A cell pulled out of a car at 70% state of health, dropped into an energy storage system, and asked to work for another 25 years. Lina, chief executive of Nidec Energy, cannot make that sum close. "I'm not sure that will actually compute," she says.
Her case against second-life batteries starts, oddly, with a compliment. The batteries in cars today are too good. They last a very long time and may even outlast the car around them, which is exactly why the recycling business is short of feedstock: the packs everyone was counting on are still out on the roads.
There is a design mismatch on top of that. A cell built for a vehicle wants quite different characteristics and quite different performance from a cell built to sit in a storage park for two decades.
So her alternative is to leave the battery where it is. Push the pack in the car for as long as it will go, through repair strategies or through something like the way Tesla extends the state of charge range over time, and then recycle it very efficiently at the end.
She does not pretend the present position is comfortable. The industry is mining materials for new batteries while efficient recycling is still being built, and she calls that the big dilemma. Her hope is that as the recycling industry emerges, the proportion of recycled material in new cells climbs.
Being in the middle of the chain makes compliance a negotiation
Nidec Energy is a joint venture. One shareholder is Nidec, a Japanese-owned group with a long history in motors and inverters and a more recent presence in storage. The other is FREYR, which is where the cell supply comes from. The company builds modules and DC blocks in Europe and sells them on to system integrators.
That position, buying cells at one end and selling assembled product at the other, is what makes the European battery regulation an awkward question rather than a checklist. Does Nidec Energy take everything back and handle it all itself, or does some of that obligation move up to the cell supplier under a collaborative agreement?
Her answer is that the question cannot be solved inside one company. A manufacturer has to take its whole supply chain into account rather than trying to figure out its own solution in isolation, and transparent data handling between companies, through the whole chain, is what makes compliance workable at all.
What is striking is how cheerful she is about the obligation itself. She is in favour of the legislation, particularly the passport, and says she is proud that Europe is taking the lead and pushing ethics in the battery industry. It is hard, nobody yet knows exactly what has to be done, and she treats that as something to learn and explore rather than a grievance. This is not, in her framing, something to agonise about or try to avoid.
The rules follow the market, and the market is wider than Europe
The week before the interview she had visited a Chinese cell supplier. They were preparing for the same requirements, for the straightforward reason that they want to sell their product in Europe.
That, to her, is the point people miss when they call the regulation a European handicap. The rules apply to whoever supplies the market, which makes it a level playing field rather than a local tax.
She also expects the requirements to travel. Suppliers who intend to be global will most likely comply across the board, because doing it once and making it the company standard is easier than running two systems. Players who want to stay local may avoid it for a while. In the long run, though, she thinks the effect propagates: "it's the rings on the water here."
NMC is on its way out of storage, and sodium-ion is next
On chemistry she is blunt and puts dates on it.
NMC, she expects, will be out of BESS in the near future, with most of the industry moving to LFP at this stage. After that comes sodium-ion, which she thinks will be the dominating chemistry: maybe not five years from now, but certainly ten years from now, depending on how quickly industrialisation and commercialisation progress. The pace of change is not confined to chemistry either, she notes, pointing at solid state and at new materials arriving behind it.
The reason LFP won the current round goes beyond the cell price. Storage assets are being sold today with 20 and 25 years of life in them, and 15-year warranties are already not particularly uncommon. LFP holds up to that duty cycle.
Then the safety benefit compounds through the rest of the project. The safer the cell, the easier the permitting process for the whole storage park. There is also less requirement for active cooling inside the system, which takes a lot of cost out again. Her verdict on the comparison is unqualified: the benefits of LFP over NMC are enormous already today.
Warranty length is not a technical detail in this market. It is the security the financing side is looking for, and it is the thing second-life product has never been able to match.
The only cost a manufacturer completely controls
Manufacturing cost, in her account, has three parts, and they are not equally within reach.
There is the CapEx paid up front and the depreciation that follows it. There is the raw materials cost, which good agreements can influence to some extent. And there is the OPEX, which the company controls entirely, and which therefore deserves a great deal of effort.
The same division follows the product out to site. What decides whether an energy storage solution works in the field is what it costs the customer to operate it. The customer should be making money from the asset rather than losing it to poor efficiency, or to a large cooling system, or to whatever else was allowed to creep into the running cost.
Which is where the chemistry argument and the cost argument meet. A safer cell that needs less cooling clears permitting faster, and then keeps turning up in the running cost every year afterwards for whoever has to live with the asset.
Europe, she observes, has been so focused on EVs and e-mobility. Storage is arriving now, on the back of renewables.
This piece draws on the full conversation, which is available with a complete transcript on the episode page.