Ownership and Liability
Welcome back all!
This month the discussion will be around the topic of traction battery ownership and liability. This is an important topic when considering implementing circular economy principles such as remanufacturing.
If we consider the reverse logistics return channels (illustrated in the above figure) for and EV to the Authorised Treatment Facility (ATF), the owner of the battery can change as it moves through the reverse channels. The producer responsibility as set out below does not change. The changing of ownership throughout the battery’s life could make tracking the producer down more challenging if labels are damaged, lost or changed and battery itself also changed in some way.
Under the definitions in various pieces of European and UK legislation such as the Batteries Directive, the batteries in electric vehicles are classified as Industrial Batteries. The EU’s Directive 2006/66/EC [dated 6th September 2006] on Batteries and Accumulators and Waste Batteries and Accumulators set out the initial set of regulations for batteries. The Batteries legislation aims to make producers responsible for the costs of dealing with their batteries.
Thus it is important to understand who is the owner and who is the producer of the battery at the point were the End-of-Life decision is made as the owner have the right to send an EV traction battery for recycling without incurring any cost and the producer who is defined as the person that “puts the battery on the market for the first time” will be responsible for the cost of the battery. It is also important to understand who the owner is in the reverse logistics supply chain to be able to gauge if any more value can be extracted from the battery. An example of this could be: If a battery reaches End-of-Life and it was leased the ownership falls to the producer of the battery, in this case the vehicle manufacturer, who could then make a decision to remanufacture the battery to capture value and avoid recycling cost. If the End-of-Life battery is under the ownership of the current vehicle owner they could sell it to a 3rd party remanufacturer, which could replace all the cells with a different chemistry and sell it on. In this case, the producer responsibility still falls to the vehicle manufacturer and they might have to deal with a battery at the end of the battery’s second life that contains cells with a unknown chemistry making recycling more risky and costly.
Thus considering who is liable and who owns it in the reverse logistics supply chain of End-of-Life EV traction batteries is important and needs careful consideration.
Until next time!
The ABACUS Team.