March 6, 2025: The global battery industry is reaching an inflection point and faces a myriad of urgent challenges if it is to power a new generation of electric vehicles and energy storage systems, according to new analysis.
According to Capgemini Research Institute’s report released on February 27, based on a survey of 750 senior executives from large battery, automotive and energy and utilities across North America, Europe and the Asia-Pacific region, more than 50% cited difficulties in securing a stable supply chain for battery components and materials as an impediment to scaling production.
The report — ‘The battery revolution: shaping tomorrow’s mobility and energy’ — focuses on lithium ion and other ‘new energy’ battery chemistries.
According to the report, 45% cited economic viability and profitability of battery production as one of the hurdles to expanding business.
Nearly 60% of battery manufacturers cited concerns over the time required to build gigafactories as a key challenge.
The scarcity of experienced talent also represents a significant challenge for the battery industry, with 60% of organizations saying they faced skills shortages in both battery technology and manufacturing.
Capgemini said its analysis included in-depth interviews with 22 industry leaders such as K V Ramakrishnan, the former director of plant operations (ICE, EV) at Great Wall Motor and General Motors, who warned variations in chemistry between manufacturers was leading to inconsistencies during assembly, while shelf-life constraints caused materials to degrade, contributing to waste.
He said: “Challenges such as temperature control during transportation further complicate matters, as demand fluctuations can affect battery performance and safety.
“Even after cells arrive in the host country, rejections during battery pack assembly, along with other repairs, contribute to a persistent 20%–30% supply gap, which, without digital tech adoption, could increase as demand rises.”
The report also quotes a LinkedIn post from Yann Vincent, CEO of the Automotive Cells Company, on the importance of gigafactory players keeping construction time under control.
To do so, Vincent said gigafactories must secure a fast ramp-up to avoid a “Death Valley” effect, with huge quantities of cash burned to produce cells and modules that will eventually be scrapped for being of insufficient quality.
Meanwhile, 60% of executives told the survey they were tackling skills shortages in battery R&D and manufacturing, including thermal management and power electronics.
Three-quarters of battery manufacturers said there was a need to upgrade or build new lines to support production of next-generation cells.
On sustainability, the report said batteries continue to have a significant environmental and social impact, with two-thirds of organizations still integrating sustainability practices.
By contrast, the report does acknowledge the success of the lead battery industry in achieving a near-100% recycling rate.
The report said the battery sector is being driven by the need for higher energy density, faster charging times, improved safety, greater sustainability, but also on the need for manufacturers to reduce costs.
Batteries are transforming existing industries, the report said, but solutions to overcome challenges highlighted by the survey include incubating efficient market platforms for growth with battery-friendly energy markets and battery marketplaces.
