Critical Crossroads in the Battery Sector, a Recent Study Highlights

As of March 6, 2025, an inflection point looms over the global battery industry. The integral role that batteries play in the upcoming wave of electric vehicles and energy storage systems has placed the industry under mounting pressure and challenges, drived by findings from a recent report.

A report published by the Capgemini Research Institute on February 27 divulged insights gleaned from a comprehensive panel of 750 high-profile executives. These stakeholders, originating from the battery, automotive, and energy sectors across North America, Europe and the Asia-Pacific region, shared their obstacles to scaling up production. A notable impediment disclosed by more than half of the executives is a consistent supply chain for essential battery elements and materials.

The investigative piece, titled "Powering the Future: Lithium Ion and Beyond", zeroes in on advanced battery chemistry such as Lithium Ion.

The report indicates that 45% of the surveyed executives see the financial feasibility and profitability aspects of battery manufacturing as a deterrent to their business expansions.

In addition, approaching 60% of the manufacturers expressed unease over the lengthy construction times of gigafactories.

Talent scarcity in the industry underlines another crucial concern, with a large 60% of the respondents declaring they face expertise gaps in battery technology and manufacturing.

The Capgemini report incorporates in-depth dialogue with 22 industry titans, including K V Ramakrishnan, the ex Director of Plant Operations (ICE, EV) at Great Wall Motor and General Motors. Ramakrishnan pointed out the variability in battery chemistry across manufacturers, which led to inconsistent product assembly and material degradation due to shelf-life constraints.

Ramakrishnan shares, "Transporting batteries adds another layer of complexity due to strict temperature control requirements. Demand fluctuations can implicate the performance and safety of the batteries. Despite these hurdles, a stubborn supply gap of 20%-30% persists, which may widen without the embrace of digital technology."

Yann Vincent, the CEO of the Automotive Cells Company, underscored the urgency to streamline gigafactory construction time in a LinkedIn post cited in the report.

In Vincent's view, the gigafactories ought to achieve quick scaling to avoid a fiscal crisis, commonly known as the “Death Valley” effect, which involves considerable cash bleeding in the production of eventually discarded subpar cells and modules.

Notably, 60% of the interviewed executives are battling talent shortfalls in areas of battery R&D and manufacturing, which include thermal management and power electronics.

It emerged that 75% of the battery manufacturers urged the necessity for revamping or setting up novel production lines to accommodate next-generation battery cells.

Touching on sustainability, the study flags the considerably impactful environmental and social footprint of batteries. However, a glimmer of optimism lies in the lead battery industry successfully achieving a nearly 100% recycling rate, as recognized by the report.

Overall, the report asserts that the primary drivers of the battery sector are higher energy density, safer and quicker charging times, enhanced sustainability, and cost reductions.

The transformative potential of batteries on traditional industries is also underlined, and the report advocates for solutions like establishing efficient market platforms for growth, focusing on both encouraging battery-friendly energy markets and fostering battery marketplaces to surpassed extant challenges.