The circular economy is coming to electric vehicles for both environmental and financial reasons, as a leading Japanese automaker plans on starting a rental scheme for its battery-powered cars.
Drivers interested in making the switch to electric will soon have another option to do so in Japan, as Nissan—manufacturer of the Nissan Leaf, one of the earliest and best-selling electric cars on the market—is preparing to launch a new rental plan for its EVs, the FT reports.
How will it work?
Nissan’s initiatives will operate as a subscription scheme.
Customers will sign up on a monthly basis, but Nissan hopes that they will rent electric cars for years before returning them, according to the FT.
The service will be exclusively available to Japanese customers.
Why are they doing this?
The initiative will make it easier for Nissan to keep their electric cars inside the country, where their batteries can be reused.
Keeping more of the valuable and recyclable batteries within arm’s reach could prove to be a financial boon for Nissan, as all electric car manufacturers continue to run into rising costs for electric car batteries that are projected to only go higher over the next decade due to a growing shortage of the critical metals used to power them.
The precious metals used to manufacture EV batteries — mainly cobalt, lithium, and nickel — are in increasingly short supply, largely due to extractive processes failing to keep up with the demand for the key elements.
FT reported that thousands of Lead batteries had already been returned to Nissan dealerships in Japan.
Reusing electric car batteries can be an effective cost-cutting measure for manufacturers, with one study finding that spent Nissan Leaf batteries can retain as much as 80% of their initial energy storage capacity, and can be reused in energy grids and utility storage systems.
Recycling EV batteries
In addition to reusing batteries, Nissan is also planning on how to recycle the metals used to power them and repurpose them for new cars, according to the FT.
Recycling the metal within EV batteries is a complex process and still very much in its infancy. The process consists of repurposing the rare-earth metals used in battery manufacturing.
Recycling these metals requires either shredding and burning used batteries or dissolving them in acid before extracting the metal.
The process is costly, and remains relatively inefficient, as melting the metals is energy-intensive and acid baths can corrode and damage metals before they can be recycled.
But despite the inefficiencies, experts mostly agree that recycling batteries and the metals within them at scale will be necessary to handle the booming demand for electric vehicles over the next decade.
Japan’s place in the car-making world
Japan is one of the largest car-making countries in the world, and has recently focused on expanding its EV manufacturing capacity, but the large volume has so far been mostly destined for other countries.
Japan is the second-largest car exporter in the world, and cars and car products are the largest source of exports in the country.
Sign up for the Fortune Features email list so you don’t miss our biggest features, exclusive interviews, and investigations.
Image and article originally from fortune.com. Read the original article here.