Battery 2035: The War for Global Supremacy – Asia vs USA vs Europe

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• By Anupam Nath

The lithium-ion battery industry stands at a pivotal inflection point as we head toward 2035. Global demand surged past 1.6 TWh in 2025, driven by electric vehicles (EVs) and battery energy storage systems (BESS), with projections reaching 6.8 TWh by 2035 – 85% from Li-ion chemistries. Yet, pack prices plummeted to a record $108/kWh in 2025 due to massive overcapacity, especially in Asia, which controls over 75% of production. McKinsey's latest report, "Battery 2035: Building New Advantages," outlines how winners will emerge by mastering cost leadership, operational excellence, regionalized supply chains, and cutting-edge technologies. For content creators and energy analysts tracking India's green revolution, this battle shapes the future of renewables.Cost Leadership: The Survival Imperative

Pack prices dropped 20% in 2024 and 8% in 2025, signaling razor-thin margins ahead. By 2035, NMC packs could hit $75-90/kWh and LFP $55-65/kWh, assuming stable raw materials. Success demands a "cost-efficiency checklist": optimize bill of materials (BOM) with higher cathode loading and silicon anodes; target manufacturing benchmarks like 80-90% line productivity, €50-80M/GWh capex, and 30-40 FTE/GWh; slash scrap rates from 70% during ramp-up to under 5%. Localization under US IRA ($35/kWh credit) or EU CRMA offers edges, but China-sourced BOMs may still undercut costs – producers must run regional analyses.Operational Excellence: Scaling Gigafactories

Global nameplate capacity hits 6.7 TWh by 2030, but many lines falter at low OEE and yields. Leaders will accelerate ramp-up to 95% yield in 18 months via the "OEE triangle" (availability, performance, quality), process innovations like dry electrode coating (saving €2-3/kWh in Europe), and talent systems with inline metrology and SPC. People matter: skilled operators and real-time monitoring turn factories into profit machines, outpacing competitors stuck in bottlenecks.Regional Battle: Reshoring Supply Chains

Asia dominates upstream/midstream (e.g., <10% global anode graphite outside China), but Europe and US are fighting back. EU's Green Deal targets 40% clean tech self-sufficiency by 2030; US IRA spurred 700 GWh under construction despite EV credit expiry. BESS booms – EU to 60 GWh, US over 50 GWh in 2025 – fuel demand. Building end-to-end chains needs €200-300B in EU investments, public-private partnerships, faster permitting, and tech roadmaps for LFP, NMC, solid-state, and dry processes. Incentives must derisk capital, map foreign exposure, and ensure traceability.India, with its booming solar/wind and BESS ambitions, watches closely. Viral trends like EV adoption and policy shifts (e.g., PLI schemes) mirror this global race. Winners won't just comply with regulations – they'll industrialize excellence and localize aggressively. As McKinsey warns, without structural improvements, capacity growth stalls. The 2035 battery superpower will power the world's energy transition. Stay tuned for tech breakdowns and India angles.