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Future skills hub

Batteries

Batteries

Batteries are no longer just a technology for electric cars. They are becoming a strategic part of the wider shift in energy, transport and advanced manufacturing. Explore our quick guide to battery technology for engineering and manufacturing SMEs.

Close-up of High-voltage Rectangular Battery Cells for Electric Vehicle or Hybrid Car. EV Battery Module for Automotive Industry. High Performance and High Capacity Blade Battery

The importance of the battery economy

Batteries matter because they sit at the centre of industrial electrification, energy storage, power management and more resilient energy systems. 

For SMEs, the important point is that the battery economy is not one single market. It is a wider industrial system, part of a broader process that might be described as batteryfication: the spread of battery-powered capability into more and more products, vehicles, processes, and industrial assets as batteries become smaller, more powerful, and longer-lasting.

Within the Future Skills Hub, batteries sit under the banner of Energy Transition Systems alongside Hydrogen. Their relevance lies not only in net zero and transport policy, but also in the broader growth of advanced manufacturing, power electronics, and circular economy services.

Hand with Lithium ion industrial high current batteries and connector

Why batteries matter for SMEs

Most SMEs will not enter the market by building a gigafactory. More realistic routes into the battery economy often sit in the wider value chain, for example:

  • Pack assembly and system integration
  • Battery management systems and controls
  • Thermal management and safety systems
  • Sensors, diagnostics and digital tools
  • Testing and validation
  • Repair, refurbishment and recycling.

This makes batteries less a single destination market and more a layered industrial ecosystem with multiple access points.

Batteries are also becoming important inside the SME itself. For some firms, battery storage may help capture lower-cost electricity, store on-site solar generation, support load-shifting, improve energy resilience and charge company vehicles or equipment more efficiently. 

That means batteries can be both a market opportunity and an operational tool.

Where the main opportunities sit

Materials and pre-processing

There may be opportunities in coatings, specialist materials handling, chemicals and quality control.

Cell manufacturing support

Even where large-scale cell manufacturing is dominated by bigger players, SMEs may find roles in enabling equipment, automation, tooling and process support.

Packs, modules, and systems

This is likely to be one of the most relevant areas for UK engineering SMEs, covering battery management systems, thermal management, pack assembly, controls and power electronics.

Software and digitalisation

Battery diagnostics, digital twins, advanced monitoring, battery life prediction, and energy management systems are all growing areas of value. For SMEs with strengths in controls, software, embedded systems, or industrial automation, these may be some of the clearest entry routes into the sector.

Circular economy

Reuse, repurposing, refurbishment, and material recovery may offer some of the most accessible future opportunities for SMEs.

Why timing and policy matter on battery production

Batteries are a policy-shaped market as well as a technology-driven one.

The UK Battery Strategy and the Advanced Manufacturing Sector Plan both position batteries as a strategic manufacturing capability for the UK. That means opportunities are influenced not only by customer demand, but also by funding, industrialisation support, domestic supply-chain priorities, and circular economy goals.

For SMEs, this has two main implications:

  1. Timing matters — some opportunities are already emerging in pack systems, diagnostics, integration, and recycling, while others depend on larger-scale manufacturing growth.
  2. Position matters — SMEs are likely to succeed by finding a clear role in the wider supply chain rather than trying to compete in every part of the market.
Serviceman repairs electric battery pack of hybrid car

The battery sector skills that matter most

Cross-disciplinary engineering

Battery markets often combine electrical integration, thermal management, electronics, embedded systems, software, and quality control.

Manufacturing readiness

Moving from R&D to industrial delivery requires stronger capability in process engineering, assembly, test and validation, automation, and operational discipline.

Safety and compliance

Battery systems require careful attention to quality, safety, standards, and performance monitoring.

Circular skills

Reuse, diagnostics, disassembly, material recovery, and second-life testing are becoming more important as the sector becomes more circular.

Practical steps for SMEs to consider

Batteries can appear strategically important but difficult to enter.

A practical SME response is to focus on where existing strengths can be extended. That should include asking whether your own site, your own energy use, or your customers’ operations are already beginning to change because of batteries, storage or smarter energy systems.

Look at where your current strengths in controls, electronics, thermal systems, testing, software or process engineering may already fit battery markets.

Electric vehicle batteries; clean energy

Practical steps for SMEs

1. Look for value-added niches

Many realistic opportunities sit in pack systems, diagnostics, software, testing, integration, or circular services rather than in the most capital-intensive parts of the market.

2. Use national facilities and programmes

Make active use of support from UKBIC, the Faraday Battery Challenge, the Faraday Institution, and Innovate UK Business Connect.

3. Build skills partnerships

Work with colleges, universities, training providers, and sector bodies to build the right mix of technical and manufacturing capability.

4. Explore circular economy routes

Refurbishment, reuse, diagnostics, and recycling may offer some of the clearest entry routes for SMEs with the right engineering and service capability.

5. Specialise without becoming isolated

Build a trusted role within a wider network, whether that is as a software specialist, a systems integrator, a testing partner, a thermal-management supplier, or a circular-economy service provider.

Key support available

SMEs can access useful support through these organisations, which can help with industrialisation, market visibility, skills planning, and scale-up.

Wider battery innovation, training, and circular economy networks can also provide support.

Female engineers in factory

Summary

For engineering and manufacturing SMEs, batteries are not just about gigafactories or major headline investments.

They are part of a growing industrial ecosystem in which value is created across materials, systems, software, testing, integration, and circularity.

SMEs are most likely to succeed not by chasing the biggest manufacturing headlines, but by identifying adjacent strengths, building trusted positions in specialist parts of the value chain, and developing the cross-disciplinary skills needed for a more electrified industrial system.

For many SMEs, one of the most practical first steps is to see batteries not only as something to manufacture for others, but as part of a wider shift in how energy is stored, managed, and used across their own operations and supply chains.

The Future Skills Hub is here to help firms move from general interest in batteries to practical, credible routes into the market.

Hand with Lithium ion industrial high current batteries and connector

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