Transactions for trading used electric vehicle batteries: theoretical underpinning and information systems design principles

Abstract

Proof-of-concept projects have demonstrated that used electric vehicle batteries (EVBs), after their removal from electric vehicles due to insufficient performance, can be repurposed for less demanding applications. It is expected that numerous batteries will be available for repurposing in the 2020s. However, the information asymmetries and transaction costs of trading used EVBs have remained unexplored, as have principles that guide the design of information systems that support the trade. Based on existing literature and in-depth interviews with battery experts, we conceptualize two key transactions for trading used EVBs. We then identify potential information asymmetries and transaction costs based on new institutional economic theory and propose five design principles that information Electronic supplementary material The online version of this article (https://doi.org/10.systems should implement to address these information asymmetries and transaction costs. Subsequent research can build on our results to further frame the economic properties of trading used EVBs and to design information systems in line with new institutional economic theory.

Towards a business model for second-life batteries: Barriers, opportunities, uncertainties, and technologies

“…OEMs can fully or partially share their knowledge, data and the uncertainties of the second-life battery business with intermediaries or simply sell second-life batteries [28]. According to [30], transferring ownership of used batteries to an intermediary company may involve different risks for both the OEM and the intermediary company. The OEM runs the risk of losing control of the used EV battery market, data leakage, the "know-how" of its technology, and the risk of damage to its brand in an accident or low performance.…”

“…It may not be sure of the number of batteries available, the quality, or the performance. Therefore the contract must be well-drafted, if possible, on a secure platform to guarantee the right of both parties [30].…”

“…This adds some uncertainty about the performance, lifetime, reliability and safety of a battery in a secondary application. In addition to being dangerous equipment whose handling and transportation require specific knowledge, EV batteries also have encryption components to protect data [30]. Therefore, it is difficult for EV owners to market these batteries to each other.…”

“…Battery manufacturers and/or car manufacturers want to protect their brand, and an accident involving their battery can lead to a moral hazard [30]. Therefore, protecting battery data and storing that data in an immutable, authenticatable and secure way, as well as implementing both parties' consensus in smart contracts will reduce conflict of interest issues.…”

Reviewing Regulations and Standards for Second-Life Batteries

“…It is also possible that the owner of an EV participates in the chain receiving benefits for taking care of the temperature and battery charge, driving on roads with suitable conditions, not having aggressive behavior behind the wheel, and consequently preserving the battery's SoH. On the other hand, a user who stresses the battery during the first life may not receive benefits or be penalized for such potential abuse behavior [25,34,39,42,43].…”