Will We Stop Wasting Energy?

Abstract

The rapid growth of electric vehicle adoption increases the urgency of developing circular solutions for end-of-life batteries. Repurposing EV batteries for stationary storage can reduce environmental impacts and human rights risks embedded in critical raw material supply chains, as well as Europe’s dependence on critical raw materials. Yet, the development of repurposing markets remains uncertain and differs across countries. Current research provides limited insight into how national contexts shape the diffusion of EV battery repurposing over time, particularly in relation to the dynamic and complex nature of this market. This thesis addresses this gap by analysing how contextual differences for the Netherlands and Sweden influence the diffusion of EV battery repurposing technology by answering the following research question: “How do the national contexts of the Netherlands and Sweden affect the diffusion of EV battery repurposing technology?”

To answer this question, a merged system dynamics model was developed by integrating two system dynamics models. The Circubat model captures the long-term market dynamics of the second-use EV battery sector from a profit-oriented perspective, incorporating country-specific parameters for supply, demand, treatment capacity, and policy interventions tailored to the Netherlands and Sweden. In parallel, a hybrid Technological Innovation Systems model evaluates innovation performance at a more abstract level. By integrating these two approaches, the merged model provides insights not only into the diffusion volumes of repurposed EV batteries, but also into the overall strength and quality of the underlying innovation system.
Although projected end-of-life EV battery streams are similar in both countries, diffusion volumes are substantially higher in the Netherlands. This is primarily driven by stronger structural demand for decentralised flexibility, resulting from high solar PV penetration and increasing grid congestion. From a system-dynamics perspective, demand functions as the central catalyst: stronger demand activates reinforcing feedback loops between scale, cost reductions, learning, and capacity expansion, whereas weaker demand dampens these dynamics and constrains long-term scaling. However, higher diffusion volumes do not necessarily indicate a well-developed innovation system. The Technological Innovation System assessment shows that overall system performance in both countries remains below half of its potential, reflecting persistent structural weaknesses that continue to constrain large-scale diffusion. Policy experiments testing taxation of new batteries, consumer subsidies for repurposed batteries, and demonstration funds reveal that effectiveness depends on the dominant national bottleneck. In demand-constrained Sweden, demand-oriented measures, particularly taxation and subsidies, effectively stimulate both demand and capacity expansion, while in the Netherlands their impact on supply remains limited due to feedstock constraints. Demonstration funds show more context-dependent effects, as higher input costs can raise prices and dampen demand under certain conditions. These findings underscore that policy effectiveness is strongly conditioned by national structural factors and requires alignment with the specific bottlenecks within each innovation system.