The Technology Valley of Death of Circular Economy Solutions: A System Dynamics Simulation of Business Strategies for the Second-Use Battery Industry
M.D. Kubli (TU Delft - Technology, Policy and Management)
Juliane Seika (University of St. Gallen)
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Abstract
Retired electric vehicle (EV) batteries can be repurposed to stationary storage batteries. While this circularity solution has attracted attention from entrepreneurs, falling battery prices, along with the longer lifetime of new batteries, high consumer expectations and limited governmental support challenge the approach. This paper investigates whether the second-use EV battery industry is at risk of getting trapped in the ‘valley of death’ (VoD). We developed a system dynamics model and assessed the impact of 12 business strategies. Based on the simulations, some strategies yielded positive returns, while others resulted in a VoD scenario, risking business failure. Subsidising repurposed EV batteries emerged as the most effective strategy to boost commercialisation. Conversely, two plausible and well-intended strategies risk reinforcing VoD conditions: focusing exclusively on the premium end-of-life battery market and relying solely on cooperation with original equipment manufacturers.
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