From Pathways to Portfolios: A Multi-Criteria Investment Approach to Circular EV Battery Innovation

This study develops an investment portfolio of circular innovation projects in the electric vehicle battery sector within the context of the sustainable transformation of the automotive industry. The central research problem concerns the allocation of limited investment resources across alternative circular pathways while simultaneously accounting for economic performance, investment risk, and social and environmental effects. The theoretical and methodological foundation of the study was established through a structured literature search organized in accordance with the PRISMA 2020 framework. A total of 5110 records published between 2010 and 2026 were identified in Scopus; following deduplication and thematic screening, 656 publications were retained for subsequent systematization. Based on the literature analysis, five classes of circular innovation projects were identified: battery diagnostics and lifetime extension; repair, refurbishment, and remanufacturing; reuse and second-life applications; collection, disassembly, and reverse logistics; and recycling and material recovery. A multi-criteria portfolio model was developed to evaluate these alternatives jointly, incorporating economic performance, investment risk, social effects, and environmental effects. The scenario-based application showed that the individual optima for the respective criteria do not coincide. The economically preferred combination includes lifetime extension, remanufacturing, and recycling, whereas the compromise solution consists of second life, reverse logistics, and recycling/material recovery. Sensitivity analysis showed that second life and recycling/material recovery remain part of the compromise portfolios under changes in the assumed investment constraint. The findings support a shift from selecting a single circular pathway toward forming a portfolio of complementary innovation directions, enabling the alignment of economic, social, and environmental sustainability priorities and creating conditions for the sustainable innovative development of automotive enterprises.