There is an incremental trend in lithium-ion batteries (LIBs) demand due to more demand for electric vehicles (EVs) in the next decade. Although electric vehicle EV batteries’ capacity reduces at their end-of-life (EOL) in vehicles, they are still valuable for other applications. Considering the high demand for the LIBs raw material and limitations for supplying the natural resources, the second life application of the EV batteries is realized as an environmentally sustainable solution. Therefore, reusing EV batteries in the energy sector system (ESS) is an attractive alternative that creates economic and environmental values throughout the product life cycle. Circular business model (CBM) and circular economy (CE) strategies are promising solutions for pursuing EV batteries’ second-life application. However, there are technical challenges in recycling EV batteries due to different designs and the percentage of material components. This study investigates how critical elements in the business model influence the EV battery value chain and how to improve the system’s circularity through a circular business model innovation (CBMI). This thesis also aims to recognize feasible CBM for the second-life application of EV batteries and its potential barriers. This study also tries to employ appropriate CE strategies to deal with the existing challenges regarding uncertainties.