The Race Towards Solid-State Batteries: What’s Happening and What's at Stake for the Future of Electric Vehicles?

Twenty-five years ago, as part of a World Business Council for Sustainable Development initiative, I explored sustainable mobility options together with a team of renowned international experts. Electric batteries weren't even on our radar then.

Eighteen years ago, I remember asking an engineer from a leading OEM about electric batteries for cars. His response? "The storage capacity is too limited due to physics." Fast forward to today, and the landscape has transformed dramatically.

We're now in a global race to develop and mass-produce solid-state batteries, a technology promising to revolutionise electric vehicles with ranges comparable to conventional cars and charging times of just 10-15 minutes. The stakes couldn't be higher.

The EU, through its European Battery Alliance, has attracted €100 billion in investments and is building a network of gigafactories. The US has allocated $2.8 billion to expand domestic battery manufacturing, while China dominates with 77% of global battery production capacity.

This competition isn't just about technological superiority; it's about shaping the future of mobility, energy storage, and even geopolitics. As someone who's witnessed the evolution of this industry firsthand, I'm amazed by how far we've come and excited about the transformative potential of solid-state batteries. The future of sustainable transportation is unfolding before our eyes, and it's more promising than ever.

In the rapidly evolving landscape of electric vehicles (EVs), the quest for more efficient, safer, and sustainable energy storage solutions is paramount. Among the most promising advancements is the development of solid-state batteries. As industry leaders, startups, and global players race towards perfecting this technology, it’s essential to understand why this innovation is crucial and what the ultimate outcomes might be.

In this edition of our newsletter, we’ll delve into the significance of solid-state batteries, the key players in this race, and the potential impact on the automotive industry and beyond.

The Promise of Solid-State Batteries

Solid-state batteries represent a significant leap forward from the current lithium-ion technology. Unlike conventional batteries, which use liquid electrolytes, solid-state batteries employ solid electrolytes. This fundamental change offers several compelling advantages:

• Higher Energy Density: Solid-state batteries can store more energy in a smaller space, potentially doubling the range of electric vehicles.
• Improved Safety: The absence of flammable liquid electrolytes reduces the risk of battery fires, a critical safety enhancement for EVs.
• Longer Lifespan: These batteries are less prone to degradation, promising longer operational life and reducing the need for frequent replacements.
• Faster Charging: Solid-state technology could enable much faster charging times, addressing one of the primary consumer concerns regarding EVs.

Current Challenges and Industry Efforts

Despite their potential, solid-state batteries are not yet ready for mass production. The primary challenges include:

• Manufacturing Scalability: Developing cost-effective methods for producing solid-state batteries at scale remains a significant hurdle.
• Material Stability: Ensuring the long-term stability of solid electrolytes is crucial for the reliability of these batteries.
• Cost: Current production costs are high, making it difficult for solid-state batteries to compete with established lithium-ion technology.

Key Players in the Race

Startups Leading the Charge

Several innovative startups are at the forefront of solid-state battery development:

• QuantumScape: Based in California, QuantumScape is one of the most prominent names in the solid-state battery space. Backed by Volkswagen, the company has made significant strides in developing high-energy-density batteries and is targeting commercialization within the next few years.
• Solid Power: This Colorado-based startup has partnerships with Ford and BMW. Solid Power focuses on developing solid-state batteries that are safer and more energy-dense than current lithium-ion solutions.
• SES (formerly SolidEnergy Systems): With roots in both the U.S. and China, SES is working on hybrid lithium-metal batteries that blend aspects of solid-state and traditional lithium-ion technologies. They aim to achieve mass production by mid-decade.

Established OEMs Making Bold Moves

• Toyota: A pioneer in hybrid technology, Toyota is also a leader in the solid-state battery race. The company aims to showcase a prototype EV with solid-state batteries by the mid-2020s, promising significant improvements in range and charging time.
• BMW: In collaboration with Solid Power, BMW is investing heavily in solid-state technology, planning to integrate these advanced batteries into their next generation of electric vehicles.
• Volkswagen: Through its investment in QuantumScape, Volkswagen is betting on solid-state batteries to enhance the performance and safety of its future EV lineup.

China’s Ambitious Push

China, a dominant player in the global battery market, is also heavily invested in solid-state technology:

• CATL (Contemporary Amperex Technology Co. Limited): The world’s largest battery manufacturer, CATL is exploring solid-state technology to maintain its market leadership and support China’s aggressive EV adoption goals.
• BYD: Known for its comprehensive approach to EV manufacturing, BYD is also researching solid-state batteries to enhance the performance and safety of its electric vehicles.
• Ganfeng Lithium: As a leading lithium producer, Ganfeng is investing in solid-state battery technology to diversify its product offerings and capitalize on the next generation of battery advancements.

Political Support: Key Drivers

European Union

European Battery Alliance (EBA)

Launched in 2017, the EBA has been instrumental in building up battery technology and production capacity in the EU. It has attracted around 440 industrial actors and €100 billion in investment commitments.

Horizon Europe

Includes a battery partnership to allocate EU funding for research activities along the value chain. A €3 billion financial stimulus under the EU Innovation Fund was recently announced to boost the growth of the EU battery value chain.

BATT4EU Partnership

This €925 million public-private partnership for battery research and innovation was launched in 2021.

United States

National Blueprint for Lithium Batteries:

Released in June 2021, this blueprint outlines a strategic vision to support long-term U.S. economic competitiveness, enable decarbonization goals, and meet national security requirements. It emphasizes enhancing the resilience of battery supply chains and advancing battery technology through research and development (R&D).

China

Government Investments:

China has invested heavily in the battery sector, with over $230 billion in subsidies from 2009 to 2023. These subsidies have supported buyers' rebates, sales tax exemptions, and extensive research and development (R&D) activities. Specifically, China has directed an estimated $25 billion towards R&D in the EV industry during this period.

Solid-State Battery Research:

China is making significant strides in solid-state battery technology, considered the next-generation battery solution. The government has committed over 6 billion yuan (approximately 766 million euros) to fund solid-state battery research. Key players such as CATL, BYD, and Nio-backed WeLion New Energy Technology are part of this initiative.

Formation of Consortia:

In January 2024, China established the China All-Solid-State Battery Collaborative Innovation Platform (CASIP), bringing together government, academia, and industry leaders like CATL and BYD to commercialize solid-state batteries by 2030.

The Ultimate Outcome: Transforming the EV Landscape

The successful development and deployment of solid-state batteries could be transformative for the automotive industry and beyond:

• Enhanced EV Adoption: Higher energy density and faster charging will make EVs more appealing to consumers, certainly accelerating the transition from internal combustion engines.
• Sustainability Gains: Longer battery life and improved safety reduce environmental impact and resource consumption, aligning with global sustainability goals.
• Economic Impacts: The shift towards solid-state batteries could lead to the emergence of new industries and job opportunities, reshaping the economic landscape.
• Technological Advancements: Innovations in solid-state technology may spill over into other sectors, driving advancements in consumer electronics, renewable energy storage, and more.

The race towards solid-state batteries is more than just a technical challenge; it’s a pivotal moment in the evolution of electric vehicles and sustainable transportation. As startups, established OEMs, and global players like China continue to innovate and overcome current barriers, the potential benefits are enormous, promising a safer, more efficient, and environmentally friendly future for mobility and it will create winners and losers.

The winners in this race will be those companies that not only recognise the importance of this challenge but also develop and execute a robust strategy to meet it. They will harness the full potential of their managers and experts, leveraging existing competencies and pushing the boundaries of innovation. The future potential of battery technology for sustainable transportation is unfolding before our eyes, and it's more promising than ever. The companies that master this will not just lead the market; they will redefine the future of mobility.

What are your views on the importance, status and outcome of the global race towards solid-state batteries?

Top 5 Sources of Information

1. Solid State Battery Companies and Startups - GreyB
2. 6 Ways Solid-state Batteries Are Better than Lithium-ion Ones - CPI
3. Solid State Battery vs Lithium Batteries: The Future of EVs - Cardino.de
4. Solid-state batteries for electric mobility - Fraunhofer IFAM
5. Solid-State Batteries: The Future Of Electric Vehicle Power - EMobility+