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Lucid Motors sees a second life for its EV batteries in energy storage

Aria Alamalhodaei
·5-min read

Lucid Motors has designed the battery packs in its luxury electric vehicle for two lives. The company, which is already experimenting with energy storage systems for commercial and residential customers, is also eyeing ways to repurpose batteries from its electric vehicles.

While Lucid is still years from having to contend with a large number of used batteries — its first EV, the luxury Lucid Air sedan, isn't coming to market until the second half of 2021 — the company is already planning how to give them a second life them in a yet-to-be-launched energy storage business.

The battery-cell modules that power Lucid’s vehicles are identical to the ones that will be used for energy storage, making them well-suited for “second-life” purposes, according to the company. The company has already constructed a prototype of a 300-kilowatt hour stationary battery storage system at its engineering lab, Lucid’s Chief Engineer and Senior VP of Product Eric Bach told TechCrunch. The batteries in that system are new, but there is “no technical limitation” that would prevent Lucid from swapping them out with used batteries, Bach said. While Lucid CEO and CTO Peter Rawlinson has previously discussed plans to eventually build energy storage systems like Tesla that uses new batteries, this is the first time the company has talked about second-life applications for the product.

Batteries typically retain a charging capacity of around 70% once they’re removed from EVs, which means they potentially have another decade of useful life. Automakers like General Motors, Ford Motor, and Audi AG have already initiated second-life pilot projects aimed at extracting that remaining value.

Bach explained the company will likely retrieve batteries used in Lucid EVs after they reach the end of their useful life through its dedicated service centers or when customers trade in their vehicles. Once batteries are returned to Lucid, the company would need to harvest the modules from the packs and run a quality check on them. Lucid’s vehicles have built-in sensors that provide data on each of its cars from the battery packs down to the module level, Bach said, which will come in handy when determining the health of each module. After physical testing, the modules could be ready to be placed in an outgoing product.

Storage systems do contain some additional components. In a home system, that may include a DC-to-AC inverter, a cooling system and safety switches. The actual battery will remain consistent across Lucid’s products.

Lucid hasn’t determined how it will distribute the second-life batteries between home and industrial applications.

“Personally, I feel in an industrial application, using these [second-life] modules would be more appropriate and easier because there, the key metric is really just dollars per kilowatt hour,” Bach said.

In instances where a Lucid vehicle ends up at a car dismantler, Bach suggested there may be an opportunity to incentivize the dismantler to feed the battery packs back to the company. Even if that doesn’t happen, as the price of EV battery raw materials continues to rise, dismantlers will likely make their own business of selling battery packs to companies or recyclers.

At this point – with no product yet on the market and with an expectation that it will be low- to mid-volume – Lucid has not started branching out into recycling materials itself, he said. For the moment, Lucid is leaving recycling operations to its battery cell suppliers, like South Korea-based LG Chem.

“But in the long run, I mean, we’re just at the start of our journey [. . .] and I can envision that in multiple years we will look into cell manufacturing ourselves as well as the full value chain for everything that’s needed to make the applicable energy storage devices,” Bach said. “So in the future, absolutely it makes a lot of sense as the volume goes up, you need to try to contain more of the supply chain and that goes back into a sustainable method of harvesting the raw materials.”

Bach said the company is laser-focused on the Lucid Air and the public may be a few years out from seeing a Lucid home battery system. Until then, the Lucid Air will come equipped with bidirectional charging capabilities, meaning the customer will be able to feed the power from her car into her house.

“Essentially, that is the first home battery system that we will have already,” Bach said.

It's unclear what resources — in terms of people and capital — Lucid is putting towards an energy storage business. Such details are likely to remain scant until after the company officially becomes a publicly traded company. In March, Lucid Motors announced it had reached an agreement to become a publicly traded company through a merger with special-purpose acquisition company Churchill Capital IV Corp., in what was considered the largest deal yet between a blank-check company and an electric vehicle startup.

The combined company, in which Saudi Arabia’s sovereign fund will continue to be the largest shareholder, will have a transaction equity value of $11.75 billion. Private investment in the public equity deal is priced at $15 a share, putting the implied pro-forma equity value at $24 billion.

The funding will be used to bring the Lucid Air and an SUV to market as well as to expand its factory in Arizona, Lucid CEO and CTO Peter Rawlinson previously told TechCrunch. The company plans to expand the factory over another three phases in the coming years to have the capacity to produce 365,000 units per year at scale. The initial phase of the $700 million factory was completed late last year and will have the capacity to produce 30,000 vehicles a year.