The Hyundai Motor Group will enter the energy storage system (ESS) business by reusing batteries from scrapped electric vehicles (EVs).
The automotive group announced that it has signed a strategic partnership agreement with Wartsila Corporation, a global energy company headquartered in Finland, at Imperial Palace Hotel in Seoul on June 26.
Wartsila has built power generation facilities with 67GW capacities in 177 countries. Hyundai Motor plans to secure a leading position in the ESS market by collaborating with Wartsila in an open innovation manner.
This project would allow the Korean auto giant to preemptively address an EV battery recycling issue and at the same time enter the ESS sector. An electric car battery cannot avoid its performance deterioration after a certain period of use like a mobile phone battery. Therefore, when electric cars are scrapped or old batteries in electric cars are replaced with new ones, waste batteries are generated. The key idea of the project is to recycle such waste batteries and use them in building industrial ESSs. An ESS stores generated power and supplies it when it is needed. It is an indispensable system for utilizing new and renewable energy whose power generation volume is not steady. This business is growing in line with the spread of new and renewable energy.
According to the global electric car industry, if an electric car battery used for seven to eight years is recycled, the electric car battery can hold for more than 10 years, showing 70% to 80% of its initial performance. It is forecast that the amount of recycled electric car batteries will increase from 0.1GWh in 2016 to 29GWh in 2025 and 10GWh of the 29GWh will be used for ESSs.
Based on the agreement, the Hyundai Motor Group will focus on the development of ESS technology and business viability. In particular, the group will seek to build a business model where the new ESS business and the electric car market develop in a virtuous cycle. The Hyundai Motor Group is currently carrying out a demonstration project to build a 1MWh ESS facility on Hyundai Steel's Dangjin plant by recycling batteries from Hyundai's Ionic Electric and Kia's Soul EV. "We will be able to develop commercialized industrial ESSs within three years," a group official said.