The Race for Solid-State Batteries

The bat­tery is con­sid­ered the heart of mod­ern elec­tric vehi­cles. Many car­mak­ers have long relied on the sup­pli­er indus­try for this most impor­tant and valu­able com­po­nent in their prod­ucts. Yet that appears to be chang­ing. To devel­op their own core exper­tise in bat­tery sys­tems and to ele­vate their brands above the com­pe­ti­tion with inno­v­a­tive tech­nol­o­gy, car man­u­fac­tur­ers are invest­ing to an ever greater degree in build­ing their own gigafac­to­ries. Volk­swa­gen alone plans to open six gigafac­to­ries in Europe in the near future—with an over­all pro­duc­tion vol­ume of more than 240 gigawatt hours.

Porsche Con­sult­ing expects the glob­al bat­tery mar­ket to sur­pass 5,500 gigawatt hours by 2030. Two-thirds of this capac­i­ty will be used for pas­sen­ger cars. Accord­ing to its cal­cu­la­tions, the over­all mar­ket will increase ten­fold this decade. But that is only the begin­ning, because in addi­tion to pump­ing bil­lions of euros into their fac­to­ries, auto­mo­tive cor­po­ra­tions are invest­ing enor­mous sums in an entire­ly new gen­er­a­tion of bat­ter­ies. Those could com­plete­ly reshuf­fle the deck in the field of electromobility.

Dr. Fabi­an Duffn­er, Part­ner in Advanced Tech­nolo­gies at Porsche Con­sult­ing, refers to solid-state bat­ter­ies as game chang­ers. As he sees it, they can not only rev­o­lu­tion­ize the auto­mo­tive world but also enable elec­tri­fi­ca­tion of air­craft, for exam­ple. Their main advan­tages include longer ranges, faster charg­ing times, and greater safe­ty. Above all, they give car­mak­ers a chance to free them­selves soon­er from depen­dence on Asian cell pro­duc­ers. In con­trast to the major pro­duc­ers of con­ven­tion­al lithi­um-ion bat­ter­ies, most of the lead­ers in solid-state bat­tery tech­nol­o­gy are start-ups from the USA.

Duffn­er cau­tions against eupho­ria, how­ev­er. “Solid-state bat­ter­ies are not a sure thing,” he states. “Numer­ous chal­lenges, both tech­ni­cal and eco­nom­ic, need to be mas­tered before indus­tri­al pro­duc­tion can begin.” He lists six key areas of activ­i­ty: improv­ing prod­uct and mate­r­i­al prop­er­ties; trans­form­ing pro­duc­tion to large-scale stan­dards; inte­grat­ing the bat­ter­ies into vehi­cle sys­tems; estab­lish­ing robust sup­ply chains for new mate­ri­als and machin­ery; low­er­ing pro­duc­tion costs; and fund­ing the series devel­op­ment and scale-up stage.

Despite the many tasks ahead, near­ly all the major car­mak­ers have bought into residue start-ups with the aim of lead­ing the field. Porsche Consulting’s cal­cu­la­tions sug­gest that their invest­ments could pay off. If the chal­lenges are met and the tech­nol­o­gy can go onto the mar­ket as pre­dict­ed, the con­sul­tants see a poten­tial cumu­la­tive mar­ket for indus­tri­al pro­duc­tion of solid-state bat­ter­ies of more than 400 bil­lion euros by 2035.

Will the new tech­nol­o­gy ful­fill its promise and become the next “game chang­er” in the auto­mo­tive and other indus­tries? What steps have to be taken to lay the indus­tri­al foun­da­tions? What is the cur­rent state of the tech­nol­o­gy and what chal­lenges still need to be over­come for the fore­casts to be ful­filled? What oppor­tu­ni­ties and risks do Euro­pean com­pa­nies ulti­mate­ly face? Porsche Con­sult­ing The Mag­a­zine doc­u­ments the cur­rent state of knowl­edge about these and other crit­i­cal ques­tions per­tain­ing to solid-state batteries.

Greater ranges, lower costs:
Car bat­tery devel­op­ment over 130 years

Sur­veys by mar­ket researchers con­sis­tent­ly show that cus­tomers want elec­tric cars to meet the fol­low­ing three main cri­te­ria: long ranges, short charg­ing times, and over­all price tags com­pa­ra­ble to those for com­bus­tion cars. Addi­tion­al demands on the bat­ter­ies have to do with their drive power, safe­ty, and longevi­ty. If elec­tric cars can in fact be mass-pro­duced with solid-state bat­ter­ies, they would meet all these cri­te­ria. This would be pos­si­ble thanks to solid elec­trolytes, which func­tion as sep­a­ra­tors between the anodes and cath­odes. With chem­i­cal­ly sta­ble solid elec­trolytes, the graphite cur­rent­ly used to store ener­gy could be replaced by other mate­ri­als such as lithi­um metal—whose stor­age capac­i­ty is ten times that of graphite by weight. The high­er ener­gy den­si­ty would con­sid­er­ably increase bat­tery vol­ume for the same ener­gy con­tent, which in turn would enable ranges to real­is­ti­cal­ly exceed 750 kilo­me­ters as early as 2030.

More­over, ions can be trans­port­ed faster through solid elec­trolytes, which would put an end to today’s lengthy charg­ing times. Experts esti­mate that it will take no more than ten min­utes to “fuel” an elec­tric car’s bat­tery. This would be hard­ly any dif­fer­ent than fill­ing a tank with gaso­line or diesel. The new tech­nol­o­gy will also enhance safe­ty, because the liq­uid elec­trolytes in con­ven­tion­al lithi­um-ion bat­ter­ies are flam­ma­ble. Although it is extreme­ly rare for lithi­um-ion bat­ter­ies to catch fire, the risk can be vir­tu­al­ly exclud­ed for solid-state batteries.

“In sum, the advan­tages of solid-state over lithi­um-ion bat­ter­ies are enor­mous. How­ev­er, the tech­ni­cal issues that have to be solved before the bat­ter­ies are ready for series pro­duc­tion are of a rough­ly sim­i­lar mag­ni­tude,” observes Duffner.

The cell “breathes”
Lithi­um-ion ver­sus anode­less batteries

If the asso­ci­at­ed chal­lenges can be mas­tered, solid-state bat­ter­ies will most like­ly replace lithi­um-ion mod­els in many areas by 2035. There will prob­a­bly be a tran­si­tion­al stage in which they will ini­tial­ly only be seen in high-end mar­ket seg­ments due to lower pro­duc­tion vol­umes and high­er costs. Pre­dic­tions from Porsche Con­sult­ing indi­cate that pre­mi­um car brands will be the first to hit the roads with solid-state bat­ter­ies on board. At the same time, solid-state drive sys­tems might also see ini­tial use in air­craft. These will not be large pas­sen­ger and cargo planes but rather elec­tric ver­ti­cal take­off and land­ing craft (eVTOLs)—small fly­ing machines with two to six seats that could soon shift taxi ser­vices into the skies. The advan­tages of solid-state bat­ter­ies here include their lower weight, their high­er per­for­mance of spe­cial rel­e­vance for take­off and land­ing, and not least of all their pos­i­tive safe­ty fea­tures. Over the medi­um term, they will be able to power flights of up to 1,000 kilometers.

In terms of cost, solid-state bat­ter­ies will only be able gain an edge over lithi­um-ion sys­tems after 2030, when indus­tri­al pro­duc­tion of the new tech­nol­o­gy picks up speed and fur­ther advances in mate­r­i­al effi­cien­cy are made. At that point they will almost cer­tain­ly have lifes­pans equal to or greater than their pre­de­ces­sor mod­els. The use of solid-state bat­ter­ies will then by no means be lim­it­ed to elec­tric cars. “On the con­trary,” says Dr. Xiao­han Wu, Senior Expert at Porsche Con­sult­ing. “The over­all improve­ment in bat­tery KPIs will enable other sec­tors to be elec­tri­fied, which is cur­rent­ly incon­ceiv­able with today’s technology.”

Although these bat­ter­ies have plen­ty of poten­tial and what looks like an enor­mous range of appli­ca­tions, research in the field still seems like bet­ting on the future. Although devel­op­ers have already designed cells that work at room tem­per­a­ture, it could take a few years before large-scale series pro­duc­tion is pos­si­ble. Nor is that a sure thing, because the most promis­ing con­cepts have thus far only been demon­strat­ed with lab pro­to­types or are still in pilot phas­es. At any rate, the indus­try is still quite far from the high­ly auto­mat­ed pro­duc­tion sys­tems cur­rent­ly used for lithi­um-ion batteries.

In addi­tion to the start-ups based pri­mar­i­ly in the USA, com­pe­ten­cy clus­ters have been formed world­wide, all seek­ing to indus­tri­al­ize solid-state cells. In Japan, vehi­cle man­u­fac­tur­ers are dri­ving the devel­op­ment of solid-state bat­ter­ies as part of the NEDO indus­tri­al con­sor­tium, togeth­er with cell man­u­fac­tur­ers and mate­r­i­al sup­pli­ers along the entire value chain. If experts’ expec­ta­tions are met, pilot projects could be launched in 2024 and large-scale series pro­duc­tion might then fol­low around 2027. It would ini­tial­ly be lim­it­ed to the pre­mi­um vehi­cle seg­ment, which is less sen­si­tive to cost pres­sures. “We antic­i­pate full indus­tri­al­iza­tion as of 2030, with cor­re­spond­ing­ly high­er per­for­mance and lower pro­duc­tion costs,” says Dr. Wu. The dis­rup­tive qual­i­ty of the new tech­nol­o­gy would be evi­dent by then at the lat­est, and could affect the entire auto­mo­tive indus­try. Porsche Con­sult­ing accord­ing­ly expects cars with solid-state bat­ter­ies to make up 5 to 15 per­cent of the mar­ket by 2035, which could mean as many as 35 mil­lion vehi­cles out on the roads.

Although late to the game, Ger­man car­mak­ers are now fully focused on elec­tro­mo­bil­i­ty and have announced invest­ments worth bil­lions of euros in new gigafac­to­ries. These fac­to­ries, how­ev­er, are designed to make the power sys­tems cur­rent­ly dom­i­nat­ing the mar­ket for elec­tric cars, name­ly lithi­um-ion bat­ter­ies. What will hap­pen if the tech­ni­cal issues sur­round­ing solid-state bat­ter­ies can be resolved by 2027 or so? Can cur­rent pro­duc­tion process­es be eas­i­ly adapt­ed to the new and bet­ter tech­nol­o­gy? “We esti­mate that around 40 per­cent of the machin­ery in today’s gigafac­to­ries is also suit­able for mak­ing solid-state bat­ter­ies,” says Pro­fes­sor Jens Leker from the Uni­ver­si­ty of Mün­ster (WWU).

But it’s not just a mat­ter of machin­ery. Process­es and man­u­fac­tur­ing meth­ods also need to be com­plete­ly revamped. That is impor­tant to ensure cell pro­duc­tion effi­cien­cy. While some stan­dard process­es can be retained, for instance in pow­der com­po­si­tion, coat­ing, and cal­en­dar­ing, oth­ers would need to be added, for exam­ple in lam­i­na­tion as well as sin­ter­ing and press­ing. Given the mate­r­i­al prop­er­ties of solid-state elec­trolytes, a larg­er num­ber of process steps would also have to be done in a con­trolled atmosphere.

These and other spe­cif­ic prop­er­ties of solid-state bat­ter­ies would lead to high­er pro­duc­tion costs than for today’s lithi­um-ion bat­ter­ies. On the other hand, some prop­er­ties of solid-state bat­ter­ies could yield sig­nif­i­cant sav­ings. Solid-state prod­ucts can admit of more sta­ble mate­r­i­al com­bi­na­tions, for exam­ple. This in turn could con­sid­er­ably stream­line for­ma­tion and aging processes—production steps that take up around a third of the space in today’s gigafac­to­ries. More­over, the fill­ing process for liq­uid elec­trolytes would no longer be rel­e­vant, includ­ing the time need­ed for the liq­uid to infuse the porous active materials.

When it comes to poten­tial sav­ings, how­ev­er, the anode is the key com­po­nent. Pro­duc­ing the anodes for lithi­um-ion bat­ter­ies is extreme­ly time-inten­sive, and also asso­ci­at­ed with high costs. Around 15 to 20 per­cent of the floor space in today’s plants is devot­ed to anode pro­duc­tion alone. If anodes are not need­ed, man­u­fac­tur­ers would not need the rel­e­vant mate­ri­als or machin­ery, either. Nor would the skilled pro­duc­tion per­son­nel be need­ed, or they could be trans­ferred to other areas. The most inno­v­a­tive start-ups in the solid-state field—Quantumscape, for instance—are there­fore pur­su­ing cell con­cepts with­out any active mate­ri­als on the anodes at all. Suc­cess­ful devel­op­ment of anode-free solid-state cells will be cru­cial for the new gen­er­a­tion of bat­ter­ies, accord­ing to Duffn­er. “Solid-state bat­ter­ies will only trig­ger the expect­ed trans­for­ma­tion in the auto­mo­tive and other indus­tries if anode-free con­cepts can be estab­lished and the cor­re­spond­ing cost ben­e­fits achieved.”

Nine steps to a solid-state battery
How fac­to­ries can be restructured

In addi­tion to their pro­duc­tion, solu­tions also need to be found for inte­grat­ing the bat­ter­ies into vehi­cles. The main prob­lem here is that solid-state bat­ter­ies can be said to “breathe.” The expan­sion and con­trac­tion process for lithi­um-metal anodes can take up more than ten cen­time­ters of space in a vehi­cle. Engi­neers there­fore have to find ways of inte­grat­ing vol­ume fluc­tu­a­tions of this mag­ni­tude into an oth­er­wise rigid vehi­cle struc­ture. In addi­tion, today’s pro­to­type cells require sub­stan­tial­ly larg­er for­mats to be rel­e­vant for the auto­mo­tive indus­try and other applications.

The mate­ri­als are yet anoth­er field with a con­sid­er­able list of tasks to be tack­led before indus­tri­al­iza­tion is pos­si­ble. The mate­r­i­al prop­er­ties of the three main com­po­nents of solid-state batteries—solid elec­trolytes, cath­odes, and anodes—need to be improved. The cath­ode mate­r­i­al and solid elec­trolyte have to be chem­i­cal­ly com­pat­i­ble, for exam­ple via a suit­able coat­ing on the cath­ode mate­r­i­al. Unde­sir­able aux­il­iary reac­tions can oth­er­wise sig­nif­i­cant­ly reduce the solid-state battery’s lifes­pan. The solid elec­trolytes them­selves also need con­sid­er­able enhance­ment. Above all, researchers need to work on their chem­i­cal sta­bil­i­ty. In addi­tion, ion trans­port has to be fur­ther accel­er­at­ed if solid-state bat­ter­ies are to one day form the heart of sports cars.

In order for solid-state bat­ter­ies to achieve the envi­sioned ener­gy den­si­ty, it is impor­tant to reduce the thick­ness of the coat­ing on the solid elec­trolyte sep­a­ra­tor to fewer than 20 microm­e­ters. That is rough­ly three times thin­ner than a human hair. It poses a huge chal­lenge for large-lot pro­duc­tion, because the sep­a­ra­tors have to be not only thin but also “pin­hole free,” i.e., with­out the tini­est irreg­u­lar­i­ties on their sur­faces. More­over, these dense sep­a­ra­tors are need­ed on a very large scale: if a pro­duc­tion capac­i­ty of 20 gigawatt hours is to be achieved, sep­a­ra­tors are need­ed that, laid side by side, would cover an area of 150 mil­lion square meters—equivalent to around 20,000 soc­cer fields. To keep costs under con­trol here, fail­ure rates for these valu­able solid elec­trolyte sep­a­ra­tors need to be minimized.

It will take a few years for researchers and devel­op­ers to improve the prop­er­ties of solid-state bat­ter­ies to the point that indus­tri­al pro­duc­tion can begin. But even that will not mean all the prob­lems are solved. The industry’s next step will con­sist of set­ting up sup­ply chains for the new mate­ri­als. In doing so, the exist­ing chains for lithi­um-ion bat­ter­ies will be of only lim­it­ed use. The req­ui­site set of chem­i­cals is sim­ply too dif­fer­ent. Sup­plies of high-demand raw mate­ri­als like lithi­um, in par­tic­u­lar, will need to sta­bi­lized with respect to both their avail­abil­i­ty and price. Solid-state elec­trolytes con­tain up to 50 times more lithi­um per unit of vol­ume than con­ven­tion­al liq­uid electrolytes.

Given these con­sid­er­a­tions, Porsche Consulting’s bat­tery experts pre­dict it could take up to two years before the sup­pli­er indus­try builds its first plants for the nec­es­sary mate­ri­als. Con­struc­tion and start-up of the actu­al bat­tery plants could take even longer, with experts esti­mat­ing at least two and a half years here. “To save time and costs, the play­ers should start prepar­ing early on and coor­di­nate their process­es,” says Senior Expert Wu.

Indus­tri­al­iza­tion of solid-state bat­ter­ies is also asso­ci­at­ed with major finan­cial risks. Con­struct­ing a pilot plant in the megawatt range already costs 500 mil­lion to one bil­lion euros. If plan­ners envi­sion build­ing their own gigafac­to­ry with a capac­i­ty of up to 20 gigawatt hours, this will require an addi­tion­al invest­ment of around two bil­lion euros. Machines, sys­tems, and build­ings will cost 1 to 1.5 bil­lion. And anoth­er 0.5 to 1 bil­lion are pro­ject­ed dur­ing the start-up phase for high fail­ure rates and for fac­to­ry per­son­nel. It is there­fore hard­ly sur­pris­ing that start-ups like Solid Power and Solid Ener­gy Sys­tem began look­ing for part­ners early on—whether in con­nec­tion with con­tract pro­duc­tion or as joint ven­tures with carmakers.

While Asian man­u­fac­tur­ers like CATL and LG dom­i­nate lithi­um-ion tech­nol­o­gy, most of the lead­ers in solid-state bat­tery tech­nol­o­gy are start-ups in the USA. The estab­lished Asian play­ers are not leav­ing the field with­out a fight, how­ev­er. For exam­ple, lead­ing cell man­u­fac­tur­ers in Korea are form­ing close part­ner­ships with their sup­pli­ers to drive the tech­nol­o­gy for­ward. The big car­mak­ers appear to have learned their les­son from lithi­um-ion bat­ter­ies. In order to pre­vent fur­ther depen­dence on Asian sup­pli­ers, they have been invest­ing heav­i­ly in tech start-ups.

Volk­swa­gen alone has invest­ed more than 300 mil­lion dol­lars in Quan­tum­scape, a Cal­i­for­nia-based start-up that spe­cial­izes in anode­less solid-state bat­ter­ies with solid ceram­ic sep­a­ra­tors. In April 2021, Ford and BMW announced they were invest­ing a total of 130 mil­lion dol­lars in Solid Power, a bat­tery devel­op­er in Col­orado. Solid Power plans to start by bring­ing solid-state bat­ter­ies with sil­i­con anodes to the mar­ket, and then take the sec­ond step of fur­nish­ing them with lithi­um-metal anodes. In any case, these invest­ments appear to have paid off. Both Quan­tum­scape and Solid Power are list­ed on the stock mar­ket and have attained uni­corn sta­tus with mar­ket cap­i­tal­iza­tion of more than a bil­lion dollars.

Mer­cedes has also made major invest­ments as part of its “Elec­tric only” strat­e­gy. In Jan­u­ary 2022 the cor­po­ra­tion expand­ed its col­lab­o­ra­tion with the Tai­wanese provider Pro­logium by sev­er­al tens of mil­lions of euros. It also bought into Fac­to­r­i­al Ener­gy, a Mass­a­chu­setts-based com­pa­ny whose back­ers include Stel­lan­tis (Fiat, Peu­geot, Chrysler). In Europe, Ilika and Blue Solu­tions (Bol­loré Group) are espe­cial­ly promi­nent in solid-state bat­tery devel­op­ment. While Ilika’s strong show­ing with small-for­mat pro­to­types has attract­ed investors like Jaguar, Land Rover, and Honda, Blue Solu­tions’ solid-state poly­mer bat­ter­ies have already seen com­mer­cial use in elec­tric buses (eCitaro) from Mer­cedes. The tech­nol­o­gy is not well suit­ed for use in pas­sen­ger cars, because the tem­per­a­ture behav­ior requires a long pre­heat­ing peri­od before start-up.

While mate­r­i­al inno­va­tions are dri­ving the devel­op­ment of solid-state bat­ter­ies, new pro­duc­tion meth­ods could boost the indus­tri­al­iza­tion process. Sakuu, a Cal­i­for­nia start-up, has devel­oped a new 3D print­ing process for solid-state bat­ter­ies. Sakuu wants the tech­nique to accel­er­ate pro­duc­tion of the new bat­tery gen­er­a­tion, lower costs, and reduce space requirements.

It remains to be seen who will end up win­ning this race. Chi­nese pro­duc­ers should not be dis­count­ed. The major Asian play­ers have a dif­fer­ent start­ing sit­u­a­tion and can there­fore devel­op dif­fer­ent strate­gies of rel­e­vance to solid-state bat­ter­ies. They are seek­ing in large part to opti­mize exist­ing lithi­um-ion bat­ter­ies. This can be achieved not least of all by suc­ces­sive­ly installing solid elec­trolytes to pro­duce what are known as “semi-solid-state bat­ter­ies.” Chi­nese man­u­fac­tur­ers enjoy sub­stan­tial ben­e­fits from their exist­ing gigafac­to­ries, which allow engi­neers to try out many new devel­op­ments in actu­al practice.

The dis­rup­tive poten­tial of solid-state bat­ter­ies is open­ing up entire­ly new oppor­tu­ni­ties, accord­ing to experts. While Asian man­u­fac­tur­ers were instru­men­tal in cre­at­ing the lithi­um-ion bat­tery busi­ness, Ger­man and other Euro­pean com­pa­nies can now take the entire value chain for solid-state bat­ter­ies into their own hands. The finan­cial prospects are promis­ing, accord­ing to the experts at Porsche Con­sult­ing. The mar­ket poten­tial for cell pro­duc­ers alone is esti­mat­ed at 200 bil­lion euros by 2035. Anoth­er 150 bil­lion euros are esti­mat­ed for the mate­r­i­al and sup­pli­er indus­tries. And mechan­i­cal engi­neer­ing com­pa­nies that con­cen­trate on equip­ping the new gigafac­to­ries can expect sales of 70 bil­lion euros.

That being said, some obsta­cles need to be over­come. It remains unclear how the cells can be made on an indus­tri­al scale with the req­ui­site qual­i­ty stan­dards. And the mechan­i­cal engi­neer­ing sec­tor has appar­ent­ly not read the signs of the time. As of 2022, there were sim­ply no suit­able indus­tri­al sys­tems for pro­duc­ing solid-state bat­ter­ies. In other words, there are still some open ques­tions on the road to the solid-state bat­tery. The first play­ers who can pro­vide the right answers will reap the com­mer­cial ben­e­fits in the future.