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Exploring the four critical user segments of the fast-growing battery sector

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Batteries have become an indispensable aspect of our modern lives, powering an array of devices and systems that we rely on daily. The battery landscape has evolved significantly over the years, giving rise to distinct segments that cater to diverse needs.

This article delves into the four key user segments of batteries: micro batteries for tracking & tracing, IoT, and medical use; batteries for consumer devices like our phones and laptops; batteries for transportation; and batteries for our power grid for storage and management.

Batteries have taken center stage in our quest for a clean future and the race against climate change. Regular lithium-ion batteries with liquid electrolytes dominate the dialog today, but research into solid electrolyte solid-state batteries, other chemical formulations, new and cheaper materials, and new ways to produce the components, holds the promise of even greater improvements in the future. Other kinds of batteries and storages will also get into play.

Manufacturers are constantly pushing the boundaries of battery chemistry, form factors, manufacturing processes, battery design and integration, to deliver products with longer usage, faster charging, and higher safety, and at the same time seeking to reduce size, weight, and price. In the end, economics will drive the development and ecology.

Different usages have different solutions, and contrary to most beliefs, no one battery solution fits all. Mobile vs. stationery batteries is one vital difference for example.

Location, weather, and space are other considerations, where temperatures and surroundings come into play.

Lithium-ion batteries dominate the debate, but as we will illustrate, there are other solutions as well as breakthroughs coming online, and many of them are quite specific to each of the four overarching segments of batteries.

Battery User Segments

1st Segment: Micro batteries – enabling precision tracking and tracing

In an increasingly interconnected world, micro batteries represent a remarkable achievement in miniaturization, powering devices designed for precision tracking and tracing of objects and living creatures, for example with the Internet of Things (IoT).

These batteries are often integrated into compact sensors, IoT devices, and medical implants. The ability to provide reliable power in a minuscule form has opened new possibilities in logistics, healthcare, and beyond.

Micro batteries are the unsung heroes behind location trackers, remote sensors enabling real-time data collection, optimizing supply chain efficiency, medical and health monitoring through devices like RFID (Radio Frequency Identification) tags, medical implants, and miniature sensors the size and thickness of a human nail.

2nd Segment: Batteries for consumer devices – powering our everyday electronics

The ever-growing presence of smartphones, laptops, and other devices has necessitated the development of batteries tailored to these electronics. The focus here is not only on capacity but also on factors like fast charging, longevity, and environmental impact.

Lithium-ion batteries, the prevailing technology in this segment, have for the last 30 years been refined to offer enhanced energy density and power while maintaining a compact form, always with safety as the cornerstone criteria.

Consumers demand higher energy density, longer battery life, and quicker charging times. Manufacturers are racing to meet these expectations while also addressing concerns about the sustainability of battery materials, disposal and recycling. With ongoing research into solid-state batteries and alternative and cheaper materials like sulphur and sodium, this segment remains dynamic, promising exciting breakthroughs that can be used in all four segments.

In the realm of consumer electronics, batteries have the center stage, fuelling our smartphones, laptops, tablets, and wearable devices. As our reliance on these gadgets grows, so does the demand for more energy-dense, longer-lasting, safer, and faster-charging batteries.

Manufacturers are constantly pushing the boundaries of battery chemistry and design to deliver products with extended usage times and reduced charging intervals without sidestepping safety.

3rd Segment: Electrifying transportation – batteries for cars and other transport forms

The transportation sector is undergoing a transformative shift from internal combustion engines to electric propulsion systems, and batteries are at the heart of this revolution, driven by the push for sustainability and reduced (zero) carbon emissions.

Batteries in this segment must provide not only ample energy storage but also the ability to deliver consistent power for extended periods under as little weight load as possible, at the right price, not an easy ask.

Lithium-ion batteries are again at the forefront, with advancements in chemistry leading to higher energy densities and faster charging. This segment has been the driver for technology and attention around batteries, and it is one of the two largest and most important segments in the world’s efforts to leave fossil fuels behind and de-carbonise the planet.

Range anxiety, charging time and the charging infrastructure are challenges that batteries in transportation must address, but the hurdle here is lower than most people fear, and solutions are closer than people are aware of; the solutions are indeed already known but they need capital for their implementation.

Innovations in charging technologies, such as fast-charging networks and bidirectional charging, are transforming the landscape. As the EV market expands, battery research focuses on improving charging speed, battery life, and recycling techniques, shaping the future of sustainable transportation.

The magnitude of this segment with the automotive industry’s force behind it, makes it a driver for the whole battery industry, as well as the limiter of resources and costs. Supply chain challenges have been a large constraint and impacting the choice of battery chemistry, not always in the better direction, but we are taking giant steps for mankind here. The overarching philosophy is (or should be) “Less is More” and “Simpler is Better”! Those concepts do not yet seem to have arrived with all automotive managers and their engineers.

4th Segment: Managing energy and changing the future – utility-scale storage and management.

Where the first three segments above are about the use of energy, this fourth segment is about energy production, storage, and not least management.

As renewable energy sources like solar and wind are becoming players in the energy mix, the need for efficient large-scale energy management to balance the power will be growing. The difference between the load (demand) and the intermittent nature of renewable energy production calls for smarter and distributed energy management and storage solutions.

To reach our climate goals, we must also turn our behaviour towards “energy on availability”. Historically power has always been “energy on demand”, but we need to optimize and align our energy production and use (balancing), the load pattern.

This is where batteries and hydrogen as energy carriers comes into play, enabling us to reach the climate goals we need to achieve.

This can partly be achieved through intelligent and timed power usage, through shifting electricity demand away from peak hour uses into off-peak hours at night, seeking to balance demand and supply. This can also happen through shifting energy availability into the time window where it is demanded.

Large stationary utility scale batteries on the grid, as well as our own inhouse batteries and in our cars, all offer the means to manage and store, shift and balance, excess energy from peak generation, and release it during periods of demand (peak load).

These grid-scale batteries are becoming a cornerstone in our transition towards a cleaner and a more resilient energy system. They are often colossal in physical size and are organized in 40-foot containers, and they are designed to withstand frequent charging and discharging cycles, even supplying automatic grid management down to fractions of seconds, also known as the ‘six auxiliary grid services’.

They will play a pivotal role in managing the grid, securing stability in our power supply, and at the same time facilitating the integration of much more clean power and energy.

In this segment other battery designs and technologies like the containerized flow batteries, plus the sodium-ion batteries as well as the LFP lithium-ion chemistry from the transport (third) segment hold promise. Optimal stationary storage solutions are dependent on their surroundings in a different manner than mobile batteries. Factors like weather, temperature and space are all influencers, and lesser so size and weight.

The focus here is on scalability, long lifespan, and super-fast response times, and finally economics. Grid storage needs to do its job at the lowest possible price.

In summary

The battery landscape is a dynamic realm encompassing a diverse range of applications. From the tiniest internal medical and tracking devices, over our domestic appliances and automotives, to the massive, large scale grid batteries that manage and optimise our entire energy system. Each user segment showcases the relentless pursuit of efficient, sustainable, and high-performance energy storage solutions, at the right price.

The different batteries play a distinct role in shaping the way we live, work, and move. As research and development continues to push the boundaries of what’s possible, the future holds exciting possibilities for even more efficient, longer-lasting, safer, and environmentally friendly battery solutions that are both reusable and recyclable.

Whether it’s enabling seamless connectivity, powering clean transportation, or ensuring a reliable and clean energy supply for housing or industries, batteries are undeniably a driving industrial and societal force that will only expand in the foreseeable future.

The electro chemical research revolution that the battery industry has brought forward in the last 30 to 50 years, will also revolutionize the world of smart metals “alloys”, in profound ways. This is similar to what it did when mankind first found copper and later mixed it into bronze, the world’s first alloy 5 – 7.000 years ago.

Henrik Mikkelsen is a Strategist, Investment Advisor and Business Developer with Iridis AG, an investment management and corporate advisory firm in Zug, Switzerland. Henrik has more than 30 years of experience from investment banking and commodity trading, running strategies for clients and himself, as well as writing about markets and giving lectures on technical analysis and risk management. 

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This article does not constitute investment advice. Make sure you do your own research or consult a professional advisor.

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