Powering on or powering down?

December 19, 2025

Powering On or Powering Down? What 2025 Tells Us About the Battery Transition

Inga Petersen, Executive Director of the Global Battery Alliance

If 2025 felt like whiplash for the global battery industry, it is because policy, markets, and geopolitics pulled in different direction, often at the same time.

Electric vehicle markets slowed in parts of Europe and the United States, weighed down by policy uncertainty, uneven incentives, and shifting consumer confidence. Cost pressures intensified across the value chain, while overcapacity and price compression strained business models. For many, these signals raised a fundamental question: is the battery industry powering on or slipping into energy saver mode?

Yet this is only part of the picture.

Even as EV demand softened in some regions, global battery demand surpassed 1 TWh and continued to grow at double-digit rates[1]. Stationary energy storage delivered a record year: globally, annual energy storage deployment is set to hit another all-time high at 92 gigawatts in 2025 – 23% higher than in 2024[2]. The transition is not slowing, it is broadening. Batteries are increasingly central not only to transport, but to power systems, energy security, and industrial resilience.

Geopolitical tensions and trade fragmentation added further complexity. Strategic autonomy agendas, tariffs, and supply security concerns disrupted established supply chains and challenged global coordination. But these same pressures also accelerated efforts around supply diversification, recycling, and new chemistries, with lithium iron phosphate (LFP) gaining global share. What began as risk mitigation is increasingly shaping long-term industrial strategy.

Sustainability, in particular, is facing serious challenges as we approach the end of the year. Regulatory uncertainty, in Europe and the US, has created significant headwinds for companies already fully invested in implementing environmental and human rights due diligence and scaling responsible practices across their operations. At the same time, geostrategic competition is inadvertently emerging as an enabler for more sustainable practices as Extended Producer Responsibility mandates expand across jurisdictions, and emphasis is being placed on circularity and recycling. Notably in its quest to diversify supply chains, the G7 reinforced commitments to transparent and standards-based markets, and we see traceability moving from ESG aspiration to hard requirement. At the same time, convergence is emerging around digital standards and data exchange protocols, including the UN Transparency Protocol. Transparency is no longer a voluntary add-on; it is becoming a condition for market access, compliance, and investment.

For professionals across the ecosystem, resilience and sustainability are becoming  inseparable. Transparent, accountable battery value chains are better equipped to manage geopolitical risk, support industrial competitiveness, and scale responsibly. Operations that engage meaningfully with local communities, uphold environmental and human rights standards, and build trust across stakeholders are better equipped to withstand disruption, regulatory scrutiny, and social opposition. From mining projects delayed or halted due to lack of community consent, to manufacturing and recycling facilities facing permitting challenges and public resistance, the absence of social licence to operate has proven to be a material risk. Conversely, responsible practices, embedded from extraction through manufacturing and end-of-life, help secure long-term access to resources, enable smoother project development, and reduce reputational and operational shocks. In a world of heightened transparency and accountability, sustainability is not a compliance exercise but a foundation for durable growth.

This is where pre-competitive collaboration becomes essential.

Since 2017, the Global Battery Alliance has convened more than 140 public and private stakeholders across the battery value chain. We have evolved from a coalition of the willing to a coalition of the doing, focused on implementation, not just alignment. Our role is to provide neutral, trusted frameworks that enable responsible, resilient, and circular battery markets, while mobilizing first movers to shape emerging norms.

These dynamics came into sharp focus at last’s weeks’ Annual General Meeting in Brussels, which served as a moment of collective reflection at the close of a turbulent year. Policymakers, industry, investors and civil society engaged in candid exchanges, not only about challenges, but about what can be done next. The emphasis was firmly on action. Nowhere was this clearer than in discussions around the Battery Passport. Interest in the operational trials which seek to prototype the GBA’s sustainability certification for batteries has grown rapidly, with over 30 companies registering interest to participate. The focus is shifting from concept to execution, on governance, interoperability, and real-world deployment. The Battery Passport is not an abstract sustainability tool; it is set to become the market infrastructure designed to enable compliance, transparency, market differentiation and trust across jurisdictions.

Looking ahead, the message from the Global Battery Alliance is clear: 2026 must be the decisive year to translate alignment into implementation. The foundations exist and the ecosystem is engaged. What is needed now is regulatory clarity, international alignment, and continued support for pre-competitive solutions that reduce fragmentation rather than reinforce it. As the battery sector underpins energy transition, competitiveness, and security objectives, enabling trusted and resilient markets is a shared responsibility. The experience of 2025 shows that volatility can either fragment systems, or strengthen cooperation. The choice lies in whether we turn intention into action.

The Global Battery Alliance remains firmly committed to maintaining its unique platform for dialogue and collective action across the battery value chain—one that brings together industry, policymakers, investors, and civil society organizations on equal footing. In a period marked by volatility and fragmentation, the ability to listen across perspectives and act together is not a nice-to-have; it is a necessity. By sustaining this inclusive, action-oriented approach, the GBA will continue to support markets that are not only growing, but trusted, responsible, and fit for the future.

[1] https://www.iea.org/commentaries/the-battery-industry-has-entered-a-new-phase

[2] https://about.bnef.com/insights/clean-energy/global-energy-storage-boom-three-things-to-know/