Capgemini: Batteries Need Innovation and Diversification
A report from the Capgemini Research Institute, titled 'The Battery Revolution: Shaping Tomorrow's Mobility and Energy,' looks at the landscape of batteries and energy.
The battery industry is facing increasing demands to boost production capacity while simultaneously needing to evolve with next-generation technologies for electric vehicles (EVs) and energy storage systems.
Currently dominated by lithium-ion technology, which 98% of battery manufacturers produce, the report says innovation and diversification are needed.
"Innovation is driving a sustainable and competitive battery industry, with advancements in technologies and alternative chemistries improving performance and longevity," says Pierre Bagnon, Global Head of Intelligent Industry Accelerator at Capgemini.
The extensive time needed to establish and scale up battery factories, supply chain complications are causing issues, the report says.
Nearly 60% of manufacturers report time as a major impediment, while 53% are struggling with supply chain issues.
The impact on EV development
Batteries are the biggest expense for electric vehicles.
Capgemini’s research shows that vehicle manufacturers are exploring ways they can make their vehicles more accessible and inexpensive for consumers.
To tackle this, 64% of mobility firms are exploring innovative battery swapping solutions, allowing for easier battery exchanges in vehicles.
More than half are considering introducing Battery-as-a-Service (BaaS) models, enabling EV owners to lease batteries instead of purchasing them outright—a strategy that 69% of utility companies surveyed are either already implementing or planning to introduce.
These initiatives, however, face their own set of hurdles, including inadequate grid infrastructure, the necessity for diverse battery types for various storage durations and a lack of standardized performance metrics that complicate widespread adoption.
Bottlenecks for the battery industry
The path to future-proof battery production is full of economic and logistical challenges.
Around 76% of manufacturers say the need for either significant upgrades or completely new production lines to accommodate next-gen battery cells is significant.
The industry is experiencing a profound talent shortage, with 60% of companies finding it difficult to hire skilled workers proficient in battery technology and manufacturing.
The scarcity is not limited to technical roles, but extends to data scientists and manufacturing engineers who are crucial for optimising production processes.
A huge effort is underway to expand capacity across the world. In the UK, gigafactories in Sunderland and Coventry are opening, with plans for more to follow.
Wates Group, the construction company building the Sunderland gigafactory, believes in the sustainability of the project.
“This gigafactory represents the future of green automotive manufacturing not only in the North East, but nationally and like all our projects, we’re committed to building it sustainably and for the long-term benefit of the region,” says Director Sir James Wates.
Sustainability remains aspirational
Despite their integral role in decarbonisation, only a third of battery manufacturers have successfully integrated substantial circular economy measures into their operations according to Capgemini's report.
Digital transformation, which could enhance sustainability efforts, remains in early stages, with just 17% of battery manufacturers having achieved significant digitalisation.
The European Union's upcoming "battery passport" requirement — mandating detailed information on battery composition, material sourcing and carbon footprint for EVs sold within the EU from February 2027 — may accelerate adoption of digital tracking tools.
"Data and digital technologies can enhance the entire battery value chain, optimising lifecycle management from quality control to waste management and recycling," Pierre explains.
"Equally, collaboration within an innovation ecosystem that brings together all players and regulators is vital to continue the industry's journey towards a battery-driven sustainable future."
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