This work is independent, reflects the views of the authors, and has not been commissioned by any business, government, or other institution. Global demand for batteries is increasing, driven largely by the imperative to reduce climate change through electrification of mobility and the broader energy transition.
Just as analysts tend to underestimate the amount of energy generated from renewable sources, battery demand forecasts typically underestimate the market size and are regularly corrected upwards.
In an earlier publication, a joint report by McKinsey and the Global Battery Alliance GBA , and Systemiq, A vision for a sustainable battery value chain in , we projected a market size of 2.
Although battery growth will confer multiple environmental and social benefits, many challenges lie ahead. To avoid shortages, battery manufacturers must secure a steady supply of both raw material and equipment. They must also channel their investment to the right areas and execute large-scale industrialization efficiently. And rather than just greenwashing—making half-hearted efforts to appear environmentally friendly—companies must commit to extensive decarbonization and true sustainability.
Faced with these imperatives, battery manufacturers should play offense, not defense, when it comes to green initiatives. This article describes how the industry can become sustainable, circular, and resilient along the entire value chain through a combination of collaborative actions, standardized processes and regulations, and greater data transparency.
