Solid-state batteries are facing global production challenges, and the "Holy Grail" of lithium batteries may well remain just a dream.

"‘The day solid-state batteries become widespread will mark the moment when gasoline-powered vehicles step off history’s stage.’ This was a phrase that circulated widely in the new-energy industry years ago. Frank Blome, head of Volkswagen’s Battery Cell Center, even hailed solid-state batteries as the ‘final chapter’ for lithium-ion technology—and the ultimate endpoint for energy devices before controlled nuclear fusion becomes commercially viable. It seems as though whoever manages to pioneer the development of solid-state batteries and successfully scale them for mass commercialization will claim the ‘Holy Grail’ of lithium-battery technology, unlocking the secrets of the energy cube and ultimately emerging as the undisputed leader in the global new-energy sector. It is against this very backdrop that innovators, analysts, and investors around the world have begun fervently chasing this promising frontier. From U.S. startups like QuantumScape and Solid Power to Japanese automotive and chemical giants such as Toyota, Nissan, and Panasonic, not to mention several Chinese companies specializing in electrochemical materials, all are eagerly joining the race to dominate this cutting-edge field."
QuantumScape (abbreviated as QS) is a leading company in this field, backed by an impressive lineup of investors, including the Volkswagen Group and Bill Gates. True to expectations, before its 2020 IPO, QS had already demonstrated that their single-layer battery could maintain 90% of its initial energy capacity after 1,000 charge-discharge cycles at room temperature under pressure—using a 1C rate. Meanwhile, QS announced it has partnered with Volkswagen to begin building a production line, with commercial operations expected to start as early as 2025. This groundbreaking news sent QS’s stock price soaring by a remarkable 10 times. However, amid the excitement, growing numbers of skeptics have begun raising concerns. After all, single-layer batteries are still far from practical real-world applications. Even if technical challenges are eventually overcome, questions remain about whether these batteries can be successfully commercialized. Specifically, QuantumScape’s use of an inorganic oxide-based solid electrolyte layer—which weighs more than 10 times that of conventional lithium-ion battery separators—poses significant hurdles. The low ionic conductivity of the solid electrolyte inherently limits both the battery’s discharge rate and its performance in cold-temperature conditions. As a result, the company has been forced to add at least 20% by weight of oxide material to the battery’s cathode side, in order to enhance ion conduction.
"These increases in non-active materials have led to a reduction in the battery's energy density," a seasoned industry expert told Pinjia. "QuantumScape batteries, for instance, struggle to exceed 350 Wh/kg, making it impossible for them to close the gap with mainstream high-end conventional lithium-ion products. Moreover, achieving the theoretical peak energy density of solid-state batteries remains an even greater challenge. In fact, the common belief that solid-state batteries owe their superior energy density entirely to the solid-state design is fundamentally mistaken. The real key to boosting battery energy density lies in adopting silicon or lithium-metal anodes—both of which are already being used in liquid-state batteries to enhance energy capacity. On the other hand, while solid-state batteries are often touted for their enhanced safety features—such as excellent insulation properties, non-flammability, and resistance to evaporation—even if the battery undergoes deformation without leaking—their overall safety still hinges on more than just these physical attributes. After all, any single vulnerability in another critical aspect could easily undermine the perceived safety advantages of solid-state technology, rendering it no safer than conventional alternatives."
A study by the U.S. Department of Energy found that all-solid-state batteries are less likely to experience short circuits caused by lithium dendrites at higher temperatures compared to conventional lithium-ion batteries—though the heat generated could still ignite flammable packaging or nearby materials. Moreover, when the integrity of the solid electrolyte layer is compromised for various reasons, the resulting reactions can release even more intense heat. Interestingly, at QuantumScape’s annual Halloween event, attendees have repeatedly dressed up as monsters shaped like lithium dendrites over the years.

More notably, the oxide-sheet electrolyte used by QuantumScape is too rigid, prompting the company to incorporate a gel electrolyte in order to improve the interface—but this approach will inevitably compromise the intrinsic safety of the solid-state battery. In particular, the oxide sheet itself suffers from an extremely low critical current density for metallic lithium deposition, making it highly susceptible to short circuits during future use. Last year-end, QuantumScape remained vague about battery safety as well. At that time, the company had barely managed to produce its first batch of prototype solid-state batteries and deliver them to automotive clients. CEO, Chairman, and founder Jagdeep Singh acknowledged that these battery products still have "significant room for improvement" in terms of reliability.

Not only that, but mass production still faces numerous unresolved challenges. Although oxide-based electrolytes exhibit superior stability in air, they demand highly sophisticated manufacturing processes—requiring high-temperature sintering above 800 degrees Celsius to achieve dense, defect-free ceramic formation. This poses extremely stringent requirements for producing large-size, ultra-thin, and flawless solid-state batteries, posing significant hurdles to scaling up battery production. Moreover, the production environment and raw material purity needed for all-solid-state batteries are even more demanding than those for conventional lithium-ion batteries. As a result, mass-producing large-scale electrolyte films could prove particularly difficult, potentially limiting early-stage commercialization of all-solid-state batteries to small-scale manufacturing—targeted initially at niche applications where cost tolerance is relatively higher. According to a report by South Korea’s SNE Research Institute, even once full-scale production is achieved, the cost of all-solid-state batteries will remain at least twice that of lithium-ion batteries, directly contradicting the automotive industry’s ongoing quest to reduce costs in the burgeoning new-energy vehicle sector.
In the frenzied feast of solid-state batteries, the smartest capital was the first to cool down. Similarly, at the end of last year, Morgan Stanley analyst Adam Jonas released a research report downgrading QS’s rating from “Hold” to “Reduce,” and slashing its price target from $12 to just $4—a new low on Wall Street. The reasons cited include uncertainties surrounding the timeline for scaling up production and securing automakers’ endorsements, as well as the company facing an increasingly challenging financing environment. Adam Jonas noted that while solid-state batteries may still represent the future of energy storage, the reality is that achieving this goal has proven far more difficult—and distant—than both we and the market had anticipated. Meanwhile, as the company’s market capitalization continued to shrink, its stock price plummeted from a peak of $132 to just $7 today. In response, QS has begun cutting jobs, seemingly entering the "Trough of Disillusionment" phase on Gartner’s Technology Hype Cycle. As a result, the bubble that once surrounded this former dark horse is now starting to burst.
While QS continues to struggle bitterly in the dual dilemma of technology and capital, U.S.-based new-energy vehicle brand Fisker has already announced it’s abandoning its plans to develop solid-state batteries, opting instead to launch conventional electric vehicles powered by liquid lithium-ion batteries. Many may still recall that back in 2018, the company claimed it would begin mass-producing solid-state batteries within just a few months. Now, its founder can only offer this explanation to deflect the initial embarrassment: "Solid-state battery technology is like that—just when you think you’re 90% there, almost reaching your goal, you realize the remaining 10% turns out to be far more challenging than the first 90%."
In Toyota's story of solid-state batteries, delays have become a key word. By consistently betting on hybrid technology in the new energy sector, Toyota has lagged behind in pure-electric vehicle technology. To catch up, the company has been eager to take the lead by proactively investing in solid-state battery technology early on. Its foray into solid-state batteries can be traced back as far as 2008, when Toyota announced a collaboration with the British startup Ilika to jointly develop solid-state battery materials. Fast-forward 10 years, and Toyota now counts at least seven or eight partners working alongside it on solid-state battery research. Even its patent portfolio in this area has swelled to over 1,300—far surpassing the combined total of the next four Japanese and Korean companies ranked second through fifth. Yet despite these impressive strides, the challenge of advancing from lab-scale prototypes to full-scale production remains as daunting as embarking on an epic journey to retrieve sacred scriptures from the West. At an event called the "2030 Battery Strategy Conference" two years ago, Toyota admitted that progress in developing high-energy-density all-solid-state batteries hasn't been as promising as hoped, particularly in overcoming the critical hurdle of finding the right sulfide-based electrolyte material.

Against the backdrop of unresolved technical challenges, Toyota has been forced to repeatedly postpone the mass production of its all-solid-state products. Back in 2019, the company announced it would debut a new energy vehicle equipped with solid-state batteries during the 2020 Tokyo Olympics. However, even though the Olympics were delayed by a year, giving Toyota additional time, consumers still haven’t seen the long-awaited solid-state battery-powered model hit the market. Meanwhile, the company has chosen a somewhat puzzling commercial strategy: prioritizing the rollout of solid-state battery technology in hybrid vehicles rather than directly applying it to pure electric models from the outset.
Considering the electrification trend—particularly the unstoppable rise of pure electric vehicles in China—the twilight of gasoline-powered cars is already upon us, while the dazzling dawn of all-electric models casts a harsh light, leaving the market prospects for non-range-extended hybrid vehicles looking increasingly bleak. On top of this, Toyota itself has an excessively long vehicle technology iteration cycle, typically spanning 4 to 5 years. Its sole all-electric model, the bZ4X (available with specific configurations and pricing), initially enjoyed a successful debut—but was soon followed by a massive recall (albeit not due to battery issues). Just days ago, Toyota officially announced the complete discontinuation of this project.
Toyota's decision once again highlights the Japanese automotive giant's uncertainty in the era of new energy, despite the company's announcement that it plans to launch solid-state batteries by 2025. However, "the boy who cried wolf" has left people reluctant to raise their expectations for Toyota's advancements in solid-state battery technology.
Toyota may not have much time left to deliver on its promises. At the recently concluded Shanghai Auto Show, CATL unveiled its all-solid-state battery—boasting a remarkable energy density of up to 500 Wh/kg, along with exceptional safety—and crucially, it’s set for mass production as early as this year. As a result, once these advanced solid-state batteries hit the market, solid-state technology may very well lose its commercial viability altogether. Once hailed as the ultimate breakthrough in battery technology, eagerly anticipated by millions, solid-state batteries now seem increasingly unable to live up to their lofty titles: the "terminator" of internal combustion engines and the "holy grail" of lithium-ion batteries. Instead, they’re beginning to resemble nothing more than a collective dream—a shared illusion built on what appears to be the wrong technological path. Yet the moment of reckoning is fast approaching.

Translated from Sina Auto

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