The Race to Build Solid-State Batteries: Can a New Challenger Disrupt China’s Lithium-Ion Dominance?

Right now, Chinese industry giants like CATL and BYD hold unrivaled sway over the global lithium battery market. They not only produce the vast majority of batteries powering electric vehicles (EVs) and grid energy storage projects worldwide, but they are also rapidly building new production facilities across North America, Europe and other major regions. When non-Chinese competitors like Europe’s Northvolt attempt to challenge their market lead, they quickly run up against the overwhelming scale and cost advantages Chinese incumbents have built over decades. But that does not mean rivals have no path to the top.

If a newcomer can perfect the next generation of battery technology, it could still overtake current market leaders. And the entire battery industry broadly agrees on what that transformative technology will be: solid-state batteries. Today, nearly all commercial lithium-ion batteries use liquid electrolytes to shuttle charged ions between the positive cathode and negative anode. But liquid electrolytes carry major risks: they can leak, vaporize, and ignite under extreme conditions, leading to dangerous battery fires. For decades, researchers have worked to replace liquid electrolytes with solid alternatives, which promise batteries that are far safer, pack more energy, and perform far better in cold weather.

While solid-state batteries have been successfully developed in lab settings, scaling up affordable mass production has remained a stubborn barrier. Dozens of companies around the world are racing to find the optimal chemical composition that will make this technology commercially viable at large scale. One of those competitors is ProLogium, a Taiwan-based solid-state battery developer led by founder and CEO Vincent Yang, who says his firm could launch mass production as early as 2027. I recently met with Yang in New York City (for the record, we share a last name but are not related). With a PhD in materials science and more than two decades of experience in battery research and manufacturing, Yang has worked on nearly every type of battery developed over that period. “I’ve made almost every kind of battery. You can call me a living fossil for some of the older technologies,” he joked.

Until this year, ProLogium was a relatively small player in the global battery ecosystem. But at the start of 2024, the company unveiled its fourth-generation solid-state battery design, which it says is both low-cost and straightforward to produce at mass scale. Since then, ProLogium has expanded at breakneck speed. In February, it broke ground on a €1.5 billion gigafactory in Dunkirk, France, backed by a large grant from the French government to build out solid-state battery production in Europe. In May, ProLogium announced a merger with U.S. blank-check firm TDAC that will take the company public on the Nasdaq exchange at a $3.8 billion valuation.

For solid-state battery developers, the current moment is full of open opportunity. It is true that major Chinese incumbents like CATL are also pouring billions into solid-state research, and they bring massive existing resources and established customer networks to the race. But because solid-state batteries rely on far different materials and manufacturing processes than conventional lithium-ion, the shift creates an entirely new playing field where newer entrants have a real shot to outcompete established industry leaders. “We’re racing against the best teams in the world, but even for the largest global companies, this is still a deeply difficult technical problem to solve,” Yang told me. While competition creates pressure, it also adds energy to the company’s work, he said.

A key unique advantage ProLogium holds, Yang says, is that it does not operate any manufacturing facilities in mainland China. Amid today’s tense geopolitics, many governments and companies are increasingly wary of overreliance on Chinese technology. Yang says his company recently signed a supply deal with a state-backed utility infrastructure firm in Asia that explicitly required a non-mainland-Chinese battery supplier. “Almost every region around the world has some form of protectionism now. It has both positive and negative impacts, but I have to admit we’ve been able to benefit from that dynamic in some cases,” he said.

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Protectionism as an Unexpected Opportunity

ProLogium is far from alone in the race to dominate solid-state batteries. In 2024, China launched the All-Solid-State Battery Collaborative Innovation Platform (CASIP), an initiative that brings together nearly every major Chinese battery maker to consolidate research resources and speed up development. Japanese and South Korean industrial giants like Toyota and Samsung are also leading players in the space, alongside high-profile U.S. startups including QuantumScape and Solid Power.

Jiayan Shi, a battery analyst at BloombergNEF, notes that solid-state batteries have far less mature global supply chains than conventional lithium-ion batteries — a dynamic that cuts both ways. “There is more opportunity for non-Chinese players to establish their own independent supply chains, but there is also more vulnerability to disruptions from Chinese control of key upstream materials like graphite, rare earths, and lithium,” Shi explained.

As governments recognize the critical role batteries play in both energy security and global climate action, many have rolled out national security-focused policies that prioritize locally produced batteries. The European Union’s Net-Zero Industry Act, which took effect last year, sets a target to meet 40 percent of the bloc’s battery demand with domestic production by 2030. It was against this policy backdrop that ProLogium secured the large incentive package to build its first overseas gigafactory in France.

Yang says the company’s latest-generation solid-state batteries could enter mass production at the Dunkirk site as early as the end of 2028. After that, ProLogium is open to building manufacturing facilities anywhere in the world, and is already exploring expansion opportunities in the United States, according to a July filing with the U.S. Securities and Exchange Commission.

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Beyond Electric Vehicles

It’s no coincidence that ProLogium’s first overseas factory is located in France: Europe is currently one of the world’s largest EV markets, and EVs are one of the most high-profile potential use cases for solid-state batteries. Yang says ProLogium has been working to integrate its batteries into passenger vehicles for years: the company partnered with Chinese automakers Weltmeister and Enovate to launch prototype EVs powered by ProLogium solid-state batteries back in 2018. But Yang says those early collaborations were never publicly announced because Daimler (now Mercedes-Benz), one of ProLogium’s earliest major investors, preferred to keep the work under wraps.

One major barrier to widespread adoption of solid-state batteries in EVs is cost: battery production still accounts for nearly half of the total cost of a new EV, and solid-state batteries are still more expensive to manufacture than conventional lithium-ion, which would push up car prices and reduce demand from price-sensitive consumers. That’s why Yang argues the first large-scale commercial use of solid-state batteries will likely not be in passenger cars at all — it will be in industrial robots and energy storage for AI data centers.

That view is widely shared across the industry. “Batteries make up such a large share of EV cost, but that’s not the case for many other sectors. Solid-state batteries are expected to first be deployed in areas that are less sensitive to upfront costs, including robots, wearable smart devices, aerospace equipment, and drones,” BloombergNEF’s Shi said.

Buyers in these sectors also place a higher premium on the superior safety of solid-state batteries compared to conventional lithium-ion. “If an EV has a battery fire, you can pull it over to the side of the road and evacuate. But what do you do if an electric aircraft has a battery failure mid-flight?” Yang pointed out. That same safety argument also applies to data centers using batteries for peak demand balancing and backup power during blackouts. In fact, Yang says Vietnamese EV maker VinFast, which has invested in ProLogium since 2022, is now shifting its planned use of ProLogium solid-state batteries from passenger EVs to energy storage for its AI data center projects.

In the near term, Yang says most of ProLogium’s solid-state battery output will go to these emerging use cases. But longer term, after the company’s European gigafactory is fully operational, he still expects EV makers to become the firm’s largest customers by volume. “By 2032, maybe 60 percent of the batteries we produce by volume will go to passenger cars, and 40 percent to emerging markets. But in terms of revenue, that could be reversed: 40 percent from cars, 60 percent from emerging applications,” he said.

This article is an installment of Made in China, the newsletter by Zeyi Yang and Louise Matsakis. You can read previous editions of the newsletter here.