Kips Pharma subsidiary to sell finished products instead of materials from end-of-life batteries ... “enters ESS business”

[Financial News] A subsidiary of Kips Biopharma (Kips Pharma), Battery Solutions, is expanding its business model beyond its existing recycling business of extracting raw materials such as lithium from end-of-life batteries to selling finished energy storage systems (ESS). The move reflects its view that remanufacturing batteries with good remaining performance into ESS units can create more added value than crushing batteries to recover materials.
According to the company on the 14th, Battery Solutions, a subsidiary of Kips Pharma, is entering the lithium iron phosphate (LFP) battery reuse business. The plan is to select reusable batteries from those secured through its existing recycling business and supply them for small-scale ESS and charging-station ESS applications. The company plans to target Southeast Asian and Indian markets first.
The key to this business expansion is making use of existing facilities and recovered battery supply. Battery Solutions built a commercial LFP battery pretreatment facility last January with a capacity of 1 ton per hour, or 5,000 tons a year. In March this year, it also signed an annual-volume contract with a global electric vehicle manufacturer to recycle used batteries.
Whereas the company previously focused on crushing recovered batteries to extract raw materials, it will now divide them between reuse and recycling based on their remaining performance. Batteries in relatively good condition will be sold as ESS units, while the rest will be used to recover materials.
The key to commercializing the business, however, is safety certification. Reused batteries must undergo safety inspections under relevant laws. Battery Solutions is considering partnering with or acquiring a company specializing in performance certification and safety assessments. It is also leaving open the possibility that its entry into the new business could lead to mergers and acquisitions (M&A) involving related companies.
The outlook for growth in the related market is another factor behind the expansion. According to market research projections cited by the company, the global battery reuse market is expected to grow from $1.2 billion in 2024 to $4.7 billion in 2030. Actual profitability, however, is expected to vary depending on the share of reusable batteries the company can secure, safety inspection costs and ESS selling prices.
Battery Solutions CEO Kim Min-hong stressed, “We will expand into the battery reuse business as well, based on the supply we have secured in battery recycling.”
Industry observers, meanwhile, said the success or failure of the end-of-life battery reuse business would depend less on processing capacity alone than on how much supply of batteries with good remaining performance companies can secure reliably.
[email protected] Kim Gyeong-a Reporter