Charge Forward! Innovating across the Battery Supply Chain

Batteries have long been identified as key enablers of the energy transition, serving to mitigate the intermittency of renewable energy. However, the importance of this strategic area extends beyond mere energy storage and reveals significant vulnerabilities at the heart of the supply chain, in particular a pronounced dependence on China from mineral extraction and refining to assembly and various other stages. In Europe, building a sovereign and competitive battery industry has faced considerable challenges thus far.

In our latest webinar in partnership with Audacia, Eric Benoist, Technology Research Specialist at Natixis CIB, discussed the reasons behind these difficulties and assessed whether lessons have been learned from past missteps with Anna Teyssot, General Partner at Exergon - Audacia; Luc Pez, Chief Commercial Officer at Viridian Lithium; Yasmine Assef, Senior Principal at Afry Management Consulting; and Gaëtan Depaëpe, Cofounder and CEO of Entroview.

The panelists explored whether technological innovation alone can recalibrate the global balance of power. As the landscape rapidly evolves with advancements in alternative chemistries, innovative software solutions, and distributed implementations, the central question remains: are these developments genuine and applicable, or merely part of yet another hype cycle?

They also addressed recycling and second-life applications as means to bolster industrial independence while managing environmental impacts.

Anna Teyssot first emphasized the critical importance of the ramp-up phase in industrial deployments, stating, “It is absolutely crucial to have the pilot line as close as possible to the production line to test processes at capacity,” along with gaining access to actionable data and analysis to identify problems and optimization opportunities.

She also highlighted the necessity of maintaining the right technological and geographical focus to maximise chances of success.

Luc Pez followed up by underscoring the significant advantages held by Chinese competitors, namely their vertical integration and long-term thinking.

Focusing specifically on lithium - "an industry outrageously dominated by China, which holds more than 90% of the refining capability" - Luc Pez analyzed that China's competitive advantage particularly lies in the midstream sector, characterized as "a low-return profile industry that is not particularly attractive from an investor standpoint."

This advantage is further bolstered by low operational and capital expenses, easy access to capital, the presence of public R&D clusters, streamlined regulations that are adjusted annually and long-term planning - “five metrics in which Europe lacks.”

In light of this, the concrete application of the CRM Act, under which Viridian’s project of a lithium conversion facility in Alsace was among the first 47 strategic initiatives to enter the list, is a positive development.

Additionally, easing the constraints faced by European producers, particularly regarding permitting, is essential for enabling them to offer competitive pricing to OEMs. These topics are expected to be discussed within the framework of the Industrial Accelerator Act in February.

Luc Pez specifically suggested that authorizing access to the European market must include, in return, transfers of technology. The deployment of capital at scale is also crucial, and deeper public-private partnerships would be needed to complement equity or quasi-equity financing.

Panelists then shifted their focus to alternative chemistries to lithium, which currently accounts for 85-90% of the battery ecosystem, primarily due to its high energy density, efficiency, fast cycling and low self-discharge. However, lithium batteries present several limitations, including shorter lifespans, reduced thermal stability, higher material costs, and environmental concerns. Furthermore, they are typically suited for short-duration applications, lasting between 2 and 4 hours.

Innovative options such as sodium, vanadium redox flow, and solid-state batteries have sparked considerable interest, but key questions remain: Are these alternatives truly economically viable? Can they be scaled beyond laboratory conditions, and if so, within what timeframe?

Anna Teyssot highlighted that emerging technologies like sodium are less affected by the price volatility of raw materials such as cobalt, lithium, and copper. However, many companies struggled with the ramp-up phase, and as lithium prices dropped, found themselves with mature products that underperformed due to lower energy densities, and lacked cost competitiveness due to an inadequate supply chain, leading to limited scalability.

For longer durations exceeding 10 hours, options such as pumped hydro storage, compressed liquid, compressed air, and gravity systems could offer viable solutions, although the required investments are substantial. Systems where power and energy can be decoupled, as seen in redox flow batteries, are better suited for these scenarios, although still in the early stages of their development.

She acknowledged that competing with China in product design is challenging, but Europe has significant opportunities in areas like dry coating processes. By leveraging manufacturing excellence, innovative ideas, and a focus on data management, alongside non-destructive quality checks, Europe can carve out its own niche in the industry.

Luc Pez observed that many sodium start-ups went bankrupt in 2024-2025 due to a singular focus on cost. While Europe is strong in innovation, it often lacks the culture of scalability and resilience that characterizes China, which employs a strategy of diversifying technologies and ensuring timely market delivery.

Beyond chemistry innovation, the panelists shifted their focus to creative methods for achieving large-scale energy storage by utilizing existing capabilities. Yasmine Assef elaborated on the concept of vehicle-to-grid (V2G) technology, through which energy is drawn from the batteries of electric vehicles - specifically ‘bidirectional’ cars - and fed back into the grid.

This system could provide vital flexibility as the grid increasingly accommodates intermittent renewable electricity while facing rising demand driven by the electrification of mobility and the economy - one in four new vehicles worldwide is now electric. “This concept transforms the electric vehicle from a liability into an asset for the electrical grid, utilizing the batteries to their full capacity,” Yasmine Assef stated, noting that this system does have limitations.

To her, the biggest challenge is the lack of interoperability. “The ecosystem is complex, and for it to function effectively, all stakeholders must collaborate.” For example, there is a divide among carmakers: some integrate the inverter into the vehicle while others believe it should be managed externally. Additionally, there are concerns about whether they will authorize the energy to flow outside their batteries for warranty reasons.

Regulation, particularly double taxation, also poses a significant issue, as owners are taxed twice - once when they charge their car and again when they feed energy back into the grid. She praised the alleviation of this concern in Germany last year and emphasized that for V2G to grow, homogeneous grid codes must be implemented across Europe.

Most importantly, the question of control arises: the car owner wants to maintain control over their vehicle, while OEMs are hesitant to assume responsibility for potential overuse of the batteries. Meanwhile, the grid needs to ensure reliability and stability of the supplied energy and aggregators monitoring the service don’t want to be left behind.

Eric Benoist then turned to Gaëtan Depaëpe to discuss a related topic: battery diagnostics, a specialty of Entroview, the deep tech startup he founded. The goal is to assess the current state of the battery to optimize its lifespan and leverage this information for financial and insurance purposes.

Given that batteries last around 15 to 20 years while manufacturers typically guarantee them for an average of 8 years, insurers are expected to develop products to bridge this gap. Entroview creates value by integrating AI with an initial physics-based analysis of the battery, enabling predictions with very small volumes of data, which is crucial since data is particularly difficult to obtain in this industry.

The predictability of batteries is vital for enhancing the second-hand market. Gaëtan Depaëpe pointed out that 90% of batteries sent for recycling are still in good condition. He noted that if just 5% of this flow could be utilized in the second-life industry, it would significantly transform the economics of the afterlife value chain, which is particularly important in discussions surrounding sustainability and sovereignty.

These considerations provided a seamless transition to closing the loop at the other end of the supply chain: recycling. According to the IEA, global recycling capacity is projected to quintuple by 2030, with the majority of this capacity still in China.

Europe must develop its own recycling capabilities to ensure sovereignty, recover metals and minerals, and reduce dependence on external extraction. The critical question remains: what is needed to establish an effective recycling value chain in Europe?

One of the main challenges revolves around the hydrometallurgical treatment of black mass, following the dismantling and preprocessing stages, which represent the low-capital expenditure and low-barrier part of the chain. Currently, Europe is a net exporter of black mass, particularly to South Korea, which is an economic and ecological “nonsense”.

Luc Pez analyzed that another challenging aspect is to predict the addressable market, as it involves multiple factors, particularly the chemistry mix that will ultimately prevail - typically, LFP (Lithium Iron Phosphate) versus NMC (Nickel Manganese Cobalt) - and how to properly size the needed capacity in the presence of uncertain EV market trends and growing second-life battery applications.

In this respect, he compared this with China’s integrated approach - from upstream processes to recycling - which allows it to compensate for deficiencies in certain parts of the supply chain. “China creates capacity first and then works with it.” This long-term thinking, flexibility, and partnership mindset account for their leadership in the industry.

He then addressed the efficiency of recycling, specifically the challenge of effectively upgrading these recycled salts related to residual materials, as well as the various applications of recycled materials, which are essential for the sustainability of the business model.

To conclude the discussion, Eric Benoist invited the panelists to consider the ecological footprint of recycling, noting that hydrometallurgy is highly polluting, involving chemicals, acids, and various substances that ultimately end up in waste waters.

Gaëtan Depaëpe emphasized that Western OEMs are currently facing significant challenges concentrating on costs, making it difficult to remain competitive while addressing ecological impacts and sovereignty issues at the same time. Meanwhile, Yasmine Assef suggested that CO2 price signals and negative CO2 should be used as powerful incentives to support the European ecosystem throughout the entire life cycle of the battery.