ROI-From curiosity to cornerstone - how batteries went mainstream: Maguire

Batteries have undergone a transformative shift from niche components to a strategic foundation, underpinning the global transition away from fossil fuels in just over three decades.

For most of the past century, batteries were the quiet workhorses of the modern economy — essential, but hardly transformative. ​They started cars, powered radios, and provided backup when the grid failed. Today, they are at the center of a global industrial shift, underpinning everything from smartphones and ​electric vehicles to power grids increasingly reliant on renewable energy.

That transformation — from niche component to strategic foundation — has unfolded with ‌unusual speed. ​In little more than three decades, batteries have moved from an afterthought in energy systems to one of the defining technologies of the transition away from fossil fuels. The story is less about a single breakthrough than a convergence of technology, scale, policy and economics that has pulled batteries into the mainstream.

PORTABLE CONSTRAINT Before the 1990s, batteries were largely confined to specific, often unglamorous applications. Lead-acid batteries dominated, used in cars and industrial backup systems.

Rechargeable options existed, but they were bulky, short-lived and expensive relative to the energy they could store. Even as electronics proliferated in the late ‌20th century, batteries were still seen as a constraint rather than an enabler. Devices were designed around their limitations: short runtimes, heavy weight and slow charging.

The idea that batteries could reshape entire industries — or global energy systems — would have seemed far-fetched. LITHIUM ION CHANGES THE EQUATION

That changed with the commercial introduction of lithium-ion batteries in 1991. The new chemistry offered a step-change in energy density, rechargeability and flexibility. Suddenly, portable electronics were no longer tethered to power outlets. Over the following decade, lithium-ion batteries quietly powered the rise of laptops, mobile phones, and eventually smartphones. By the early 2000s, batteries were no longer just supporting devices — they were enabling entirely new product categories.

This was the first shift toward mainstream relevance: batteries became embedded in daily life, even if they were still largely invisible. The next turning point came ‌from scale. As global demand for consumer electronics surged in the 2000s and early 2010s, battery manufacturing ramped up dramatically, particularly in East Asia.

With scale came learning. Manufacturing processes improved, yields increased, and supply chains matured. Costs began to fall — steadily at first, then rapidly. Over roughly a decade, lithium-ion battery prices dropped by close to 80% to 90%, one of the ‌steepest cost declines of any major industrial technology, according to data from the International Energy Agency (IEA).

That cost curve would prove decisive. Cheaper batteries did not just expand existing markets; they created entirely new ones. EVS MAKE BATTERIES STRATEGIC

No sector illustrates that shift more clearly than transport. Electric vehicles turned the battery from a component into the defining feature of the product — effectively replacing the internal combustion engine as the heart of the car.

The shift has forced automakers to rethink supply chains, manufacturing processes and even national industrial strategies — at least for those carmakers looking to compete in the EV space. Companies like Tesla built their business models around battery performance and cost, while governments introduced incentives and emissions rules that accelerated adoption.

At the same time, demand for raw materials such as lithium, cobalt and nickel surged, pulling batteries firmly into the realm of geopolitics. Supply chains became strategic assets, and control over battery materials began to carry implications for energy security and industrial competitiveness. Batteries ⁠were no longer just ​consumer tech — they were a cornerstone of the future transport system.

FROM MOBILITY TO THE GRID The next frontier ⁠has been the power sector. As wind and solar generation expand, the variability of renewable energy has created a growing need for flexibility. Batteries have emerged as one of the most effective tools to provide it. Utility-scale battery storage projects are now being deployed to balance supply and demand, provide grid stability and store excess renewable generation for later use.

What began as a niche solution for frequency regulation has expanded into a broad set of applications across ⁠modern power systems. In many markets, battery systems are now cost-competitive with traditional gas-fired peaking plants for certain uses, according to the IEA — a shift that would have been unimaginable a decade ago.

This has elevated batteries from mobility technology to core infrastructure. POWER POLITICS

Government policy has played a crucial role in accelerating that transition. Climate targets have pushed electrification higher up national agendas, while industrial policies have sought to localize battery manufacturing. In the U.S., the Inflation Reduction ​Act provided incentives for domestic production and supply chain development. The European Union has introduced its own battery regulations and investment frameworks, while China has spent years building dominance across the battery value chain.

The result is a global race not only to deploy batteries, but to produce them — and to secure the materials needed to make them. Batteries have ⁠thus become a rare technology that sits at the intersection of climate policy, industrial strategy, and geopolitical competition.

GROWING PAINS Yet the move to the mainstream has not been frictionless.

Raw material supply remains a persistent concern, with lithium and other key inputs subject to price volatility and geographic concentration. Environmental and social issues tied to mining have also drawn increasing scrutiny, raising questions about how sustainable battery supply chains truly are.

At the same time, technical challenges remain. Energy density improvements are slowing, safety risks — though manageable — ⁠persist, ​and recycling systems are still scaling up to meet future demand. These constraints are shaping the next phase of the battery story rather than halting it.

As the industry matures, it is also diversifying. Lithium iron phosphate (LFP) batteries are gaining market share in cost-sensitive applications, while alternatives such as sodium-ion are beginning to emerge for certain uses. Research into solid-state batteries continues, promising potential gains in safety and performance, though commercial timelines remain uncertain.

Meanwhile, new use cases are expanding the market further. Batteries are increasingly being deployed in homes, businesses, and industrial settings, creating a more distributed and flexible energy system. Recycling is also set to become a major component of the industry, both to reduce environmental impact and to secure supply chains over the long term.

FROM INNOVATION TO INFRASTRUCTURE The most important shift, ⁠however, may be conceptual.

Batteries are no longer viewed primarily as an emerging technology. Instead, they are increasingly seen as infrastructure — embedded, essential and taken for granted. They underpin the devices people use, the vehicles they drive and the grids that power their economies. Their significance lies not just in what they can do individually, but in how they enable broader systems ⁠to function.

In that sense, the rise of batteries mirrors that of earlier foundational technologies: from railways to ⁠electricity networks to the internet. The innovation phase is not over, but the center of gravity has moved. The key questions are now about scale, integration, and control — who builds batteries, where they are deployed, and how they shape the global energy system.

What began as a niche technology has become a central pillar of modern life. And as the energy transition accelerates, batteries are set to play an even more prominent role — not on the margins, but at the heart of it. (The opinions expressed here are those of the author, a columnist for Reuters.) Enjoying this ‌column? Check out Reuters Open Interest (ROI), your essential new source for ‌global financial commentary. Follow ROI on LinkedIn and X. And listen to the Morning Bid daily podcast on Apple, Spotify, or the Reuters app. Subscribe to hear Reuters journalists discuss the biggest news in ​markets and finance 7 days a week.