economies of scale

2 Articles

The Quest To Find A Second Life For Electric Vehicle Batteries

February 1, 2020 by 49 Comments

Rechargeable lithium chemistry battery cells found their mass market foothold in the field of personal electronics. The technology has since matured enough to be scaled up (in both physical size and production volume) to electric cars, making long range EVs far more economical than what was possible using earlier batteries. Would the new economics also make battery reuse a profitable business? Eric Lundgren is one of those willing to make a run at it, and [Gizmodo] took a look at his latest venture.

This man is a serial entrepreneur, though his previous business idea was not successful as it involved “reusing” trademarks that were not his to use. Fortunately this new business BigBattery appears to be on far more solid legal footing, disassembling battery packs from retired electric vehicles and repacking cells for other purposes. Typically EV batteries are deemed “worn out” when their capacity drops below a certain percentage (70% is a common bar) but that reduced capacity could still be useful outside of an EV. And when battery packs are retired due to problems elsewhere in the car, or just suffering from a few bad cells, it’s possible to extract units in far better shape.

We’ve been interested in how to make the best use of rechargeable lithium batteries. Ranging from tech notes helping battery reuse, to a comparison of different types, to looking at how their end-of-life recycling will be different from lead-acid batteries. Not to mention countless project wins and fails in between. A recurring theme is the volatility of mistreated or misbehaving batteries. Seeing a number of EV battery packs stacked on pallets and shelves, presumably filled with cells of undetermined quality, fills us with unease. Like the rest of California, Chatsworth is under earthquake risk, and the town was uncomfortably close to some wildfires in 2019. Eric is quick to give assurance that employees are given regular safety training and the facility conforms to all applicable workplace safety rules. But did those rules consider warehouses packed full of high capacity lithium battery cells of unknown quality? We expect that, like the business itself, standards for safety will evolve.

Concerns on safety aside, a successful business here would mean electric vehicles have indeed given battery reuse a profitable economy of scale that tiny little cell phone and laptop batteries could not reach. We are optimistic that Eric and other like-minded people pursuing similar goals can evolve this concept into a bright spot in our otherwise woeful state of e-waste handling.

The Long Tail Of DIY Electronics

May 15, 2017 by 40 Comments

These are the Golden Years of electronics hacking. The home DIY hacker can get their hands on virtually any part that he or she could desire, and for not much money. Two economic factors underlie this Garden of Electronic Eden that we’re living in. Economies of scale make the parts cheap: when a factory turns out the same MEMS accelerometer chip for hundreds of millions of cell phones, their setup and other fixed costs are spread across all of these chips, and a $40 million factory ends up only costing $0.50 per unit sold.

But the unsung hero of the present DIY paradise is how so many different parts are available, and from so many different suppliers, many of them on the other side of the globe. “The Internet” you say, as if that explains it. Well, that’s not wrong, but it’s deeper than that. The reason that we have so much to choose from is that the marginal cost of variety has fallen, and with that many niche products and firms have become profitable where before they weren’t.

So let’s take a few minutes to sing the praises of the most important, and sometimes overlooked, facet of the DIY economy over the last twenty years: the falling marginal cost of variety.

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