Lithium-ion batteries (LIBs) are vital for decarbonisation, particularly in electric vehicles (EVs) and battery energy storage systems (BESS). Repurposing LIBs after EV use for less demanding applications like BESS can reduce environmental impacts but faces technical challenges, such as damaged module casings and the need to replace the battery management system (BMS). This study evaluates how early-stage design choices affect second-life applications through a life cycle assessment. Results show that reusing both the BMS and module casing yields the lowest environmental impacts, highlighting the importance of "circular by design" approaches.