Battery technology sits at the heart of the global transition to a low-carbon economy. As industries pivot toward electrification and renewable energy adoption accelerates, the demand for efficient, scalable, and sustainable energy storage solutions has never been greater. From electric vehicles and grid infrastructure to consumer electronics and industrial applications, batteries are enabling innovation across sectors. 

The sector is evolving rapidly, with lithium-ion batteries leading the market across electric vehicles, consumer devices, and energy storage. Chemistries like NMC and LFP offer different strengths in energy density, cost, and safety. Meanwhile, next-generation solutions - such as solid-state and sodium-ion batteries - are in development, aiming to improve performance and scalability. The sector presents strong growth potential, alongside technical and supply chain challenges investors must carefully evaluate.

Strategic importance of battery technology

Battery technology is crucial in the global push to cut carbon emissions and combat climate change. Batteries power electric vehicles (EVs), significantly reducing pollution from cars and trucks. In 2024, global battery demand for EVs and storage reached nearly 1 terawatt-hour (TWh), with EV batteries alone increasing by over 25% year-on-year to 950 gigawatt-hours (GWh). Electric cars accounted for more than 85% of this demand, with China leading at 59%. Batteries also store energy from renewables like wind and solar, ensuring a stable power supply despite weather fluctuations. The grid-scale battery storage market was valued at $10.7 billion in 2024 and is projected to grow 27% annually through 2030.

Market landscape & growth drivers 

1. Electric vehicles (EVs)

2. Grid-scale energy storage

3. Consumer electronics

4. Lead-acid batteries

The EV battery market is experiencing exponential growth, rising from $87.8 billion in 2025 to $197.3 billion by 2029. This upside is driven by the rapid global adoption of electric cars, government incentives, and stricter emissions regulations. Lithium-ion batteries dominate, but solid-state batteries are gaining traction for their potential to reduce charging times by up to 80% in 15 minutes and enhance safety and energy density.

Grid-scale battery storage is expanding rapidly, growing from $7.5 billion in 2024 to $9.9 billion in 2025, with expectations to hit $29.1 billion by 2029 - fueled by the integration of renewable energy sources, the need for grid stability, and decarbonization policies. Lithium-ion remains the leading technology, but alternatives like sodium-based, flow, and solid-state batteries are emerging, alongside a focus on long-duration storage and virtual power plants.

The consumer electronics battery market is valued at $50 billion in 2025 and is projected to triple by 2033. Growth is propelled by the proliferation of smartphones, laptops, wearables, and other portable devices, with demand for higher energy density, faster charging, and improved safety. Lithium-ion phosphate (LFP) and lithium-cobalt oxide chemistries are prevalent, with Asia-Pacific—especially China and South Korea—leading manufacturing and consumption.

Despite competition from newer chemistries, the lead-acid battery market remains robust at over $50 billion in 2025. These batteries are essential for automotive applications, backup power systems, industrial equipment, and renewable energy storage, maintaining relevance due to their cost-effectiveness, reliability, and adaptability

Key private players 

• Form Energy builds iron-air batteries that can store energy for up to 100 hours—far longer than typical lithium-ion solutions—making renewables more reliable for utilities. The company has raised over $1.6 billion (Breakthrough Energy Ventures, Macquarie Capital, T. Rowe Price, etc.), including a $405 million Series F round in late 2024, and boasts customers such as Great River Energy, Xcel Energy, Dominion Energy, and government agencies.
• Sila Nanotechnologies manufactures and supplies advanced silicon anode materials (notably Titan Silicon™) that replace graphite in lithium-ion batteries, boosting energy density by up to 20–25% and improving charging speeds. Sila’s business model centers on B2B partnerships with major battery and automotive manufacturers—such as Mercedes-Benz, Panasonic, BMW, and Daimler—by licensing technology and supplying materials for integration into EVs and consumer devices.
• Zenobē is a leading operator of grid-scale battery storage and electric fleet solutions, with about 735 MW of grid-connected batteries live or under contract, and a goal of 1.2 GW by 2026. The company offers grid-balancing services as well as electrification solutions to transport operators. Key backers are KKR and Infracapital.

Comparison of dominant and emerging technologies 

Lithium-ion batteries are the most common today, with two main types: NMC and LFP. NMC batteries have high energy and are used in high-end electric vehicles and electronics. LFP batteries are cheaper and safer, making them popular for everyday EVs and energy storage. New technologies like solid-state batteries, which use solid materials instead of liquids, promise better safety and longer life but aren’t widely available yet. Flow batteries store energy in liquids and are good for large, long-lasting storage. Sodium-ion batteries use more common materials and could be cheaper but still need more development. Other types, like lithium-sulfur and magnesium-ion, plus better recycling methods, are being worked on to improve costs and performance.

Opportunities and risks 

• Opportunities - Investment opportunities in battery technology span the entire value chain. Upstream, there is strong potential in raw materials such as lithium, nickel, and cobalt, along with advances in mining technology and refining processes to secure and improve supply. In the midstream segment, cell manufacturing, battery design, and supply chain optimization present key areas for value creation as companies work to scale production and improve efficiency. Finally, downstream opportunities include integrating batteries into electric vehicles and grid storage solutions, as well as growing markets in battery recycling and second-life applications, which help address sustainability and resource reuse challenges.

• Risks - The supply chain is highly concentrated, with key materials like lithium, cobalt, and nickel coming from geopolitically sensitive regions, making the industry prone to disruptions and price swings. Quality control remains a concern, as 28% of systems recently inspected had fire suppression issues, and 72% of storage system failures happen within the first two years. Technical limitations in battery management lead to state-of-charge errors of up to 15% and AI misclassification rates of 20%, raising safety and maintenance risks. The sector also faces evolving regulations, growing cybersecurity threats, and fierce competition from low-cost Chinese producers. Navigating these risks is essential for capturing the industry’s innovation and growth potential.

The bottom line 

As the world moves faster toward clean energy and electric vehicles, battery technology has become a key part of this change. Demand is growing quickly in areas like EVs, renewable energy storage, and everyday electronics, while the pace of advancement in cell chemistry, manufacturing, and recycling is accelerating, opening clear windows for value creation across the value chain. 

We believe the upside for differentiated, defensible platforms is significant. Solid-state or alternative chemistries, scalable recycling solutions, and software-driven battery management offer clear paths to market leadership. However, the sector’s complexity—marked by supply chain concentration, quality and safety risks, and fierce international competition—demands rigorous due diligence and active risk management.