When you buy an electric car, who should own the battery? It sounds like a small question, but the answer shapes what happens to that battery for the next twenty years. In September, CIRCUBATT coordinator Prof Li Zhou and her PhD student Phuc Huu Nam Nguyen took this question to Sheffield. There, they explored when EV battery leasing beats selling, and why a mix of both might work best.
They presented their paper at the 4th Operations and Supply Chain Management Symposium, hosted by the University of Sheffield Management School on 1 and 2 September 2026. The symposium focused on emerging technologies and Industry 5.0. In other words, it focused on how supply chains can become smarter, more sustainable and more human centred.
Why the battery decides the business model
The battery is one of the most expensive parts of an electric car. It also keeps much of its value after the car no longer needs it. A battery that can’t give a driver enough range may still have plenty of capacity for a less demanding job.
That leftover value is the reason business models matter. If nobody tracks the battery or brings it back, its value is lost. If someone does, it can power a building, support the electricity grid or, eventually, return its materials through recycling.
Selling versus EV battery leasing
There are two classic ways to put a battery on the road. In the first, the customer buys the car and the battery together and owns both. As a result, the manufacturer may never see that battery again, and its second life depends on whether it finds its way back.
With EV battery leasing, the customer pays to use the battery instead of owning it. The manufacturer, or a partner, keeps ownership. Therefore, when the lease ends, the battery returns to someone who knows its history and has a reason to give it a second life.
Each model has a trade off. Buying outright can feel simpler and gives customers full control. Leasing lowers the upfront price of the car, but it asks customers to accept an ongoing contract. This is why a third option has started to attract attention: a hybrid model where the manufacturer offers both and lets each customer choose.
What echelon utilisation means
The Sheffield paper looked at hybrid selling and leasing in a closed loop supply chain with echelon utilisation. Both terms sound technical, but the ideas are simple.
A closed loop supply chain is one where products come back after use. Instead of ending as waste, they return to be repaired, reused or recycled. Echelon utilisation describes the steps a battery takes on the way down. It starts in a demanding job, like powering a car. Then it moves to a lighter one, such as storing solar energy. Only at the very end is it recycled.
The hybrid question is harder than it looks. Selling and leasing attract different customers, and they bring batteries back at different rates. Consequently, the manufacturer has to price both options carefully so that the whole loop, from first sale to second life, still pays off.
What earlier research by Prof Zhou suggests
Prof Zhou has studied these trade offs before. In a 2026 paper in the Asia Pacific Journal of Operational Research, she and her co-authors compared direct selling and battery leasing. They also looked at how AI supported sorting affects second life batteries.
Their findings help explain why there is no single right answer. Under direct selling, the sale of new cars and the return of old batteries run as separate channels. Under leasing, the two channels are linked, so the value left in a used battery can lower the cost for the next customer.
Interestingly, which model earns more depends on customer behaviour. Leasing tends to win when the amount of batteries returned barely reacts to the price paid for them. Selling tends to win when that reaction is strong. Meanwhile, the decision to invest in second life use and AI sorting depends on the reuse value and the cost of the AI, not on the business model.
Why EV battery leasing matters for Europe
These questions are no longer only academic. Since August 2025, the EU Batteries Regulation has required battery producers to take back waste batteries and finance their collection, treatment and recycling. In practice, producers carry responsibility for batteries long after they leave the factory.
Business models that keep track of each battery make that responsibility easier to manage. They also make second life more realistic, because they deliver used batteries to people who can test and reuse them. This is one reason CIRCUBATT studies service based models, which we explain in our plain language guide to Battery as a Service. Our End of Life BaaS Business Model Handbook goes into more detail.
More from the University of Greenwich this autumn
The Sheffield symposium was one of several moments this autumn when the University of Greenwich team shared CIRCUBATT’s work. At the end of September, Prof Zhou also joined a seminar organised by BATT-BRIDGE, the Horizon Europe initiative that connects battery research, industry and policy across Europe.
Choosing between selling and leasing may sound like a pricing decision. In reality, it decides whether a battery’s second life ever happens. Want to know more about how CIRCUBATT works? Visit our frequently asked questions.