01 Shift Toward LFP Battery Chemistry LFP batteries are taking a larger role across electric vehicles and stationary storage as manufacturers prioritize lower material costs, long cycle life, and reduced reliance on cobalt and nickel. This chemistry shift is changing cell and pack strategies across the market, particularly in cost-sensitive applications. Wider LFP adoption is reshaping battery product portfolios and strengthening competition around chemistry-specific manufacturing efficiency and scale.
02 Transition to Sodium-Ion Batteries Sodium-ion batteries are moving from development toward commercial deployment as manufacturers seek chemistries that use more abundant materials and perform reliably in demanding conditions. Recent launches in passenger vehicles and energy storage show that sodium-ion systems are progressing beyond laboratory development. This transition is widening the battery technology landscape and creating a complementary chemistry pathway alongside established lithium-ion platforms.
01 The battery market forecasts robust capital deployment driven by the escalating demand for high-capacity, sustainable energy storage to support the rapid electrification of the grid and the automotive sector.
02 Key Investment and Funding Activities in Battery Market, 2025–2026 Company Funding/Investment (USD) Details TaiSan USD 5.3 million (£4.65 million) In July 2026, TaiSan, a sodium-ion battery electrolyte developer, completed a seed funding round led by institutional investors and supported by Innovate UK funding. The investment accelerates the commercialization of its advanced electrolyte formulations. Moment Energy USD 40.0 million In May 2026, Moment Energy, a company specializing in second-life battery storage systems, secured a USD 40.0 million Series B funding round led by Evok Innovations. The capital is designated to scale its pack-swapping architecture and commercialize enterprise-grade energy storage using repurposed electric vehicle batteries. Flux XII USD 3.95 million In November 2025, Flux XII, a company developing advanced materials for aqueous flow batteries, raised USD 3.95 million in a seed funding round led by The Grantham Foundation. The funds are intended to accelerate the development of its specialized flow battery technology for long-duration energy storage. VFlowTech USD 20.5 million In May 2025, VFlowTech, a developer of long-duration flow battery energy storage systems, raised USD 20.5 million in a funding round headed by Granite Asia. The investment will support the scaling of its flow battery technologies for microgrids and renewable energy integration.
01 The battery market is highly exposed to supply chain disruptions because it depends on globally sourced critical minerals like lithium, cobalt, and nickel along with geographically concentrated cell processing facilities. Disruptions in the availability of these essential raw materials increase manufacturing lead times, elevate production costs, and severely delay the fulfillment of energy storage systems and electric vehicles. On a global scale, manufacturers are responding by investing in localized gigafactories, diversifying mineral sourcing, and advancing circular economy recycling initiatives to reclaim critical metals from spent cells. The market is expected to follow a V-shaped recovery, as the relentless global push toward electrification and the rapid expansion of renewable energy infrastructure quickly restore high-volume production once mineral supplies stabilize.
01 Electrification of Vehicles and High Storage Deployment Drive Market Rapid growth in electric vehicles and battery energy storage is expanding battery demand as transport electrification and renewable power deployment require larger volumes of rechargeable storage. EVs remain the main source of battery deployment, while stationary storage is gaining importance across power systems. For example, global EV battery deployment reached 1.20 TWh in 2025, increasing almost 30% from 2024, according to the International Energy Agency (IEA). This strengthens overall battery demand.Battery manufacturers are expanding production capacity and improving automated manufacturing to meet rising orders across EVs and stationary storage. Larger facilities, higher production yields, and integrated supply chains can lower unit costs and increase output consistency. This expansion strengthens the industry’s ability to supply growing volumes and supports broader commercialization across major battery applications.
01 Regulatory Requirements and Critical-Mineral Concentration Restrain Market Expansion Mandatory sustainability, labeling, recycling, and information requirements can restrain battery market expansion because producers must comply with external rules before placing products in regulated markets. These obligations can increase documentation, testing, traceability, and compliance costs. For example, the EU Battery Regulation makes battery passports mandatory for relevant EV, industrial, and stationary batteries from February 2027, adding market-entry requirements for producers. This can limit entry flexibility.The geographic concentration of critical mineral processing creates an external supply constraint for battery manufacturers because essential materials and components remain concentrated in a small number of countries. Disruptions, trade restrictions, or policy changes in those locations can affect availability and costs. This concentration reduces supply flexibility and can restrict expansion for manufacturers dependent on imported materials.
01 Second-Life Storage and Battery Recycling Create Growth Opportunities for Market Players Retired electric vehicle batteries create an emerging opportunity for second-life energy storage because many packs retain useful capacity after automotive service. Repurposing these batteries can address demand for lower-cost stationary storage while extending asset value before recycling. For example, General Motors and Redwood Materials deployed around 100 repurposed GM battery packs in a 1.50 MW/7.20 MWh Michigan storage system, creating value beyond vehicle use. This broadens the battery value chain.High volumes of end-of-life batteries create opportunities for recycling businesses that recover lithium, nickel, cobalt, copper, and other materials for reuse in new battery production. Rising collection requirements and stronger circular-economy policies are increasing the value of recovered materials. This creates a secondary feedstock opportunity and can support new processing capacity closer to battery manufacturing markets.
01 Manufacturing Scale-Up and Price Competition Hinder Growth Production yield remains a major challenge because new battery plants can take years to reach efficient output, while early production may generate high scrap rates. Companies must improve process control, automation, and quality consistency as facilities expand. These requirements increase execution risk and can delay commercial volumes, making large-scale manufacturing difficult for newer producers. This complicates capacity expansion.Intense price competition challenges battery manufacturers by compressing margins and making it harder to recover large capital investments required for new capacity. Producers must compete against highly efficient manufacturing ecosystems while maintaining quality and technology spending. For example, Northvolt filed for bankruptcy in 2025 after production ramp-up difficulties, supply disruptions, rising capital costs, and weaker market conditions eroded its financial position. This demonstrates the commercial impact of operating pressure
April 2026 CATL and HyperStrong signed a three-year strategic cooperation agreement covering 60 GWh of sodium-ion batteries for energy storage applications.
March 2026 Samsung SDI executed a USD 1 billion supply contract to provide energy storage system (ESS) batteries to a U.S. energy company.
February 2026 LG Energy Solution announced a business expansion to acquire full ownership of the NextStar Energy battery manufacturing facility in Canada by purchasing the 49% equity stake previously held by its joint venture partner, Stellantis.
November 2025 Panasonic Energy Co., Ltd. signed a multi-year agreement with autonomous ride hailing company Zoox to supply 2170 cylindrical lithium-ion batteries starting in early 2026.