Powering the Shift: Scaling battery innovation across borders

As electrification transforms mobility and energy, batteries have emerged as a crucial factor for competitiveness, energy sovereignty and sustainability. Vincent Veron, Head of Transition Minerals, Metals and Batteries, Low Carbon Transition Group at BNP Paribas, examines the ways regional trends, financing strategies and emerging technologies are influencing the sector worldwide.

What challenges and opportunities do Asia Pacific, the US, and Europe face in scaling up battery production and infrastructure?

Understanding the intricate interplay of regional policies and market forces is important to grasp the dynamics of global battery supply chains.

Asia Pacific has emerged as a global powerhouse in battery innovation and large-scale production. Japan was instrumental early on in the development of lithium-ion technology, and China subsequently adopted a systematic strategy to advance clean energy vehicles by investing throughout the value chain — from minerals to processing, recycling, electric vehicles (EV) battery manufacturing and vehicle design.

Thanks to its access to its sizeable population of mechanical engineers and a large consumer base, China is delivering both innovation and economies of scale. A major challenge is making sure domestic suppliers can withstand intense competition in China and secure significant market shares locally and abroad. In this scenario, attention is being given to how national policies impact Chinese investments overseas.

The U.S. market benefitted from strong policy support like the Inflation Reduction Act (IRA), which catalysed investment in domestic EV battery supply chains and charging infrastructure. The U.S. possesses valuable resources, competitive capital markets, and a dynamic start-up ecosystem. Innovations from companies like Tesla have propelled the industry, though EV adoption varies by region and infrastructure remains uneven. Although public support has been scaled back, the current administration continues to promote the development of local infrastructure through fast tracking permitting and targeted tariff measures.

Finally, Europe’s ambitious policies, such as the ‘Fit for 55’ legislation package mandating zero-emission cars by 2035, or the European Critical Raw Materials Act, demonstrate strong political will to advance electrification and clean mobility adoption.

However, the region faces gaps in the value chain, particularly in raw material sourcing and processing, manufacturing expertise, as well as recycling. Collaborations with Asian companies, which have contributed expertise through local joint ventures in countries like Poland, Hungary, and France, have helped bridge some of these divides, especially in manufacturing.

While Europe has faced some setbacks, the region can rely on significant strengths: a large automotive industry with established brands, skilled engineers, high safety standards, access to low-carbon power and a favourable regulatory environment among others.

Moving forward, success in the EU depends on targeted investments covering the full battery value chain, continued public support, partnerships to enhance innovation, and executing projects that turn ambition into operational reality.

What role do public–private partnerships play in scaling up battery industry projects?

Building a competitive industry requires substantial capital. Battery gigafactories and upstream projects typically require investments which are measured in billions and extensive ramp up periods (compounded by slow learning curves), consuming additional liquidity.

Public–private collaboration plays an important role in ensuring liquidity, managing risk, and expediting project implementation. Grants and public subsidies enhance project economics and facilitate access to equity. They assist in securing the overall financing and solidifying public support, as well as emphasising the strategic importance of a project. Recent innovative partnerships in the US and Japan have introduced terms for offtake agreements that play a role in enabling access to funding.

Export credit agencies (ECAs) and multilaterals such as the European Investment Bank (EIB) can bring competitive long‑term funding and structured risk‑sharing that support the sector through its formative phase. Overall public support aims to give the industry enough time to mature amid strong competition from more established players. Such partnerships could include stipulations for European content that demonstrate a strong commitment to sustainability, ensuring participants are more competitive in the market.

BNP Paribas supports projects from planning to construction by advising on strategy, structuring blended-finance solutions, and mobilising capital.

How is technological innovation driving resilience in the battery industry?

The battery industry is a leading sector in terms of research and development investment, alongside artificial intelligence, with continual innovation driving progress within the field. A primary objective is to lower costs for end consumers, which in turn expands the market for low-carbon transport and energy storage solutions.

Innovation is also enhancing the robustness of supply chains through constant diversification in battery chemistry. As a result, dependence on limited resources mined in remote areas (like cobalt) is decreasing, while sourcing options are expanding. Direct lithium extraction (DLE) from brines is emerging as a technology to produce lithium with a much smaller environmental footprint than conventional extraction methods.

Battery recycling can serve as an important supplementary source of minerals and is considered instrumental in progressing toward a fully closed production life cycle, reducing dependence on mineral extraction and supporting a sustainable battery supply chain.

Meanwhile, solid‑state batteries are drawing attention for potential gains in energy density and safety — two drivers that matter for both cost curves and consumer confidence.

In addition, infrastructure must keep pace: well-developed and expanding charging networks can reduce driving range anxiety, allowing manufacturers to adopt more affordable battery chemistries and therefore scale up production of EVs without compromising on convenience.

With the alignment of technology, funding and policy, the battery sector is transitioning into a phase of tangible progress. Each part of the world is pursuing its own strategy, raising the question: will the focus remain on competition, or will cross-border partnerships deliver greater value?

One thing is clear: the shift is underway, and its speed will shape the battery industry’s landscape in the years to come.