The European lead–acid battery industry has been adversely affected by the collapse of the telecommunications and information technology expansion of the last several years and by general economic conditions in other sectors. This has had a substantial effect on the industrial battery market, particularly standby batteries, but the automotive business has been less affected. The industry has reacted to these continuing changes by consolidation and specialisation within the different sectors but this alone is insufficient to ensure future success. The industry faces significant challenges to improve efficiencies through better manufacturing systems, but the development of new products for both existing and future applications is the greater priority. Advanced automotive batteries for Powernet applications and for hybrid electric vehicles, new types of standby and traction batteries and improvements to automotive batteries can all be achieved with lead–acid technology. This is a system with enormous potential for further improvement building on current strengths. This is a challenge to which the industry must respond in order to underpin the lead–acid battery as the most important electrical energy storage system.