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4.5.4 Liability Where EV batteries are repurposed for subsequent non-EV uses, there may be unresolved questions concerning liability that might flow back through to the vehicle and/or the battery manufacturers (or vehicle owner), should the batteries or cells fail in a way causing significant harm to human health or the environment. Repurposed batteries are considered a greater risk of failure, therefore one research paper published in 2019 notes that insurance premiums are higher for their use.100 The paper raises the issue of liability related to second-life EV batteries stating: As defects to the repurposed battery may cause some damage to people or property through fires or leaks, the question of who would be liable in such a situation is important. Battery and electric vehicle manufacturers develop the battery and related software and hardware to insure that the battery performs as intended in the vehicle. However, these corporations do not design their systems with the intent of third parties who would use the battery packs for second uses. If the second-life uses of the battery result in damages, then the automotive manufacturers may be liable as current regulations and standards are unclear. Because of this lack of clarity around their liability, original equipment manufacturers (OEMs) are hesitant to allow their EV batteries to be re-purposed for grid storage applications, resulting in them being recycled or sent to a wrecking yard. Repurposed EV batteries are a new technology, which means that there is a lack of statistical data for insurance companies to calculate premiums. Because insurance companies are risk-averse, they are likely to set higher premiums for homeowners using this technology.101 The question of ownership relates to who would be held responsible in the event that the repurposed battery causes damage to people or property, for example, through fires or leaks. As explained in a recent academic paper: Battery and electric vehicle manufacturers develop the battery and related software and hardware to insure that the battery performs as intended in the vehicle. However, these corporations do not design their systems with the intent of third parties who would use the battery packs for second uses. If the second-life uses of the battery result in damages, then the automotive manufacturers may be liable as current regulations and standards are unclear. 102 As a result of the lack of clarity around OEM’s liability, they may be reluctant to allow their EV batteries to be repurposed for energy storage applications, resulting in them either being recycled or sent to a scrap yard. 100 Catton, J.W.A., Walker, S.B., McInnis, P., Folwer, M., Fraser, R.A., Young, S.B., and B. Gaffney. (2019). “Design and Analysis of the Use of Re- Purposed Electric Vehicle Batteries for Stationary Energy Storage in Canada.” Batteries, 5(14), 1-19 101 Ibid. 102Catton, J.W.A., Walker, S.B., McInnis, P., Folwer, M., Fraser, R.A., Young, S.B., and B. Gaffney. (2019). “Design and Analysis of the Use of Re- Purposed Electric Vehicle Batteries for Stationary Energy Storage in Canada.” Batteries, 5(14), 1-19. KELLEHER RESEARCH STUDY ON REUSE AND RECYCLING OF BATTERIES EMPLOYED IN ELECTRIC VEHICLES FINAL REPORT SEPTEMBER, 2019 PAGE 43PDF Image | Reuse and Recycling of Batteries Employed in Electric Vehicles
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