Battery technology is poised at a pivotal moment within the energy industry as it faces numerous challenges that could significantly impact its development and sustainability. According to a recent report by the Capgemini Research Institute, titled “The battery revolution: Shaping tomorrow’s mobility and energy“, the industry is grappling with the need for sustainable raw materials, optimised manufacturing processes, and enhanced recycling capabilities.
The report highlights that battery manufacturers, while predominantly focused on lithium-ion technology, are exploring alternative chemistries, particularly solid-state batteries. These batteries employ solid electrolytes and promise superior performance, exhibiting higher energy densities, faster charging times, and enhanced safety compared to conventional lithium-ion batteries. The industry anticipates these innovations will be vital for electric vehicles (EVs) as well as for renewable energy storage solutions.
Pierre Bagnon, Global Head of Intelligent Industry Accelerator at Capgemini, remarked, “Innovation is driving a sustainable and competitive battery industry, with advancements in technologies and alternative chemistries improving performance and longevity. At this transformative time, while European and North American manufacturers are navigating production ramp-ups and exploring the next generation of batteries, a solid and scalable digital foundation will be crucial for the industry’s future.” He noted that digital technologies could significantly enhance the entire battery value chain, promoting efficiency from quality control through to recycling.
Furthermore, the survey identified new business models emerging in the mobility sector. Approximately 64% of surveyed organisations in the mobility industry are considering battery swapping, while nearly two-thirds are exploring battery leasing options. Additionally, over 50% of responding organisations are assessing the feasibility of Battery-as-a-Service (BaaS) models, which allow consumers to lease rather than purchase batteries. However, realising the potential of these models is contingent upon the establishment of industry standards, improvements in battery longevity, and the development of infrastructure capable of supporting mass adoption.
The energy sector mirrors this innovation, with 40% of organisations integrating batteries into renewable energy systems to enhance energy storage. While interest in BaaS solutions is growing—69% of organisations currently offering or planning to offer such solutions—several challenges loom large. The high cost of batteries compared to the low price of stored electricity, as well as infrastructural limitations and the need for various battery types to address diverse storage requirements, are potential hurdles to widespread implementation.
Beyond the automotive and energy sectors, battery technology is expected to disrupt other industries, with three in five respondents indicating that battery innovation will transform fleet operations and heavy transportation in the next five to ten years. The aviation and shipping industries are also exploring battery solutions, including electric ships and eVTOLs (Electric Vertical Take-off and Landing) to enhance sustainability.
Despite the momentum, manufacturers face significant obstacles in ramping up production. The survey revealed that 59% of battery manufacturers are hindered by the time required to construct gigafactories, while 53% cite difficulties in securing consistent supply chains for essential materials and components. Economic viability remains a paramount concern, and many manufacturers struggle with a shortage of skilled professionals in battery technology and manufacturing, as indicated by 60% of organisations reporting skills gaps.
Only one-third of surveyed manufacturers have made substantial progress in establishing sustainable circular economies within the industry, despite recognition by 67% of respondents that data and digital solutions will be critical for future advancements. However, the current rate of digitalisation among these manufacturers is low, with just 17% demonstrating effective data utilisation in sustainability contexts.
In Europe, efforts are underway to create a Digital ‘battery passport’. This initiative aims to uphold heightened environmental standards throughout the lifecycle of battery production and recycling, thereby equipping suppliers and original equipment manufacturers (OEMs) to make informed decisions regarding sustainable practices.
As the battery industry aims to meet growing demands while simultaneously addressing economic and environmental concerns, the outcomes of these initiatives and innovations could play a crucial role in shaping a sustainable energy future.
