# Economic Analysis of Potential Secondary Use of Batteries from Electric Vehicles
## 3 Economic Analysis
### Input Parameters for the Calculation and 2 nd Life Battery Pricing  
The unit price of the battery is a key expense for most buyers. Due to the technological progress, the production costs of new lithium batteries per 1 kWh have fallen by hundreds of euros in the last decade, but it is still a very expensive item. The development and projection of the unit price of a lithium battery in the future are described in the BloombergNEF chart. The key determinant of this forecast is the relationship between price and volume. From the observed historical values, a learning rate of about 18% was calculated. The learning speed is a hyperparameter that controls the extent to which the model needs to be changed in response to an estimated error each time the model weights are updated. This means that for each doubling of the cumulative volume, an 18% decrease in price was observed. Based on this observation and forecast of battery demand, the price of the average battery is therefore expected to be around 94 USD/kWh by 2024 and 62 USD/kWh by 2030 but this is only the expected average price (see Figure 2). [18]Back in 2010, when the production of the first middle-class EVs (such as the Nissan Leaf), the unit price per 1 kWh was $1160. At that time, EVs were fitted with a battery with a capacity of 24 kWh, which means that the price of the battery itself reached values of 20 thousand euros. If the base selling price of the Nissan Leaf was $33,000 ($24,000), then the financial unprofitability of the vehicle is evident. Five years later, the price of batteries was already at 377 USD/kWh. The final price in 2030 is still set at 62 USD/kWh, but the final price in the distant future will be affected by the economic advantage of recycling lithium batteries. The value of the theoretically delivered energy per year is calculated using the entered parameters, such as the DoD, the charging voltage, the capacity degradation of the new battery and the number of CCs. Regarding the dependence of the DoD and the charging voltage on the total number of cycles, a simple example is given lithium-ion batteries at an operating voltage of 3.6 V are usually charged to a voltage of 4.2 V to achieve a nominal value of the battery. Of course, it is also possible to charge higher or lower voltages. However, this change will have a major impact on both the total charge capacity of the battery and the total number of CCs. Reducing the charging voltage by 0.1 V doubles the possible number of cycles, but also reduces the usable battery capacity by approximately 15% [19]. There is still not enough evidence today to accurately determine the dependence of battery degradation on mileage. Data on its batteries are given only by Tesla, which claims to have very low degradation. Other automotive companies do not publish data, so experimental measurements on a limited number of samples must be taken into account. According to publicly available materials, the degradation of the Tesla 100 kWh battery from the S and X models was chosen and also the 40 kWh battery from Nissan Leaf (see Figure 3). Based on these two possibilities, the process of degradation was determined for a computational model with a 43 kWh battery. The graph shows a significant difference between the batteries from manufacturers. Tesla, which often presents itself as an innovative company in the field of electromobility, has achieved respectable results, probably with a constantly updated control system for charging and discharging in cooperation with a large battery. On the contrary, in a competition that uses a much smaller battery, degradation is noticeable. Therefore, most automotive companies offer a battery replacement guarantee. For example, with a 40 kWh battery, the Nissan Leaf now offers a warranty of 8 years or approximately 160,000 km. Figure 2: Development of the price of lithium batteries and the expected price outlook for the next years [18].