Solid-State Batteries: The Tech Reset That Could Unseat Longstanding Chinese Battery Dominance
A paradigm-shifting new generation of battery chemistry, paired with shifting geopolitical priorities, is opening a rare window for non-traditional players to challenge established industry leaders
Right now, the global lithium battery sector is overwhelmingly dominated by Chinese heavyweights BYD and CATL, which control the vast majority of battery supplies for the world’s electric vehicles and grid-scale energy storage projects, and are actively rolling out new manufacturing hubs across key markets in North America, Europe, and beyond. When outside players like European battery startup Northvolt attempt to compete on the existing conventional lithium-ion playing field, they quickly run up against nearly insurmountable cost and scale advantages.
But for CATL and BYD’s rivals, there is still a clear, viable path to taking the lead: cracking the code on next-generation battery technology. The entire global battery industry has already converged on what that breakthrough will be: solid-state batteries.
Conventional lithium-ion cells rely on liquid electrolytes to shuttle ions between their positive and negative electrodes, but this liquid core carries inherent, well-documented risks: it can leak, evaporate, and even ignite under physical damage or extreme heat. For decades, researchers have chased a replacement solid electrolyte that would eliminate those hazards entirely, while also delivering higher energy density, faster charging speeds, and far more consistent performance in frigid temperatures. While solid-state cells have long been proven to work in controlled lab settings, they remain prohibitively expensive and extremely difficult to manufacture at commercial scale, with teams across the world racing to identify the exact chemical formula that will make mass production economically feasible.
ProLogium: The Taiwanese Startup Leading the Solid-State Charge
One of the most advanced teams working to commercialize this technology is ProLogium, a Taiwanese battery firm led by founder and CEO Vincent Yang, who projects his company will kick off mass production of solid-state cells as early as 2027. I sat down with Yang during a recent visit to New York City – no family relation, despite sharing the same last name – and the material science PhD with over 20 years of hands-on battery R&D and manufacturing experience has seen nearly every twist and turn of the sector’s decades-long evolution. “I’ve built almost every type of battery you can imagine,” he jokes. “For some of the older legacy chemistries, you could call me a living fossil.”
Until very recently, ProLogium was a relatively small, under-the-radar player in the global battery space. That changed at the start of 2024, when the firm unveiled its fourth-generation solid-state battery design, which Yang claims is engineered to be low-cost and simple to scale up for mass production. The company has since expanded at a blistering pace: in February, it broke ground on a new gigafactory in Dunkirk, France, after securing a €1.5 billion grant from the French government to build local solid-state manufacturing capacity for the European market. Just three months later in May, ProLogium announced a merger with U.S. blank-check firm TDAC, setting the stage for a Nasdaq public listing at a $3.8 billion valuation.
For the global community of solid-state battery researchers, the current moment is packed with unprecedented opportunity. It’s true that Chinese giants including CATL are pouring huge resources into their own solid-state R&D pipelines, and benefit from massive existing client rosters and mature supply chain ecosystems. But solid-state batteries use fundamentally different raw materials and manufacturing processes than conventional lithium-ion, creating a brand new competitive landscape where agile upstarts have a real shot at outpacing long-established incumbents.
“We’re competing against the best engineering teams on the planet,” Yang says. “But even for the largest corporations in the world, this technology still poses unsolved, extremely tough technical hurdles. That pressure keeps us moving, and it’s incredibly energizing.”
Geopolitical Shifts Turn Industrial Protectionism Into a Competitive Edge
One of ProLogium’s most unique advantages right now is that it has no manufacturing footprint in mainland China. Amid current global geopolitical tensions, widespread overreliance on Chinese battery technology is facing growing pushback from policymakers and large corporate buyers across the West and allied regions. Yang notes that ProLogium recently signed a major supply contract with a state-backed Asian utility infrastructure firm, which explicitly required a battery supplier not based in mainland China. “Virtually every region in the world now has some form of industrial protectionism,” he says. “It has both positive and negative impacts, but I won’t deny that we sometimes stand to benefit from that trend.”
A huge, diverse pool of players is now vying to dominate the solid-state market. Earlier in 2024, the Chinese government launched the All-Solid-State Battery Collaborative Innovation Platform (CASIP), bringing together every major domestic battery manufacturer to pool resources and speed up domestic development of the technology. Large Asian conglomerates including Japan’s Toyota and South Korea’s Samsung are also global leaders in solid-state R&D, while prominent U.S. startups such as QuantumScape and Solid Power have also made major technical progress in recent years.
“The solid-state battery supply chain is far less mature than that of conventional lithium-ion, and that cuts both ways,” explains Jiayan Shi, a battery analyst at BloombergNEF. “It creates far more room for non-Chinese players to build out their own end-to-end supply chains from scratch, but it also leaves the whole sector far more vulnerable to disruptions in upstream materials that are still largely controlled by Chinese suppliers, from graphite to rare earths and processed lithium.”
As countries recognize how critical domestic battery capacity is for energy security and global climate action targets, a wave of national security-focused industrial policies have rolled out across major markets to incentivize local battery production. The European Union’s Net-Zero Industry Act, which came into force last year, mandates that 40% of the bloc’s total battery demand is met by local domestic production by 2030. It was in this exact policy context that ProLogium secured its massive French government incentive to build its first overseas gigafactory in Dunkirk. Yang says the facility could kick off mass production of ProLogium’s latest generation cells as early as late 2028, and per SEC filings published in July, the firm is already scouting potential additional manufacturing sites across the U.S. to expand its footprint further.
The First Big Commercial Use Case For Solid-State Batteries Might Not Be EVs
It may seem logical that ProLogium’s first overseas factory is based in Europe, the world’s largest regional EV market, and electric vehicles are widely seen as the biggest long-term end use for solid-state cells. Yang notes that ProLogium has been partnering with automakers on solid-state EV prototypes for years: way back in 2018, it worked with Chinese EV brands Weltmeister and Enovate to roll out concept cars powered by its solid-state cells, though those collaborations were never publicly announced at the request of one of ProLogium’s major investors, Daimler (now rebranded as Mercedes-Benz).
But there’s one major barrier to rolling solid-state batteries out in mass market EVs right now: the cells are still far more expensive to produce, and make up nearly 50% of a total EV’s bill of materials. Adding that extra cost would push EV price points far higher, making them far less appealing to mainstream consumers. That’s why Yang is convinced that the first large-scale commercial use cases for solid-state batteries won’t be passenger cars at all – they will be industrial robots and AI data center backup storage systems.
Most industry analysts share that view. “Batteries make up such a large share of total EV costs, but that is far less true for many other sectors,” says BloombergNEF’s Shi. “Solid-state batteries are expected to first launch in fields with far lower cost sensitivity: industrial robots, wearable smart tech, aerospace equipment, and commercial drones are all prime candidates.”
Robotics makers and data center operators are also far more willing to pay a premium for the exceptional safety performance of solid-state cells, Yang notes. “If a conventional lithium-ion battery in an EV catches fire, you can pull the car over to the side of the road and evacuate,” he points out. “But where do you park a burning battery if it’s in an electric aircraft 10,000 feet in the air?” That same safety case applies to data centers, which can use banks of solid-state batteries for peak demand load shifting and emergency backup power to avoid costly outages. Yang notes that VinFast, the Vietnamese EV manufacturer that has been an investor in ProLogium since 2022, is already pivoting its first planned deployment of ProLogium solid-state cells away from passenger EVs, to deploy them first for AI data center energy storage systems.
Yang projects that in the near term, the vast majority of ProLogium’s output will go to these emerging non-automotive sectors. In the longer run, once the company’s European gigafactory is fully scaled, EV automakers will become its largest volume customers. “By 2032, roughly 60% of our total battery shipment volume will go to passenger EVs, and 40% will go to those emerging industrial sectors,” he says. “But if you look at total revenue, that ratio will flip: 40% of our revenue will come from EVs, and 60% will come from those higher-margin emerging use cases.”
This edition was produced for the Made in China newsletter, written by Zeyi Yang and Louise Matsakis. You can find archives of past issues of the newsletter here.
The Race to Build Solid-State Batteries: Can a New Challenger Disrupt China’s Lithium-Ion Dominance?
