The FBI CRC is Australia's biggest battery industry peak body, with about 60 industry participants alongside eight universities, the CSIRO and federal and state governments.
It has published an in-depth study that says new minerals projects will be key to accelerating battery manufacturing and processing in the short-to-mid-term.
The report calls for battery hub developments across resource rich states and territories, warning that without such hubs, investment may be taken by other regions such as the US and Europe where collaborative hubs are becoming the norm.
FBICRC chief executive Stedman Ellis said the report showed there was no "one size fits all" approach to hubs development.
He said a "sound understanding" of regional assets, industry needs, competiveness challenges and global trends was required.
"Australia has a strong value proposition in meeting the rapidly growing demand for batteries, and a desire to diversify supply chains and to demonstrate high standards of environmental social governance performance," Ellis said.
"The momentum is evident with the emerging technical grade battery chemicals industry in Kwinana and Kemerton in Western Australia."
The report lays out several actions that can be taken to encourage investment, in both the upstream, midstream and downstream battery supply chain markets.
Incentives include tax benefits for mining companies as well as expediated permitting processes that allow battery minerals producers to obtain permits within just two weeks in some regions.
It notes that while other hubs are already being established in North America, this is partly due to attracting "anchor tenants" to accelerate projects through similar incentives.
FBI CRC found Australia already had a market for battery minerals in Japan, which has a lack of mineral resources leaving it dependant on imports.
It said challenges in sourcing minerals would open opportunities for Australia firms to receive Japanese government funding.
"[Australia] holds much of the worlds' raw battery minerals, and has a stable political environment to ensure secure supply for other nations," it said.
"But there are two key challenges for Australia."
First is the distance to battery consumer markets - such as renewable energy storage manufacturers in the US, Europe and parts of Asia.
That is why it makes sense for a battery manufacturing industry domestically.
Second, is the scale of policy measures and funding by other competitive governments - the UK and Europe in particular.
Australia by comparison only provides "limited support".
The key lessons from international case studies was that while Europe and the UK did not offer the cheapest labour, it collaborated to identify a path for competitive advantages.
"Similarly, an advanced manufacturing battery hub in Australia must be based on competitive advantages," FBI CRC said.
The key advantage in Australia's context is its battery mineral wealth.
"Australia's natural endowment in the minerals needed for advanced battery manufacture must be viewed as an intergenerational opportunity to develop future industries," FBI CRC said.
"But, successful market entry means investing in decarbonising futures and battery technology research and development to build capacity at easy wins points of the battery chain."
"It requires thinking beyond current national income or gross domestic product to realise the assets of Australia's national wealth."
FBI CRC noted in its report that Australia had a strong and extensive base in mining and mineral knowledge as well as a well-skilled mining sector.
This was a competitive advantage, compared to other countries looking to develop battery minerals projects.
It called on member companies, which include the likes of BHP, Lynas Corporation, Blackstone Minerals, Alpha HPA, and Lithium Australia, to start investigating venture capital raising potential for a minerals processing and battery manufacturing hub.
The next steps the FBI CRC will take will include an overall analysis and feasibility of a hub along with geographical studies.
