Early Business Models for Multi-Life Traction Batteries: Value Creation in the Emerging Circular Automotive Industry

Abstract:

The transition towards a circular economy in the automotive industry unfolds against mounting concerns about the sufficiency of critical raw materials for electric vehicles, exposed vulnerabilities in global EV battery value chains, and progressively stricter climate and circularity regulations governing vehicle life cycles (ICCT, 2024, IEA, 2025). Traction batteries in battery electric vehicles (BEVs) are a central locus of these tensions, as they concentrate critical raw materials, account for a substantial share of life‑cycle greenhouse‑gas emissions, and strongly influence cost and performance trajectories of electrification strategies (European Parliament and Council of the European Union, 2023). While circular economy policy and research frequently stress recycling and closed‑loop supply chains as key responses, recent work highlights the need to complement these with strategies that extend product use‑phases through repair, reuse, second life and remanufacturing before material recovery (Bocken et al., 2017, Kirchherr et al., 2017, Scholtysik et al., 2023).

Our Research investigates early business models for multi‑life traction batteries that enable profitable sequential redeployment across automotive, stationary storage and lower‑demand industrial applications (Mestre and Cooper, 2017, Jeppe et al., 2023, Chirumalla et al., 2023). It asks: Which business model design themes and antecedents characterise viable early business models for multi‑life traction batteries in the European automotive industry? The analysis is situated in the European context, where strong dependence on Asian cell manufacturing, ambitious decarbonisation targets and the new EU Batteries Regulation jointly create powerful levers and obstacles for circular business model innovation in battery value chains (Baars et al., 2020, European Parliament and Council of the European Union, 2023, JRC, 2023).

Theoretically, our research builds on Amit and Zott's framework of early business models, which distinguishes the strategic „early" configuration (business model design themes: novelty, efficiency, lock‑in, complementarities; design antecedents: goals, templates, stakeholder activities, environmental constraints) from operational instantiations (Amit and Zott, 2001, Zott and Amit, 2010, Amit and Zott, 2015). This framework is integrated with emerging work on multi‑life products and second‑life EV battery systems, which conceptualise products explicitly designed for sequential use‑phases beyond single‑lifecycle optimisation and emphasise new product‑service and ecosystem logics (Mestre and Cooper, 2017, Jeppe et al., 2023, Gohla-Neudecker et al., 2015, Hellström and Wrålsen, 2024). Our Research seeks to identify the content of viable early business models for multi‑life traction batteries – specifically, which combinations of business model design themes and antecedents enable value creation and appropriation under current European conditions (Baden-Fuller and Morgan, 2010, Baars et al., 2020, Jeppe et al., 2023).

Empirically, the study analyses the content of early business models through a systematic literature synthesis of circular and product‑service business models, multi‑life batteries and European battery value chain challenges, a scenario‑based potential analysis of BEV fleet growth and battery retirement volumes and an in‑depth case study of how incumbent firms conceptualise multi‑life solutions, revealing specific business model design themes, stakeholder activity allocations and environmental constraints as key determinants.

Building on these foundations, the research derives the content of early multi‑life business models for traction batteries, specifying business model design themes (e.g. novelty through cascading orchestration, lock‑in via residual value guarantees, complementarities across sequential use cases) and design antecedents (e.g. stakeholder activity reallocation among OEMs, battery suppliers, energy firms; template adaptations from leasing to platform models) that enable value creation in the emerging circular automotive industry (Hellström and Wrålsen, 2024, Amit and Zott, 2021, Toorajipour et al., 2024)

The expected contribution to the Gerpisa colloquium is to advance strategic management research on early business models by specifying how Amit and Zott's business model design themes and antecedents manifest in the finite‑resource context of European battery value chains, providing empirical evidence on the content of viable multi‑life configurations that address both circularity imperatives and economic viability.