Electric cars may be coming out in force come December, but the spotlight is now on how their batteries will be resold and recycled several years down the road.

There’s been a recent spate of announcements from Nissan, General Motors and Tesla on this topic. All three companies are looking for ways to reuse the batteries in their electric vehicles once they reach the end of their useful life within the car itself. This aptly-named second-life battery business could spawn a multitude of uses: a used Leaf battery could be a backup generators for hospitals, or a secondhand Volt battery (pictured below) could store excess energy generated by the grid or wind farm.

The key for automakers pursuing the second-life business, it seems, will be partnerships. GM said it will collaborate with global electrics giant ABB to develop second-life uses for the Chevrolet Volt battery. Solar services company SolarCity announced yesterday it will team with Tesla to research ways to store solar power using Tesla car batteries, which will be financed by a $1.7 million grant. And Nissan announced last week it has formed a joint venture company with Japanese conglomerate Sumitomo called 4R Energy that will research second-life uses for the Nissan Leaf battery.

Lithium-ion battery pack for 2011 Chevrolet Volt

Lithium-ion battery pack for 2011 Chevrolet Volt

Why all the focus on recycling electric car batteries? It boils down to cost. Batteries continue to be expensive and constitute a major obstacle for electric vehicle (EV) makers. At $800 to $1,000 per kilowatt-hour — or $8,000 to $18,000 apiece — batteries can comprise up to one-third of the overall cost of the car.

“It’s … absolutely necessary for the EV market to be successful at current battery prices,” says John Gartner, analyst for Pike Research. “Finding ways to lower that (battery) cost by getting some of the end-of-life value out of them would be key for the automakers going forward.”

After a battery starts to deplete – say, after eight to ten years into use – it will significantly reduce the range of an electric car, requiring it to be replaced. (The Chevrolet Volt, Nissan Leaf and Coda sedan all guarantee their batteries up to eight years or 100,000 miles of use.) But that used battery can still have 50 to 70 percent of its useful life remaining. Customers could potentially use the sale of a used battery to defray the cost of a new one. If that proves to be the case, then EV-makers have a selling point to counter consumer fears about the cost of replacing batteries.

GM Battery Lab, Warren Technical Center

GM Battery Lab, Warren Technical Center

These recycled car batteries have a myriad of potential uses. The Nissan press release refers vaguely to “energy-storage solutions,” but GM outlined four major areas of interest: storage for renewable energy, back-up power supply, grid load management (where utilities can store electricity generated during off-peak periods, then draw from it to supplement peak-time demand), and what’s called “time of use management,” in which industrial companies could store off-peak, cheaper electricity and then draw from it during peak hours, cutting overall electricity costs.

Here’s one other option rarely mentioned by automakers: Batteries can also be used to store energy while in the car itself. What’s called “vehicle-to-grid” applications might make the most sense for fleets of all-electric delivery trucks or taxis, Gartner said. When plugged in, energy stored in an EV could be sold back to the grid, potentially netting the owner extra cash. One trial that’s looking at how vehicle-to-grid would affect a car’s durability and safety is taking place at the University of Delaware.

There’s also one way all this focus on recycling batteries could backfire. If battery prices drop significantly in the next few years, then a used EV battery may not be worth much. Pike Research is forecasting that battery prices could drop by half by 2015, and  Deutsche Bank more conservatively forecasts the same price cut by 2020. If battery prices do drop dramatically, then it’s unlikely there will be much residual value for electric car owners.

This story, written by Iris Kuo, was originally posted on VentureBeat's GreenBeat, an editorial partner of GreenCarReports.