In easier times, procurement was a back office function focused on price and availability. But, James Snodgrass argues, geopolitics, regulation, ESG scrutiny and galloping technological progress (particularly in the area of AI) has turned procurement into a frontline discipline.
Battery procurement used to be discussed in relatively simple terms: securing cells, components or materials at the right price, from a supplier capable of delivering them on time. That world has not disappeared, but it now looks dangerously incomplete.
Procurement has become a delicate balancing act: weighing cost against chemistry, engineering performance, regulatory compliance and supply chain resilience. Every supplier decision carries technical and strategic implications. A cheap cell might become expensive if its datasheet is unreliable. Another low-cost component could pose a risk if it’s tied to a vulnerable region or a single supplier desperately hiding a looming bankruptcy. And a promising chemistry might appear less appealing if its upstream footprint can’t withstand ESG scrutiny.
That change is being driven by the structure of the battery industry itself. The International Energy Agency has tracked a continuing concentration of battery supply chains, with China accounting for well over half of global raw material processing for lithium and cobalt and almost 85% of global battery cell production capacity. At the same time, demand for battery materials continues to grow rapidly, with lithium demand rising by nearly 30% in 2024 alone, according to the IEA’s Global Critical Minerals Outlook 2025.
Regulation adds another layer of frustration. The EU Batteries Regulation is pushing the sector towards lower carbon footprints, reduced use of harmful substances, fewer primary raw materials and stronger end-of-life obligations. For procurement teams, that means supplier selection is increasingly tied to documentation, audit-ability and lifecycle data, not just commercial terms.
OM Batteries develops drive and auxiliary batteries for EVs, heavy machinery, UAVs (drones), industrial robots, tools and back-up applications, with services spanning design, testing, production, certification and supply chain work. For Fergal Harrington-Beatty, the company’s CCO, risk management starts with diversity.
Harrington-Beatty said: “We mitigate risk exposure to political instability, ESG concerns and price volatility by ensuring we have a diverse battery cell supply chain, both in chemistry (LFP & NMC), format (pouch, prismatic, cylindrical) and country of origin (China, Korea, Europe, USA).”
Diversification is not equally straightforward across all cell types. Harrington-Beatty says that 2170 cylindrical cells are easier to benchmark because the format is standardised and performance becomes the principal differentiator. Pouch cells, on the other hand, are more complex because standardisation is weaker, although some sub-sectors – such as UAVs – are beginning to consolidate around particular sizes.
That distinction matters because battery procurement is rarely a matter of buying a commodity item from a catalogue. Chemistry, format and application are interdependent. The cell that looks attractive for one market may be unsuitable for another, either because the form factor does not fit, the compliance burden differs, or the pack architecture requires a different supplier relationship.
Alexander Battery Technologies (ABT) has been manufacturing battery packs for OEMs for more than 40 years. ABT’s purchasing manager Calvin Fahey sees the challenge as one of identifying risk early in the process. His objective is not just to react when a disruption hits, but to understand where the vulnerabilities lie before they become operational problems.
“We avoid becoming too reliant on a single supplier or region wherever possible and keep a close eye on market conditions that could affect availability or pricing,” said Fahey. “Building strong relationships with suppliers also helps because open communication means we’re often aware of potential issues early enough to react.”
Diversification isn’t simply a matter of adding suppliers: resilient procurement is about information flow: suppliers who communicate constraints, design changes, lead times or price pressure early can give battery companies room to manoeuvre. Suppliers who remain opaque up until the point of failure can turn a manageable issue into a production crisis.
Eqonic is a British battery technology company providing battery energy storage systems and sustainability consulting, with LFP-based systems for residential, commercial and industrial applications. Eqonic’s founder Jas Kandola describes a similar approach, but with a stronger emphasis on chemistry and long-term exposure. Eqonic spreads its supplier base across multiple regions, monitors geopolitical and ESG demands, and invests in R&D into alternative battery chemistries to reduce reliance on volatile commodities such as lithium and rare-earth metals.
“Where we can, we choose materials and technologies that give us more stability long-term, lower ESG risk, and less exposure to global price swings,” Kandola said.
The procurement challenge is different for Cognition Energy. As a company providing cell testing services, and manufacturing battery testing products, it is not primarily exposed to upstream raw cell materials in the same way a cell manufacturer might. Its exposure sits more in precision components and electronics for its cell test fixtures and CellPod equipment. But founder Tom Cleaver says price volatility still has a direct commercial effect: “Because we spot buy, we have to minimise validity periods for customer quotes to ensure that our supplier quotes remain valid. Speed of response on quoting is something we’ve built into how we operate.”
The practical reality for smaller, specialist battery companies is that procurement risk is not confined to lithium, cobalt, nickel or graphite. The risk also affects electronic components (RAM, CPU and GPU prices are soaring thanks to AI-data centre demand), machined parts, fixtures, test equipment, fabrication equipment and other supporting components. In such situations, mitigation strategies might not involve hedging or off-take agreements but instead involve stricter quoting discipline and quicker internal processes.
Technical collaboration
In the battery industry, suppliers need to do more than just deliver to specification; they need to participate in iteration.
Harrington-Beatty says that a supplier’s capacity for customisation, engineering feedback and product development cannot be properly evaluated through a conventional buyer-supplier relationship. It requires closer collaboration, often formalised through a memorandum of understanding.
Battery cells are complex products to manage. A pack using them is rarely optimised in its first or second iteration. A strong technical feedback loop with suppliers can therefore accelerate delivery and improve the eventual product, he said.
ABT’s Fahey concurs on the importance of collaboration with suppliers:“A supplier’s technical capability is just as important as their commercial offering. ABT looks at how willing suppliers are to engage with engineering teams, how quickly they respond to design changes and whether they can offer practical feedback that improves the final product.
“The best supplier relationships feel like partnerships rather than purely transactional arrangements.”
That is particularly true where battery systems are being designed for demanding sectors such as medical devices, e-mobility, UAVs, robotics, industrial tools or test and measurement. OEM customers are not simply buying stored energy. They are buying performance, safety, service life, manufacturability and compliance in a defined form factor. Procurement therefore becomes a function of engineering assurance.
Cognition Energy takes a cautious, incremental approach to supplier qualification. Cleaver said the company qualifies suppliers once it finds them, often by sending small jobs first and building a working relationship before moving to production work. The process is time-consuming, but for a company dealing in precision test equipment, the cost of poor supplier selection is too high.
Eqonic’s approach is formalised through technical due diligence. Kandola said the company looks at engineering readiness, responsiveness to design changes, prototyping capability, R&D set-up and a supplier’s track record of collaboration: “Ultimately, we want suppliers who’ll work with us dynamically: giving feedback, adapting designs, and helping us keep improving the product over its lifecycle,” he says.
Managing compliance
The third procurement frontier is compliance. Here again, the answers point in a similar direction, in that compliance must be designed into supplier management early, not bolted on after the product is ready.
Harrington-Beatty said compliance can be country, sub-sector and application specific, and sometimes all three. The company therefore begins with a detailed look at requirements during the customer’s battery design phase, allowing compliance work to run in parallel with design tasks.
Fahey says that ABT builds compliance into supplier management from the start of the process, through onboarding assessments, certification reviews and continuing engagement as regulations evolve.
For UK-based Cognition Energy, geography affects the method. Cleaver said the company prefers UK suppliers for fabrication and components where possible, allowing in-person visits. For suppliers further afield, ISO standards become more important.
“This is why standards exist after all; they allow a global supply chain to function without boots on the ground everywhere,” said Cleaver.
Eqonic goes further into formal ESG governance. Kandola said the company runs periodic supplier audits, requests carbon-intensity and sustainability reporting, expects suppliers to meet ethical sourcing standards and uses third-party verification where possible. Suppliers must also sign up to Eqonic’s code of conduct, covering environmental responsibility, labour standards and governance.
This signifies a wider shift in battery procurement. Audit-ability is becoming a commercial asset. Customers, regulators and investors want to know not only what a battery can do, but where it came from, how it was made, what its carbon footprint is and whether its supply chain can be defended.
AI: procurement’s fourth and final frontier?
When it comes to the role of AI in procurement, our interviewees’ views were more divided. Eqonic was the most enthusiastic adopter among the companies interviewed – Kandola said the company uses AI tools to model supplier risk, forecast demand, track price volatility and support compliance checks. He sees AI as a way of gaining better visibility across multi-tier supply chains and identifying optimisation opportunities in a timely manner.
Fahey also sees AI beginning to influence procurement, particularly in data analysis, trend identification, forecasting and repetitive administrative work. But he believes it is not a substitute for human judgement: “Procurement still relies heavily on relationships, negotiation and understanding the wider commercial picture. AI can support better decision-making by providing insights, but the final decisions still depend on people who understand the business, the suppliers and the risks involved.”
AI does not currently play a role in the OM Battery’s procurement strategy, although the business uses tools such as Claude and Fireflies elsewhere in the enterprise. Harrington-Beatty explained: “AI cannot itself benchmark battery cells and the datasheets provided by cell manufacturers are still notoriously unreliable, so there is still no replacement for getting hold of sample cells and running our own test profiles to ensure the best quality for our customers.”
Cleaver shares this scepticism about test data and engineering trust. Cognition Energy prefers to find suppliers through word of mouth or trade references before committing. And once components arrive, physical inspection remains essential, particularly for the precision parts that go into cell holders and test equipment.
“AI might speed up paperwork, but it has limits,” said Cleaver.
AI may help procurement teams with pattern recognition, forecasting, documentation and administrative efficiency. It will almost certainly become more useful as supply chains become more complex and compliance data requirements grow. But it cannot yet replace cell testing, engineering judgement, supplier trust or the old-fashioned business of looking closely at the thing that has just arrived in the post.
For battery companies, procurement has become the interface between the market and the product. It must read commodity signals, understand regulation, assess supplier capability, support engineering iteration and protect customer programmes from disruption.
The lowest price may still win some orders. But in an industry shaped by volatile materials, concentrated supply chains, rising regulation and rapid product development, the better question is no longer simply what a supplier charges. It is what risk the supplier removes – or quietly introduces – over the life of the battery.
