How batteries can be a long-term store of value for equity investors
31 March 2025
The next generation of electric vehicles (EVs) in China will bring charging times down to as little as five minutes. That’s according to China’s biggest EV maker, BYD, which unveiled a new system in March.[1]
The latest advance in battery technology could be a pivotal moment for the electrical storage sector. Securities-backed financing can help long-term investors unlock funds to buy into this investment trend and navigate emerging opportunities across the sector as a whole.
Most people associate batteries primarily with electric vehicles, where the mass production of high-capacity batteries has accelerated the decarbonization of road transport. In China, the world’s biggest car market, 11 million electric cars, including hybrids, were sold in 2024, accounting for almost 50% of all new sales.[2]
However, batteries also have a growing role to play in the energy sector, where massive amounts of energy storage will be needed to electrify industrial processes and support the transition to intermittent solar or wind power.
Batteries will be responsible for close to one-fifth of the CO2 emissions reductions needed by 2030 to put the world on track for net zero emissions by 2050.[3] The International Energy Agency forecasts that 1,200 gigawatts (GW) of battery storage capacity will be needed by 2030, up from just 86GW in 2023.[4]
The applications of batteries don’t end there. Rising defense spending in Europe is putting the spotlight on battery-powered military drones, now an essential component of modern warfare.[5] Even in a domestic setting, anything that has a power cord has the potential to be replaced by a battery-powered equivalent in the coming years.
Navigating a complex environment
Investors looking at the battery sector, however, face a number of challenges. Projections for rapid growth in EV adoption now look less certain, as the current US administration rolls back incentives and Europe relaxes the timeline for a ban on new petrol-powered cars.[6] Chinese exporters are facing higher tariffs and stiffer competition, too, as other markets look to stimulate domestic battery production. Volatile lithium prices, the key raw material for lithium-based batteries, can be a drag on margins.
Evolutions in battery technology also add to the uncertainty. Solid-state batteries[7] and other alternatives could displace the lithium-ion standard.
The importance of batteries, however, is only set to increase as governments and businesses step up their investments in electrification.
In Indonesia, for instance, the government is keen to use the abundance of nickel and other battery minerals to develop an integrated EV supply chain. By 2027, it aims to become one of the world’s top three producers of EV batteries.[8] Other countries are investing in batteries and clean energy infrastructure to reduce their dependence on imported fossil fuels and enhance their energy security. India, which has a goal of achieving energy independence by 2047, is a case in point.
Upgrading electricity networks to reach the global goal of tripling global renewable energy capacity by 2030 will take the combined might of battery technology companies and all matter of battery formats worldwide. The energy sector accounts for over 90% of overall battery demand.[9]
Against that positive long-term backdrop, the latest developments in battery technology have the potential to recharge investors’ interest in the sector. Whether investors are looking to free up funds to invest, or looking to monetize existing investments to navigate short-term volatility, securities-backed financing can help capture the long-term potential of this critical sector.
[1] https://fortune.com/2025/03/17/byd-battery-system-charging-5-minutes-tesla-superchargers/
[2] https://apnews.com/article/china-autos-evs-exports-3f5860634a1d146446dd0dd9e78c2abb
[3] https://iea.blob.core.windows.net/assets/cb39c1bf-d2b3-446d-8c35-aae6b1f3a4a0/BatteriesandSecureEnergyTransitions.pdf
[4] https://iea.blob.core.windows.net/assets/cb39c1bf-d2b3-446d-8c35-aae6b1f3a4a0/BatteriesandSecureEnergyTransitions.pdf
[5] https://www.cigionline.org/articles/drone-technology-is-transforming-warfare-in-real-time/
[6] https://www.reuters.com/business/autos-transportation/eu-propose-giving-automakers-three-years-meet-co2-emission-targets-2025-03-03/
[7] https://www.scmp.com/news/china/science/article/3269565/china-scientists-low-cost-solid-state-battery-could-be-ev-industry-breakthrough
[8] https://www.aseanbriefing.com/news/indonesias-electric-battery-industrial-strategy/
[9] https://www.iea.org/news/rapid-expansion-of-batteries-will-be-crucial-to-meet-climate-and-energy-security-goals-set-at-cop28
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