We're all familiar with rechargeable batteries. Most of us interact with them every day, in our phones, our laptops, and even our toothbrushes. We've learned that batteries wear down significantly over time. We've experienced the frustration of our older phones not even lasting the day. As batteries replace fuel tanks in our vehicles, we naturally want to understand: How will EV batteries perform over time and how will this affect our driving lives and the usefulness of our vehicles?

The Secret Life of EV Batteries

At this moment in the EV transition, battery technology is not well understood outside the community of experts who have pioneered the development and deployment of the modern lithium-ion battery. Few consumers appreciate how much battery quality and performance can vary across EVs, affecting their operational and financial effectiveness.

To be clear, the transformation in the EV outlook—from distant dream to accepted eventuality—is due to huge advances in battery technology during the past 10 years.

Source: IEA, U.S. DOE

Nevertheless, EV batteries remain a mystery for most consumers, creating a sense of doubt and concern that has slowed the rush to mass adoption. In the short run, EV battery fears lie at the root of range anxiety. Over the long haul, uncertainty about battery reliability and longevity raises questions about the economic value of a major investment.

Battery Uncertainty will be a Drag on Resale Values

Data from the current generation of EVs shows that some batteries degrade much faster than others. Variations in battery chemistry, manufacturing processes and battery management software each affect the rate of degradation.

The situation is even more complex for buyers of used EVs. Those shopping in the aftermarket will have a lot of questions to ask EV sellers. Rightfully so: How an EV is treated during its time in service—such as how it was driven and charged—has a significant impact on long-term battery health. It will therefore be imperative to understand the extent to which previous owners adhered to best practices for battery-life optimization.

So long as battery health remains a mystery, uncertainty will drag not only on the adoption of new EVs but also on the resale value of used EVs.

Would you buy a used electric vehicle if you didn't know the state of health of the battery?

The Promise of Real-World Data

Based on their experiences with their smartphones and laptops, most consumers expect batteries to degrade over time.

But developing an understanding of how quickly that will happen for an individual vehicle is not easy. Adding to the angst is that quotes for EV battery replacements range from $4,000 to more than $20,000, depending on the manufacturer, chemistry type and projections on battery costs in the future.

According to an assessment conducted by Motorq, a connected vehicle platform and J.D. Power collaborator, the rate of degradation can vary widely, even within the same EV make and model. Some individual vehicles hold up well, while others deteriorate more quickly than expected.

The same real-world battery data that powered this assessment could also be provided to buyers to help them make more informed purchasing decisions. Reducing uncertainty and giving consumers confidence in used EVs will boost resale values and, ultimately, accelerate the EV transition.

Shedding Light and Accountability on Battery Health

The EV battery lifecycle challenge is, in short, both complicated and dynamic. Industry leaders will be well-served acting sooner rather than later to provide the next generation of EV buyers with a clear view of the health of EV batteries. They should also ensure that consumers understand the steps that can be taken to minimize degradation and, in turn, protect the resale value of their vehicles, especially as the baton is passed from early adopter enthusiasts to mass market buyers.

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David Sargent is vice president and head of the connected vehicle practice at J.D. Power.

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