After Rivian Investment, Cox Wants To Learn How To Value Used Batteries | WGLT

After Rivian Investment, Cox Wants To Learn How To Value Used Batteries

Dec 2, 2019

An auto services company hopes its $350 million investment in Rivian will help it better understand the value of used batteries after they’re pulled out of electric vehicles.

The deal, announced in September, was Cox Automotive’s first equity investment in an automaker. Cox is perhaps best known for its automotive brands, including Autotrader, Kelley Blue Book, Pivet, RideKleen and Manheim, which transports, services, and auctions vehicles.

In an interview with WGLT’s Sound Ideas, Cox Mobility Group President Joe George said the Rivian investment is all about “knowledge transfer around battery systems.” He said Cox wants to develop a better way to set a price for a used battery. At the end of a Rivian vehicle’s life, for example, around 75% to 80% of the battery’s usable capacity for storage will remain, Rivian founder and CEO RJ Scaringe said in June.

“To do that, you have to have a pretty good understanding of the charge/discharge histories of the batteries,” George said. “Part of working with the Rivian team is to learn about how these battery packs wear over time, so we can do a good job informing the aftermarket and ultimately consumers about the health of the battery and the corresponding value.”

Rivian previously announced a separate partnership that will re-use old Rivian batteries for solar energy storage in Puerto Rico. Rivian plans to build “hundreds” of test and development vehicles in the next few years that can’t be sold, Scaringe said. Starting in 2020, batteries from those vehicles will be removed and use for a solar microgrid initiative in Adjuntas, Puerto Rico, a city of 20,000 that was hard-hit by Hurricane Maria in 2017.

Cox's Manheim brand provides fleet services, from in-fleeting and de-fleeting to reconditioning, logistics and beyond.
Credit Cox Automotive

“We don’t want them going in the landfills,” George said. “So we’re really aggressively looking at different ways to make sure that doesn’t happen.”

But there are challenges. The cost of new battery cells is coming down as more demand and capacity is developed, making it tougher for used batteries to compete, George said.

But Cox thinks it’s just a matter of time before “there will be enough supply where we’ll be able to develop things like home storage of energy and fleet depot-type microgrids to help with regenerating and balancing out how power is pulled off of the grid, so you can pull power off at times when it’s optimal, and then push the power out of the battery-storage systems into the vehicles themselves.”

“It’s just really early, but there are a lot of great opportunities there,” George said.

Rivian will make its vehicles and batteries at its Normal manufacturing plant, where it already has 190 employees and could have 1,000 by 2024. Rivian has also attracted large investments from Amazon and Ford.

Cox had formed partnerships but never made an equity investment with an automaker before Rivian. Cox, which touts its Cox Conserves sustainability initiative, liked that Rivian was an all-electric manufacturer, George said. The company also found Rivian’s pliable skateboard platform, on which many different vehicles can be built, “very compelling,” George said.

Cox is expected to support Rivian’s partnership with Amazon, which recently announced an order of 100,000 electric delivery vans, George said. Cox will help prepare the vehicles for handoff to Amazon—a process called “in-fleeting” which Cox offers through its Manheim business, George said.

Cox is expecting to see “rapid adoption” of EVs in the commercial fleet sector, George said, due in part to lower costs of operating an all-electric fleet and ongoing corporate sustainability efforts. The question with fleets, George said, is how are you going to charge them all? What are the grid implications so that you’ve got the right amount of energy capacity around those charging depots? 

“We think the future of how we get from Point A to Point B for goods and package delivery is along the lines of what Amazon is contemplating doing,” he added.

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