Managing Demand: Capgemini on Trends in the Battery Sector

The battery industry is at an inflection point.

A new report by the Capgemini Research Institute has revealed that the sector is struggling with contradicting demands.

On the one hand, demands to increase production capacity are soaring. On the other, demands to develop the next generation of EV & energy storage technologies.

Right now, the sector is being pulled in two separate directions, caught halfway between the present and the future.

Capgemini’s report, entitled The Battery Revolution: Shaping Tomorrow's Mobility and Energy, shows that while lithium-ion batteries currently dominate the market, the industry is actively exploring alternatives to support electric mobility and accelerate energy storage capabilities.

As of March 2025, around 98% of battery manufacturers produce lithium-ion batteries, so the need for diversification - and innovation - is clear.

"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.

While this statement is true, the path forward is nevertheless fraught with obstacles. 

Capgemini’s research finds that 59% of manufacturers cite the time required to build and scale battery factories (also known as gigafactories) as a major issue, whilst 53% cite the difficulty in securing a stable supply chain as a hurdle.

Batteries driving EV development

A battery is the most expensive component of an EV, as is the case with internal combustion engines in traditional automobiles.

Capgemini’s research shows that vehicle manufacturers are exploring ways they can make their vehicles more accessible and inexpensive for consumers.

Approximately 64% of mobility companies are looking into battery swapping (where batteries can easily be swapped in and out of a vehicle), while more than half are considering Battery-as-a-Service (BaaS) models that allow EV owners to lease rather than purchase batteries.

In the energy sector, 69% of utilities surveyed are already offering or are planning to offer BaaS solutions. 

However, implementation faces significant challenges, including inadequate grid infrastructure, the need for diverse battery types to facilitate different storage timeframes and a lack of standardised performance metrics.

Production and skills bottlenecks

Perhaps most critically, 76% of manufacturers report they will need to upgrade or build entirely new production lines to support future generations of battery cells — a capital-intensive requirement that raises questions about economic viability.

The talent shortage represents another significant barrier, with 60% of organisations struggling to find skilled workers in battery technology and manufacturing. 

This shortage extends beyond technical roles to data scientists and manufacturing engineers capable of 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 batteries' crucial role in decarbonisation efforts, only one-third of manufacturers surveyed have implemented meaningful circular economy measures. 

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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