The Battery Decision is a Business Decision
According to Morgan Stanley's 2021 projection, the global battery economy is on track to exceed $525 billion by 2040. How organizations understand and manage the assets they deploy (i.e., batteries) will determine how well they capture that value.
Electrification economics aren’t just about engineering. Batteries are a business asset with financial consequences that ripple across operations, capital planning, product development, and supply chain strategy. Yet, battery discussions tend to gravitate toward hardware and chemistry, such as energy density, cycle life, and cost per kilowatt-hour — often missing the forest for the trees.
Let’s explore what managing electrification economics looks like in practice and how to get ahead by gaining visibility into the complete, long-term picture.
The structural problem hiding in plain sight
Organizations electrifying high-value, high-stakes systems, such as industrial, grid storage, defense, and medical equipment, often don't have the volume of an Apple or Tesla to justify dedicated battery engineering teams or custom cell programs. They rely on suppliers for state-of-health (SoH) assessments, replacement-cycle guidance, and longevity projections.
However, suppliers are incentivized to sell more batteries rather than helping buyers maximize the lifecycle value of assets already in the field. They provide general information and conservative recommendations, while most buyers can’t independently verify asset health.
The result is safe, but flying blind means most organizations fail to optimize energy storage ROI:
Maintenance schedules are inherited from supplier documentation rather than derived from real operating conditions. Replacement cycles are set by convention rather than real-time cell condition. Capital planning runs on generalized assumptions that organizations can’t validate against real-world operating conditions.
Meanwhile, when the product roadmap changes or the supply chain is disrupted, companies discover their battery decision wasn't a component selection but a locked-in dependency with no designed-in exit.
Go deeper: Download the Benefits and Caveats of Electrification in the Industrial Sector white paper.
The hidden cost of not knowing
Most deployed battery systems report aggregate metrics, such as pack-level voltage and rough state of charge. But they can't surface the multi-dimensional performance profile that helps operators determine whether a battery is fit for purpose in a specific application.
Remaining useful life isn't a single number: A cell's ability to handle surge loads degrades differently from its capacity for continuous discharge, while thermal behavior under load is another separate measurement. When operators can't see across these dimensions at the cell level, they add buffers to handle the uncertainty.
For example, we measured over a thousand discarded battery packs from commercial retail equipment and found that 95% of cells retained more than 98% of their original designed capacity. They were replaced simply because operators didn’t have the technology to predict which ones might fail and when.
On the flip side, cost can also be high when an operator doesn’t realize the importance of monitoring and maintaining the battery system.
For instance, during the COVID-19 pandemic, a significant portion of ventilators in the U.S. national stockpile couldn't be deployed because their batteries had degraded past usefulness. The result was catastrophic without an expensive “just in case” maintenance strategy or the ability to track each battery’s SoH.
The cost of not knowing accumulates in three directions: premature replacement waste, suppressed revenue from overly conservative operations, and capital planning inaccuracies that compound across a portfolio over time. None of them shows up on the ledger, but they can quietly erode profitability.
Go deeper: Download the Tanktwo Battery AI: A Self-Learning System for Global Electrification white paper.
Visibility and predictive analytics turn risk avoidance into risk pricing
Risk avoidance is the only rational posture when organizations can’t quantify battery SoH. However, the calculus changes when degradation becomes observable at the cell level, in real time, across multiple performance dimensions.
Operational decisions stop being a binary choice between "safe" and "risky" and become a quantified trade-off between known costs and returns. A BESS operator who can characterize real-time cell conditions can dispatch more aggressively when market demand and asset health warrant it, and pull back when they don't — not as blanket policy, but as a dynamic, context-driven decision.
But how? We can’t expect a business decision-maker, operator, or field technician to grasp the complexity of battery technology, such as cathode chemistry or power electronic engineering.
Enters Tanktwo’s battery lifecycle index. This composite, continuously updated rating of battery asset health synthesizes specialist inputs, including cathode degradation models, electrolyte decomposition algorithms, and power electronics junction analysis, into a high-level number decision-makers can act on.
It’s like a credit score, but forward-looking. For instance, the same cell operating in Bakersfield for four years at high heat and heavy load might have a 30% remaining useful life forecast under current conditions. If it’s redeployed to a cooler, lighter-duty application in Santa Monica, the forecast might jump to 50%. The system quantifies the different contexts to maximize asset ROI — allowing organizations to treat batteries as an asset class rather than an expenditure.
Go deeper: Download The Brave New World of the Global Battery Economy white paper.
What a software-defined approach changes
Software-defined batteries (SDBs) enable operators and decision-makers to go beyond passively consuming information on a dashboard. Rather, it allows them to control a battery's behavior, including cell routing, voltage output, chemistry tolerance, degradation management, in real-time through a software interface.
The agility makes the lifecycle index actionable. For example, the Tanktwo Battery Operating System (TBOS) leverages real-time data insights to detect a degrading cell, isolate it without taking apart the pack, and automatically reroute the strings to maintain performance.
The capabilities enable a fundamentally different operational model, where the intelligence layer does what a maintenance team can't do manually at scale, in real time, across multiple fleets and locations.
SDBs also change the product development calculus. Instead of freezing a battery architecture early and designing everything else around it, builders and operators can configure output characteristics any time via the software, accommodate different chemistries as supply chains shift, or extend asset ROI by making “second life applications” truly executable.
The organizational capability that separates winners from laggards
Organizations that consider batteries as an asset class, rather than an isolated engineering exercise, will win the electrification game.
Finance and engineering share a common model of lifecycle economics.
Operations use real-time asset intelligence rather than maintenance schedules inherited from procurement.
Product teams design for configurability rather than lowest first cost.
Engineers build supply chain flexibility into the architecture from day one rather than scrambling for materials when a supplier disappears.
Reframe your battery strategy as a business decision
Tanktwo's Battery Strategy Workshop helps organizations move from reactive battery management to a data-driven asset intelligence model. Whether you're designing a new electrified product, managing an existing fleet, or planning capital allocation for battery-dependent infrastructure, we help you set the stage for long-term success. Learn more and get in touch.
