This article provides a comprehensive overview of the potential challenges and solutions of second-life batteries. First, safety issues of second-life batteries are investigated, which is highly related to the thermal runaway of battery systems. The critical solutions for the thermal runaway problem are discussed, including structural optimization, parameter identification, advanced BMS, and artificial intelligence (AI)-based control strategies. Furthermore, the cell inhomogeneity problem of second-life battery systems is analyzed, where the passive balancing strategy and active balancing strategy are reviewed, respectively. Then, the compatibility issue of second-life batteries is investigated to determine whether electrical dynamic characteristics of a second-life battery can meet the performance requirements for energy storage. In addition, date security and protection methods are reviewed, including digital passport, smart meters and Internet of Things (IoT). The future trends and solutions of key challenges for second-life battery utilization are discussed.