Capgemini: Will Battery Manufacturers Meet Renewable Demand?
The battery industry finds itself at a critical junction.
A study by Capgemini Research Institute exposes the sector grappling with conflicting demands — boosting production capacity while also pushing forward on the next wave of EV and energy storage technology.
Currently, the situation in the battery sector reflects a tug-of-war between the existing demands and the aspirations for the future.
The report, titled he Battery Revolution: Shaping Tomorrow's Mobility and Energy, says lithium-ion batteries hold the lion's share of the market.
Nevertheless, with about 98% of battery producers engaged in manufacturing lithium-ion products, the pressure to diversify and innovate is undeniable.
Appealing alternatives are being explored to propel electric mobility and boost energy storage solutions.
"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.
Fifty-nine per cent of manufacturers identify the time-intensive nature of erecting and expanding battery factories, also known as gigafactories, as a substantial challenge.
Moreover, 53% point to difficulties in securing a stable supply chain. These obstacles underscore the complex dynamics manufacturers must navigate in this burgeoning sector.
Batteries driving EV development
In the realm of electric vehicles (EVs), batteries emerge as a pivotal and costly component.
Capgemini's deep dive into the industry reveals that automakers are exploring methods to make their products more affordable and accessible.
Strategies such as battery swapping — where batteries can readily be exchanged in vehicles — and Battery-as-a-Service (BaaS) models, where consumers lease rather than own the batteries, are gaining traction.
In fact, 64% of mobility firms are examining battery swapping possibilities, while 69% of energy utilities are implementing or planning to offer BaaS solutions.
Yet, introducing these innovations is not without its hurdles.
Challenges like insufficient grid infrastructure, the need for varied battery types to cater to different storage durations and the absence of standardised performance metrics all pose significant barriers to adoption.
Production and skills bottlenecks
A striking 76% of manufacturers report that upgrading existing production lines or constructing new ones is necessary to cater to future generations of battery cells — a process requiring substantial capital investment, raising questions about its economic feasibility.
Additionally, a talent crunch looms large, with 60% of organisations struggling to find adequately skilled personnel in battery technology and manufacturing.
This shortage extends beyond technical roles to include data scientists and manufacturing engineers critical in optimising production operations.
In an effort to ramp up capacity, significant initiatives are underway globally.
For instance, in the UK, new gigafactories are opening in Sunderland and Coventry, with more planned.
“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 the critical role of batteries in decarbonisation efforts, only a third of manufacturers have instituted meaningful measures toward a circular economy.
The sector's digital transformation, crucial for enhancing sustainability, is still in its infancy with just 17% of battery manufacturers achieving significant digitalisation.
The upcoming European Union's 'battery passport' requirement, which mandates detailed disclosures on battery composition, material sourcing and carbon footprint for all EVs sold within the EU starting February 2027, could spur widespread adoption of digital tracking tools, according to industry insiders.
Data and digital technologies hold the potential to revolutionize the battery value chain by optimizing lifecycle management from quality control through to waste management and recycling.
"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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