteries are recycled using hydrometallurgical, direct, or pyrometallurgical methods, based on SOH (40%, 50%, 60%, 70%, 80%, 90%). Economic performance is evaluated using indicators such as total profit, unit battery profit, and average daily profit. The carbon footprint is used as an indicator of environmental impact. The study optimizes the total profit (ESS and CBS) and average daily profit (LSV) in the reuse stage by adjusting battery system capacity, and different load profiles were considered. The pricing models for new batteries and SLBs, maintenance costs, and operational costs (including battery degradation) were incorporated into the economic analysis. The carbon footprint calculation considers inputs at each stage (materials, electricity, etc.). The sensitivity of results to lithium salt price, electricity generation mix, and SOH ranges (both during reuse and EOL) was analyzed.

The study's key findings include: * **Reuse Scenario Performance:** ESS scenarios generally yielded higher total profits than CBS scenarios, while CBS scenarios were better in terms of average daily profit. LSV scenarios were generally unprofitable due to lack of renewable energy integration. LFP batteries outperformed NMC batteries in most scenarios due to their longer lifespan and higher efficiency. * **Recycling Technology Performance:** Direct recycling was most profitable for NMC batteries, and hydrometallurgical recycling was most profitable for LFP batteries. The profitability of each recycling method was sensitive to lithium salt prices. Higher SOHs at EOL generally increased recycling profits. * **Optimized Pathway:** Combining reuse (ESS or CBS) with an appropriate recycling technology (direct recycling for NMC, hydrometallurgical for LFP) significantly increased profits and reduced the carbon footprint compared to direct recycling after EV use. LFP batteries demonstrated larger gains from the optimized pathway than NMC batteries. * **Economic and Environmental Trade-offs:** A balance needs to be struck between maximizing short-term economic gains (often associated with NMC batteries and immediate recycling) and long-term economic and environmental benefits (often associated with LFP batteries and extended reuse). * **Capacity Configuration:** Optimal capacity configuration varied depending on the reuse scenario and battery type, reflecting a balance between investment and operational costs. * **Sensitivity Analysis:** Results were shown to be sensitive to parameters such as lithium salt prices, electricity generation mix, and battery SOH at both the end of the first use and at EOL. For example, changes in lithium salt price significantly affected the choice of optimal recycling technology.

The findings demonstrate that a strategic approach to battery reuse and recycling can significantly enhance both economic and environmental performance. The study highlights the importance of considering the entire battery life cycle and the interplay between battery type, SOH, reuse scenario, and recycling technology. The optimized pathways identified offer a substantial improvement over traditional pathways (direct retirement after EV use), showcasing the economic and environmental benefits of maximizing battery reuse before recycling. The results emphasize the superior long-term benefits of LFP batteries, despite NMC batteries showing better short-term recycling returns. This underscores the need for a holistic perspective encompassing both immediate and long-term consequences. The sensitivity analysis indicates the importance of incorporating market fluctuations and policy changes into pathway decisions. The methodology developed provides a valuable framework for decision-making in the battery industry and for policymakers striving for sustainable battery lifecycle management.

This study provides a comprehensive evaluation framework for making optimal pathway decisions for retired EV batteries. The findings demonstrate that combining strategic reuse with appropriate recycling technologies significantly enhances both economic and environmental outcomes. LFP batteries show greater long-term benefits from this approach. Future research should incorporate battery safety considerations, advanced recycling technologies, detailed cost models, and more nuanced analyses of user behaviors and policy incentives to further refine the decision-making framework and promote the development of a truly sustainable battery ecosystem.

The study focused on two dominant battery chemistries (LFP and NMC) and a specific geographic context (Guangdong, China). Extrapolating the results to other chemistries or regions may require adjustments to cost and carbon footprint parameters. The model also simplifies some aspects of the battery life cycle, such as the refurbishment process and the closed-loop recycling of materials, which could be further elaborated in future studies. The failure rate of LIB cells during refurbishment was not considered. The impact of advanced direct recycling technologies and their variable costs and efficiencies are not yet fully understood and could change these results in the future. Finally, integrating more detailed models of human behaviour and policy considerations would further strengthen the analysis.