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EU Invests €1.8 Billion to Strengthen Battery Raw Material Supply Chain
Recently, the European Commission announced a plan aimed at promoting robust and sustainable development in the automotive sector while unlocking innovation capabilities. The initiative will allocate €1.8 billion (approximately 141 billion RMB) to develop a competitive battery raw material supply chain, supporting the production of electric vehicle battery cells and components through direct funding and other means. This plan builds on the “Future Strategic Dialogue for the European Automotive Industry” launched by the European Commission in January, which seeks to enhance the competitiveness of European automobile manufacturers through collaboration, targeted financing, and regulatory simplification. Furthermore, the EU plans to introduce relevant legislative measures this year to establish manufacturing standards for electric vehicle batteries and components.
Challenges Facing Solid-State Battery Mass Production
Recently, Miao Wei, a member of the National Committee of the Chinese People’s Political Consultative Conference and former Minister of Industry and Information Technology, stated at the Second China All-Solid-State Battery Innovation Development Summit Forum that the industrialization of solid-state batteries still faces three significant challenges: technology, processes, and costs. Based on the current global development of solid-state battery research, mass production techniques remain immature, with small-scale production expected around 2027. New energy vehicles are seen as a breakthrough for China’s automotive industry, leading the way for industrial transformation and upgrading. Power batteries are the most critical components for new energy vehicles, and solid-state batteries are identified as a key technological innovation crucial for the high-quality development of China’s new energy vehicle industry. Despite their notable advantages in safety and energy density, the industrialization process of solid-state batteries faces numerous hurdles.
Three Challenges of Solid-State Batteries
Compared to existing liquid batteries, solid-state batteries offer significant advantages in safety and energy density, promising to address two critical pain points for new energy vehicles: range and safety. Traditional automotive powerhouses such as the US, Europe, Japan, and South Korea are placing a high priority on the research and industrialization of all-solid-state batteries, aiming to leapfrog China’s power battery industry. Domestic enterprises are also increasing their investments in this area. Internationally, Toyota is expected to enter a practical stage for solid-state batteries between 2027 and 2028, with mass production anticipated after 2030. In South Korea, Samsung plans to commence mass production in 2027. Domestically, companies like SAIC, GAC, Chery, and BYD have announced timelines for solid-state battery mass production, with CATL focusing on sulfide routes and working on trial production of 20Ah samples, expecting small-scale production by 2027. Miao Wei emphasized that, overall, all-solid-state batteries require another two to three years before mass production can be achieved. Most of the solid-state batteries announced by certain companies as already mass-produced are primarily semi-solid batteries.
Miao Wei pointed out that the three major obstacles to achieving large-scale production of solid-state batteries are the maturity of technology, production processes, and high costs. He clarified, “It is essential to distinguish that semi-solid batteries still belong to the liquid battery category and should not be confused with solid-state batteries. It is incorrect to think that liquid batteries can evolve into solid-state batteries simply by reducing the amount of liquid electrolyte; they are fundamentally different concepts.” He believes that given the current global progress in solid-state battery research, the technology and processes are not yet mature, and it will generally take until around 2027 to achieve small-scale production, with mass production taking even longer.
Currently, the cost of liquid lithium-ion battery units is approximately 0.5 RMB per watt-hour. In contrast, solid-state batteries are relatively more expensive, with material costs exceeding 2 RMB per watt-hour without mass production. A 100kWh battery pack has material costs exceeding 200,000 RMB, significantly higher than existing liquid batteries. “Therefore, for a considerable time, liquid and solid-state batteries are likely to coexist in the market rather than one replacing the other.”
Battery Swapping: A New Path to Solve Charging Challenges
In addition to the development of solid-state batteries, Miao Wei also mentioned the battery swapping model as an effective solution to the challenges of slow and difficult charging for new energy vehicles. He believes battery swapping is an important measure for energy replenishment in new energy vehicles. The battery swapping model represents a new technology, business form, and mode for energy supply infrastructure, becoming one of the significant alternatives to charging. On one hand, battery swapping can alleviate charging difficulties, especially in scenarios such as highways, public transport vehicles, long-haul heavy trucks, mines, and ports. On the other hand, battery swapping can drive innovation in business models, including vehicle-battery separation, reducing consumer purchase costs and enhancing the resale value of used vehicles, while promoting interaction between vehicles and energy systems.
Miao Wei stated that battery swapping is a capital-intensive, high-investment, and long-term route that requires enhanced cooperation between industries and enterprises. Battery companies need to collaborate not only with vehicle manufacturers but also with financial and insurance sectors, while also focusing on technological research and innovation in business models to achieve sustainable development. Battery swapping can enhance charging efficiency and lower the purchase costs for consumers through vehicle-battery separation, while also contributing to improving the resale value of used vehicles. Companies like NIO and BAIC have already explored this field, while CATL has proposed ambitious plans to establish a broad battery swapping network to promote the healthy development of the new energy vehicle market.
Battery Recycling: An Essential Social Responsibility
By 2024, the cumulative sales of new energy vehicles in China are expected to reach 38.32 million, with the installed capacity of power batteries reaching 1,652 GWh and the comprehensive utilization of waste batteries at approximately 301,000 tons, accounting for about 10% of the new resource volume. The volume of retired power batteries is expected to rise annually, with estimates indicating that the retirement volumes will reach 377,000 tons and 1.06 million tons in 2025 and 2030, respectively. “Currently, the large-scale retirement of our power batteries has not led to significant social issues. Other than battery separators, materials such as positive and negative electrodes, electrolytes, and various metals have been effectively recycled. The main issue now is that individual waste recyclers have collected substantial amounts of retired batteries, while legitimate recycling enterprises are struggling to obtain enough,” Miao Wei called for the establishment of a sound battery recycling system to ensure proper handling of waste batteries. He specifically mentioned that frequent battery recycling activities through informal channels hinder legitimate recycling companies from acquiring sufficient retired batteries, which not only affects resource circulation but also poses safety risks. To address this, Miao Wei suggested expanding the scope of battery recycling to include electric bicycles and electric motorcycles; constructing a multi-channel collaborative recycling and utilization system for different types of batteries; increasing investments to support key technology development and promotion in battery recycling, and leveraging market mechanisms to empower leading companies in the industry.
Solid-state batteries, as one of the core technologies for new energy vehicles, face numerous challenges in their development but also present enormous opportunities. Additionally, the improvement of battery swapping models and battery recycling systems will provide solid support for the sustainable development of the new energy vehicle industry. Miao Wei hopes that in the future, all stakeholders will work together to promote the healthy and rapid development of the new energy vehicle industry, contributing to the goal of making China a powerful automotive nation.
20 Billion Yuan Investment! Launch of the All-Vanadium Flow Battery Industry Project in Fuxin, Liaoning
On March 17, during a concentrated commencement event for 62 projects in the city, the SANY Heavy Energy (Fuxin) Intelligent Manufacturing Industry Park project was launched in the Xin Qiu Economic Development Zone. This moment marked the initiation of several large-scale, high-tech projects designed to drive economic growth in the first quarter of the year. The projects being launched represent significant investments and are expected to create new wealth and hope for Fuxin’s future. This year, the city plans to construct 472 projects with a total investment of 91.5 billion yuan. Among these, 322 are newly started projects with a planned total investment of 55.8 billion yuan, and 150 ongoing projects with a planned investment of 35.7 billion yuan. The 62 projects commencing this quarter have a total investment of 19.7 billion yuan, covering various fields such as intelligent manufacturing, new energy, modern agriculture, livelihood security, and infrastructure.
Among the many projects, the Hengjiu Antai All-Vanadium Flow Battery Industry Project is noteworthy. Hengjiu Antai is a project company that implements the transformation of all-vanadium flow battery technology by Shenyang Hengjiu Antai. The company focuses on the core technology research and development of all-vanadium flow batteries and has successfully developed domestic ion-exchange membrane technology, eliminating reliance on imports, with product quality exceeding national standards. The project has a total investment of 2 billion yuan and will be constructed in three phases. The first phase is planned to be completed by the end of August this year, aiming to achieve production conditions by the end of the year, bringing triple value to the city in terms of industrial upgrades, upstream industry stimulation, and sustainable development.
According to Zhang Meng, Deputy Director of the City Development and Reform Commission and Director of the Energy Bureau, “In the past three years, Fuxin’s new energy industry has experienced rapid development, with large-scale wind power development generating numerous equipment orders, thus forming an initial scale of the new energy equipment industry chain, covering key components such as wind turbine mainframes, motors, hubs, gearboxes, and carbon fiber materials.”
“SANY Heavy Energy (Fuxin) Intelligent Manufacturing Industry Park and other projects have been launched, injecting strong momentum into the district’s high-quality development and signaling a proactive approach to project construction for the year,” said Bai Fuliang, District Mayor of Xin Qiu. The government will take a sense of urgency and responsibility to ensure that project construction yields solid results, contributing to the success of the year’s initiatives.
Hunan Petrochemical’s First Batch of High-End Petroleum Coke for Power Batteries Leaves the Factory
On March 11, Hunan Petrochemical produced its first batch of high-end petroleum coke specifically for power batteries, which was shipped via both rail and road to leading domestic power battery companies, marking a significant upgrade in the quality of Hunan Petrochemical’s petroleum coke products. This product is a core raw material for the negative electrode material of lithium-ion batteries, characterized by high purity and high conductivity, directly affecting the energy density and cycle life of the batteries. The performance of this product is at a relatively high level in China and is well-received by downstream customers, meeting the needs of high-end power battery manufacturing.
Since last year, Hunan Petrochemical has strengthened cooperation with refining and marketing companies, seizing opportunities in the booming lithium battery negative electrode material market. They have accelerated the trial production of storage coke while continuously optimizing the structure and process indicators of petroleum coke products. The quality of high-end negative electrode petroleum coke has stabilized, with a daily production capacity of up to 1,000 tons, receiving positive feedback from customers.
China Continues to Lead Global Battery Manufacturing and Technological Innovation
On March 5, the International Energy Agency (IEA) released a report stating that by 2024, global electric vehicle sales are projected to increase by 25% to 17 million units, with annual battery demand surpassing 1 terawatt-hour for the first time. Global battery manufacturing capacity is expected to reach 3 terawatt-hours, and if all announced projects are completed, battery manufacturing capacity could triple in the next five years. China remains the world’s leading battery producer, accounting for over 75% of global battery supply, while also leading in reducing battery production costs and achieving technological breakthroughs.
China: Technological Innovation Drives Scale
The IEA notes that the Chinese battery ecosystem encompasses all steps of the supply chain, from raw metal extraction and refining to battery manufacturing equipment and component production, leading to faster and more significant reductions in manufacturing costs. In 2024, the average price of batteries in China is expected to decrease by nearly 30%, being over 30% cheaper than batteries produced in Europe and more than 20% cheaper than those in North America. Chinese battery manufacturers continue to drive technological innovation, enhancing production efficiency and expanding capacity, thereby leading to a continuous increase in global battery production capacity. Since 2019, the influence of Chinese battery manufacturers in the global market has been on the rise, with their market share showing an upward trend. Currently, China leads globally in lithium iron phosphate battery technology, which was once deemed unsuitable for electric vehicles due to its lower energy density. However, continuous technological innovation has led to breakthroughs, achieving a balance between low cost and high safety.
According to data from the General Administration of Customs of China, cumulative exports of lithium iron phosphate from China are expected to reach 3,285.22 tons in 2024, a year-on-year increase of 182.62%.
US and Europe: Weak Supply Chains
The IEA reported that since the US implemented a battery production tax credit in 2022, its manufacturing capacity has doubled, reaching over 200 GWh in 2024, with nearly 700 GWh of additional capacity under construction. Approximately 40% of existing capacity is operated or developed in close collaboration with mature battery manufacturers and automakers. However, overall progress in domestic battery component manufacturing in the US has been slow, with most anode and cathode demands still reliant on imports. In Europe, battery production costs are approximately 50% higher than in China, and the battery supply chain ecosystem is relatively weak, with a severe shortage of skilled professionals. Many battery manufacturers in Europe have postponed or canceled plans to expand production lines due to uncertain profitability. The largest battery manufacturer in Europe, Northvolt, filed for bankruptcy protection last November, highlighting the fundamental challenges Europe faces in promoting energy transition through localized production. Large-scale battery production is capital-intensive and technically complex, requiring years to enhance capacity—ambition and policy support alone cannot bridge the technological and experiential gaps.
Japan and South Korea: Limited Domestic Capacity
The IEA highlighted that, over the past two years, South Korean battery manufacturers have seen their market share in the EU drop by 25%, from nearly 80% in 2022 to 60% in 2024. In contrast, Chinese battery manufacturers continue to expand their influence in the European market through partnerships and joint ventures, accelerating the application of lithium iron phosphate batteries and aiding in the improvement of Europe’s battery supply chain ecosystem. South Korea and Japan, as major players in the global battery industry, have key battery manufacturers focused on lithium nickel manganese cobalt oxide battery production and supply. However, both countries have limited domestic battery production capacity and have established numerous mature production lines overseas. South Korean battery manufacturers possess nearly 400 GWh of overseas capacity, while Japanese manufacturers have 60 GWh. By 2024, over 20% of global demand for electric vehicle batteries is expected to come from South Korea, with approximately 7% from Japan.
Global Industry Development Enters a New Phase
The IEA states that falling prices for battery raw materials and ongoing technological innovations are driving the global battery industry into a new development phase, accelerating the shift from regional markets to a global market. Looking ahead, factors such as economies of scale, supply chain collaboration, manufacturing efficiency, and technological innovation will further propel the battery industry towards larger-scale consolidation. Countries in Southeast Asia and Morocco are emerging as potential production centers for batteries and their components. Indonesia, holding half of the world’s nickel reserves, will see its first electric vehicle battery manufacturing and graphite anode plants start production in 2024. Morocco, with the largest phosphate reserves, which is essential for lithium iron phosphate batteries, is also in a strategic position.
The IEA notes that the price of battery packs for pure electric vehicles has dropped below $100 per kWh, a crucial threshold for competing with traditional vehicles in terms of cost. Goldman Sachs predicts that by 2026, electric vehicle battery costs could fall nearly 50%, with average prices dropping from $149 per kWh in 2023 to about $80 per kWh in 2026, bringing the total cost of ownership for electric vehicles in line with traditional gasoline vehicles, achieving a parity of fuel costs.
Another significant factor affecting battery costs is the prices of major metals like lithium and cobalt, which account for 60% of battery costs. Prices for these metals have significantly decreased from their highs in previous years, with lithium prices dropping over 85% from their peak in 2022. Additionally, while solid-state batteries hold promise, they face challenges transitioning from lab-scale to mass production, meaning that current lithium-based technologies, particularly lithium iron phosphate batteries, will remain dominant. Goldman Sachs forecasts that the market share of lithium iron phosphate batteries will increase from the current 35% to 45% by 2025.
Countdown to Solid-State Battery Mass Production
On February 24, Mercedes-Benz commenced road testing for all-solid-state batteries, which boast an energy density of 450 watt-hours per kilogram. As one of the most promising “next-generation power batteries”, the solid-state battery industry is heating up, with multiple companies intensifying their mass production timelines. At the recent 2025 China All-Solid-State Battery Industry and Academic Research Collaborative Innovation Platform Annual Meeting, Ouyang Minggao, an academician at the Chinese Academy of Sciences and vice chairman of the China Electric Vehicle 100 Forum, estimated that “all-solid-state batteries will begin vehicle testing in 2027, with true large-scale production potentially taking 5 to 10 years, expected by 2030.”
Racing to Develop Solid-State Batteries
Solid-state batteries are not a completely new technology; Toyota began its research on solid-state batteries back in 2006 and recently announced plans for small-scale trial production by 2026 and large-scale production after 2030. Honda announced it will start trial production of all-solid-state batteries for electric vehicles in January 2025, while Nissan plans to begin trial production this year at its Yokohama factory, with plans to launch electric vehicles equipped with all-solid-state batteries by 2028. Japanese automakers, who are ahead in the solid-state battery race, are nearing the threshold of mass production. In response to this urgency, domestic battery manufacturers and automotive companies have activated acceleration modes. CATL plans to announce three solid-state battery patents in 2024 and has revealed a timeline for “small-scale mass production of all-solid-state batteries by 2027.” CATL has reportedly built a pilot production line for all-solid-state batteries and is optimizing processes and validating products. If safety and performance challenges can be resolved during this phase, they will subsequently enter the exploratory phase of production technology.
Huawei announced a new patent for sulfide solid-state batteries at the end of last year, named “Doped Sulfide Materials and Their Preparation Methods, Lithium-Ion Batteries.” Ouyang Minggao stated, “2024 will be a milestone year for all-solid-state batteries in China, with a rapid increase in the number of patents applied for since the second half of last year.” BYD’s Chief Technology Officer Sun Huajun noted that BYD began research on solid-state batteries in 2013 and has initiated feasibility verification for solid-state battery industrialization, covering key material technology breakthroughs, cell system development, and production line construction. Mass demonstration vehicle applications are expected to start in 2027, with large-scale commercialization after 2030. New energy vehicle manufacturers are also in pursuit; GAC Aion announced plans for mass production of all-solid-state batteries by 2026, to be first equipped in its high-end brand Haopai; Chery plans to achieve solid-state battery vehicle integration by 2026, with large-scale production anticipated in 2027; SAIC Group claims it will deliver mass-produced all-solid-state batteries in 2026, and vehicles equipped with these batteries by 2027; Changan Automobile plans to launch eight self-developed cell variations, including liquid, semi-solid, and solid-state batteries, by 2030.
As the trend of solid-state batteries rises, an increasing number of companies are stepping up. Wang Deqing, Chief Scientist of FAW Group and Director of the National Key Laboratory for High-End Automotive Integration and Control, stated that breakthroughs in key technologies for all-solid-state batteries have been achieved, and the industry is now at the prototype stage. Solid-state batteries with an energy density of 400 watt-hours per kilogram are expected to achieve small-scale vehicle applications within the next two to three years.
Technical Path Focus
The reason solid-state batteries have not yet become mainstream is not due to a lack of interest from companies, but rather the technological challenges involved. Solid-state batteries utilize entirely new structures and materials, resulting in more complex production processes and higher costs. “Significant progress has been made in solid-state battery research, but many foundational scientific and engineering challenges remain,” analyzed Sun Shigang, an academician of the Chinese Academy of Sciences and deputy director of the expert committee for the China All-Solid-State Battery Industry and Academic Research Collaborative Innovation Platform. The challenges primarily involve further enhancing the ionic conductivity of solid electrolytes, matching them with lithium metal and high-specific energy electrode materials, and constructing compatible and stable solid-solid interfaces. Finding suitable solid electrolytes is critical; ideally, solid electrolytes should possess high ionic conductivity, good chemical stability, and mechanical strength. Moreover, interface issues cannot be overlooked; poor contact between the electrode and electrolyte can lead to increased internal resistance, affecting overall battery performance. Besides technological and process challenges, high costs also limit the large-scale application of solid-state batteries. Currently, the cost of liquid lithium-ion battery units is about 0.5 RMB per watt-hour, while solid-state batteries are relatively high, with material costs exceeding 2 RMB per watt-hour. The material costs for a 100 kWh battery pack already exceed 200,000 RMB, significantly more than current liquid batteries.
Currently, there are multiple technological paths in the solid-state battery field, with polymer solid-state batteries, oxide solid-state batteries, and sulfide solid-state batteries being the three main streams. “Globally, the research and development of all-solid-state batteries is gradually focusing on sulfide technology, with sustained investment,” Ouyang Minggao suggested that the technological pathway for all-solid-state batteries should concentrate on sulfide electrolytes, matching high-nickel ternary positive electrodes and silicon-carbon negative electrodes with performance goals of 400 watt-hours per kilogram and a cycle life of over 1000 times, ensuring small-scale vehicle applications by 2027.
With the rapid iteration of global artificial intelligence technology, the combination of large language models and scientific intelligence is upgrading research and development platforms, serving as an accelerator for innovation and construction of key material systems for all-solid-state batteries. Traditional laboratory R&D processes often involve waste of time, materials, energy, and human resources. Chen Xinhong, CEO of Suzhou Yilai Kede Technology Co., Ltd., stated that the company is undergoing a transformation from trial-and-error experimentation to intelligent automated design, aiming to double to quintuple battery design efficiency this year. Their automated design process aims to enhance efficiency by two orders of magnitude. CATL’s R&D President Ouyang Chuying added that the company is innovating from a system perspective, optimizing the coupling of materials, cells, and system designs through multi-scale integrated simulation, achieving forward and reverse design feedback to enhance product performance. “We build physical images based on application experience, extracting scientific questions from engineering problems, and forming a closed loop using AI and experimentation.”
“Previously, battery material research mainly relied on trial-and-error methods, consuming considerable manpower and time, with low efficiency. Now, artificial intelligence is transforming the previous R&D model,” Ouyang Minggao remarked, noting that automated material design throughout the entire process, including automated experimentation, characterization, simulation, and preparation, achieves full-process intelligence. Utilizing AI technology, vast amounts of data can be deeply mined and analyzed, facilitating research and development efforts for solid-state batteries. Ouyang Minggao explained that the AI model for all-solid-state batteries provides various expert agents and intelligent design tools, achieving intelligent matching for material systems, design parameters, intelligent selection, production processes, and recommendations for development services, potentially enhancing battery R&D efficiency by one to two orders of magnitude while saving 70% to 80% of development costs. All-solid-state batteries are the critical competitive point for the next generation of battery technology. It is anticipated that under the driving force of artificial intelligence, the transformation of R&D models will accelerate breakthroughs in key technologies, costs, and mass production applications for all-solid-state batteries.
