A new factory will boost the U.S. capacity to repurpose old electric vehicle batteries into long-term energy storage. This week the Department of Energy announced a $20 million grant to partially finance this new manufacturing facility in Texas. It’s part of an emerging EV battery reuse ecosystem that will give batteries a second life.

The factory in Taylor, Texas, will be run by Moment Energy. CEO Edward Chiang said old batteries will be used for less stressful kinds of energy storage. 

“Like powering commercial buildings, EV chargers and whatnot,” he said.

And eventually, backup power at utility scale: “Any natural disasters and the grid breaks down, well, then you can discharge the energy back into the grid to recharge it,” Chiang said.

Repurposing is vital from an environmental perspective, said Jessica Dunn, a senior analyst with the Union of Concerned Scientists’ clean transportation program.

“Even if a battery is at like 70%, 80%, even lower-percent capacity, it’s basically more environmentally friendly to to repurpose that battery, instead of sending it directly to recycling,” she said.

But these are early days and there are many hurdles to overcome before 2030, when we’re expected to see much bigger waves of retired EV batteries come through.