A Market for Trading Used Electric Vehicle Batteries - Theoretical Foundations and Information Systems

Various automotive companies have demonstrated that used electric vehicle batteries (EVBs), after having been removed from electric vehicles (EVs) due to insufficient capacity or power, can still be repurposed as energy storage for stationary applications. If predictions on the diffusion of EVs prove true, a large amount of used EVBs will be available for repurposing until the end of this decade. As yet, the fundamental economic properties of a market for used EVBs are unexplored. Additionally, the role of information systems as enablers for second life business models and tools for trading used EVBs has not been investigated. Inspired by seminal economic theories and based on reviewing the market for used automotive parts, we offer a first conceptualization of three forms such a market might take, along with their economic properties and stakeholders. We subject these market forms to a conceptual transaction cost analysis and an empirical inquiry based on semi-structured interviews. We find that a market for used EVBs will likely emerge as an intermediary-based market that is supported by automobile companies. Against this backdrop, decision support systems seem to be a more suitable class of information systems than electronic marketplaces to enable the trading of used EVBs.

[1]  Rainer Lucas,et al.  End-of-life vehicle regulation in Germany and Europe: Problems and perspectives. Discussion paper of the project "Autoteile per Mausklick" financed by the QUATRO-Programme , 2001 .

[2]  Gautam Biswas,et al.  Decision support systems: An expert systems approach , 1985, Decis. Support Syst..

[3]  Stanton G. Cort,et al.  Information Asymmetry and Levels of Agency Relationships , 1998 .

[4]  Lars Ole Valøen,et al.  Life Cycle Assessment of a Lithium‐Ion Battery Vehicle Pack , 2014 .

[5]  Christer Carlsson,et al.  Past, present, and future of decision support technology , 2002, Decis. Support Syst..

[6]  P. Novák,et al.  Memory effect in a lithium-ion battery. , 2013, Nature materials.

[7]  Jeremy Neubauer,et al.  A Techno-Economic Analysis of PEV Battery Second Use: Repurposed-Battery Selling Price and Commercial and Industrial End-User Value , 2012 .

[8]  Valerie J. Trifts,et al.  Consumer Decision Making in Online Shopping Environments: The Effects of Interactive Decision Aids , 2000 .

[9]  O. Williamson,et al.  Markets and Hierarchies: Analysis and Antitrust Implications. , 1977 .

[10]  L. Ahmadi,et al.  Energy efficiency of Li-ion battery packs re-used in stationary power applications , 2014 .

[11]  Louis A. Le Blanc,et al.  DSS software selection: A multiple criteria decision methodology , 1989, Inf. Manag..

[12]  G. Walker,et al.  A Transaction Cost Approach to Make-or-Buy Decisions , 1984 .

[13]  Maxime Montaru,et al.  Statistical analysis for understanding and predicting battery degradations in real-life electric vehicle use , 2014 .

[14]  Reiner Korthauer,et al.  Handbuch Lithium-Ionen-Batterien , 2013 .

[15]  Johan Östlin,et al.  Importance of closed-loop supply chain relationships for product remanufacturing , 2008 .

[16]  R. Coase.  The Nature of the Firm , 1937 .

[17]  Ethan Elkind,et al.  Reuse and Repower: How to Save Money and Clean the Grid with Second-Life Electric Vehicle Batteries , 2014 .

[18]  Zhe Li,et al.  A comparative study of commercial lithium ion battery cycle life in electrical vehicle: Aging mechanism identification , 2014 .

[19]  Andrew Burke,et al.  Performance, Charging, and Second-use Considerations for Lithium Batteries for Plug-in Electric Vehicles , 2009 .

[20]  Marco Stampanoni,et al.  Visualization and Quantification of Electrochemical and Mechanical Degradation in Li Ion Batteries , 2013, Science.

[21]  Daniel J. Power,et al.  Web-Based and Model-Driven Decision Support Systems: Concepts and Issues , 2000 .

[22]  C. Prahalad,et al.  The Core Competence of the Corporation , 1990 .

[23]  Steven L. Alter.  A work system view of DSS in its fourth decade , 2004, Decis. Support Syst..

[24]  C. Hoyer.  Strategische Planung des Recyclings von Lithium-Ionen-Traktionsbatterien , 2015 .

[25]  A. Keeli,et al.  Optimal use of second life battery for peak load management and improving the life of the battery , 2012, 2012 IEEE International Electric Vehicle Conference.

[26]  Janni Nielsen,et al.  European Conference on Information Systems (ECIS) , 2008 .

[27]  Shirley Gregor,et al.  The Anatomy of a Design Theory , 2007, J. Assoc. Inf. Syst..

[28]  I. Pulford.  Waste Electrical and Electronic Equipment (WEEE) , 2013 .

[29]  R. Yin.  Case Study Research: Design and Methods , 1984 .

[30]  George A. Akerlof.  The Market for “Lemons”: Quality Uncertainty and the Market Mechanism , 1970 .

[31]  Herbert A. Simon,et al.  Human Nature in Politics: The Dialogue of Psychology with Political Science , 1985, American Political Science Review.

[32]  T. Baumhöfer,et al.  Production caused variation in capacity aging trend and correlation to initial cell performance , 2014 .

[33]  John R. Nevin,et al.  Performance Outcomes of Purchasing Arrangements in Industrial Buyer-Vendor Relationships , 1990 .

[34]  Ovsei Gelman,et al.  The Case for Conceptual Research in Information Systems , 2008 .

[35]  Delphine Riu,et al.  A review on lithium-ion battery ageing mechanisms and estimations for automotive applications , 2013 .

[36]  Christof Weinhardt,et al.  Market-Engineering , 2003, Wirtschaftsinf..

[37]  Jay Lee,et al.  Review and recent advances in battery health monitoring and prognostics technologies for electric vehicle (EV) safety and mobility , 2014 .

[38]  Daniel Beverungen,et al.  A Business Process Model for the Reverse Logistics of Used Electric Vehicle Batteries , 2014, GI-Jahrestagung.

[39]  Jianqiu Li,et al.  A review on the key issues for lithium-ion battery management in electric vehicles , 2013 .

[40]  Ralph H. Sprague,et al.  Building Effective Decision Support Systems , 1982 .

[41]  Yannis Bakos,et al.  A Strategic Analysis of Electronic Marketplaces , 1991, MIS Q..

[42]  Daniel Beverungen,et al.  A Domain-Specific Modeling Language for Electric Vehicle Batteries , 2015, Wirtschaftsinformatik.

[43]  M. C. Jensen,et al.  Harvard Business School; SSRN; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI); Harvard University - Accounting & Control Unit , 1976 .

[44]  Michelle Marinich Rogers.  Timing Of Residential Electric Loads To Reduce Air Emissions From Power Generation , 2012 .

[45]  Joseph Dorfman,et al.  Institutional Economics , 2023 .

[46]  Jayashankar M. Swaminathan,et al.  Managing New and Remanufactured Products , 2006, Manag. Sci..

[47]  O. Williamson.  Transaction-Cost Economics: The Governance of Contractual Relations , 1979, The Journal of Law and Economics.

[48]  O. Williamson.  The Economics of Organization: The Transaction Cost Approach , 1981, American Journal of Sociology.

[49]  Rainer Lucas.  Altautoverwertung zwischen Staat und Markt: Bedingungen und Potentiale zur Modernisierung von Lagerhaltung und Marketing gebrauchter Autoteile , 2000 .

[50]  Fa-Hwa Shieh,et al.  Second Use of Retired Lithium-ion Battery Packs from Electric Vehicles: Technological Challenges, Cost Analysis and Optimal Business Model , 2012, 2012 International Symposium on Computer, Consumer and Control.

[51]  Paolo Leon.  The Economic Institutions of Capitalism , 1986, The Antitrust Bulletin.

[52]  Pranab Bardhan,et al.  The new institutional economics and development theory: A brief critical assessment , 1989 .

[53]  Ronald H. Coase,et al.  The New Institutional Economics , 1998 .

[54]  Hao Wang,et al.  Providing a Service for Interactive Online Decision Aids through Estimating Consumers' Incremental Search Benefits , 2011, ICIS.

[55]  Izak Benbasat,et al.  Interactive Decision Aids for Consumer Decision Making in E-Commerce: The Influence of Perceived Strategy Restrictiveness , 2009, MIS Q..

[56]  Daniel Beverungen,et al.  Extending Battery Management Systems for Making Informed Decisions on Battery Reuse , 2015, DESRIST.

[57]  JoAnne Yates,et al.  Electronic markets and electronic hierarchies , 1987, CACM.

[58]  Barton A. Weitz,et al.  Forward Integration into Distribution: An Empirical Test of Transaction Cost Analysis , 1988 .

[59]  K. Spremann.  Agent and Principal , 1987 .

[60]  Christian Rehtanz,et al.  Balancing Renewable Electricity: Energy Storage, Demand Side Management, and Network Extension from an Interdisciplinary Perspective , 2012 .

[61]  Jan van Dalen,et al.  Balancing with Electric Vehicles: a Profitable Business Model , 2014, ECIS.