The manufacture of lithium ion batteries requires some processing steps to be carried out in a dry room, where the moisture content should remain below 100 parts per million. The design and operation of such a dry room adds to the cost of the battery. This paper studied the humidity management of the air to and from the dry room to understand the impact of design and operating parameters on the energy demand and the cost contribution towards the battery manufacturing cost. The study was conducted with the help of a process model for a dry room with a volume of 16,000 cubic meters. For a defined base case scenario it was found that the dry room operation has an energy demand of approximately 400 kW. The paper explores some tradeoffs in design and operating parameters by looking at the humidity reduction by quenching the make-up air vs. at the desiccant wheel, and the impact of the heat recovery from the desiccant regeneration cycle.