Solid-state batteries are hailed as a groundbreaking technology that is poised to revolutionize the battery industry.

In China, the solid-state battery industry has exhibited remarkable growth, with over 200 companies engaged in this sector, leading to over 200 billion yuan in investment plansHowever, despite the promising prospects, solid-state batteries are still in their nascent stages and have yet to see widespread application.

In terms of solid electrolyte content, solid-state batteries can be categorized into semi-solid and all-solid types

Industry expert He Jiachuan has noted that if all-solid batteries can achieve successful commercialization, it would mark a significant disruption in the battery sectorThe advantages of all-solid batteries include an energy density that could be two to three times greater than current liquid electrolyte batteries, significantly improved safety, and rapid charging speeds that could alleviate range anxiety.

Nevertheless, the future commercialization of solid-state batteries appears to hinge on the belief among experts that, in the near term, semi-solid batteries will dominate the market while all-solid batteries remain in the laboratory development and pilot production phases

• Junda New Energy Files for Hong Kong IPO
• World's Third-Largest Economy Faces Growth Slowdown
• Tesla Price Hike Drives Musk's Wealth to New Heights
• 2025 Guide to Asian Investments
• Quantum Computing Breakthrough Sparks Market Surge

Mass commercialization is still a distant goal.

Wang Rongjin further analysis that semi-solid batteries have already made their way into small-scale automotive deploymentIn the next two to three years, large-scale deployment could be on the horizon"This year marks the beginning of the commercialization era for semi-solid batteries," stated Ma TianyiHe anticipates that the quantity of semi-solid battery installations will experience rapid growth over the next three yearsIn contrast, the technical challenges inherent in all-solid battery development are more demanding, with companies globally, including those in China, Japan, South Korea, and North America, vigorously pushing for advancements in this area.

"Looking ahead, semi-solid batteries may serve as a transitional product for a lengthy period, potentially extending 10 to 20 years," said Wang Rongjin

Drawing parallels with the automotive industry, while the long-term objective of electrification is fully electric vehicles, hybrid vehicles have continued to demonstrate strong market demand during the interim transition period.

Ma Tianyi also suggested that innovations in lithium battery technology are often incremental, making it reasonable to expect transitional solutions between liquid and all-solid electrolytes.

Concerning the integrated path of solid-state batteries into the market, Ma Tianyi outlined that for new technologies to take root, two main challenges must be overcome: addressing technical and cost-related issues

On one hand, new battery performance metrics must not only meet but exceed those of existing liquid systemsOn the other, further cost-reduction measures must be implementedAt present, the all-solid battery technology is still grappling with technical challenges, including the development of entirely new electrolyte systems and interface issues between solid electrolytes and electrodesIn contrast, semi-solid batteries have largely cleared the technological hurdle and are now focused on reducing costs.

He Jiachuan posits that the greatest challenge in solid-state battery development lies in battery manufacturers' ability to disengage from their lucrative traditional battery business models, a decision fraught with difficulty for many companies

Continuing to invest in traditional lithium batteries becomes less appealing when confronted with the uncertain path of developing solid-state batteries, which demand higher technical know-how and exploration.

However, for some new entities, this creates an opportunityCompanies unencumbered by legacy issues can direct all available resources towards researching and developing solid-state batteries, effectively pushing traditional companies towards necessary technological upgrades and transformations, as highlighted by He Jiachuan.

According to research from the Gaogong Industry Research Institute, between the start of this year and the third quarter of 2024, there have been 14 funding rounds in the solid-state battery sector, amassing over 10 billion yuan in investments

From 2021 to 2023, of the total financing in the solid-state lithium battery domain, 52% was directed toward battery segments, 32% to solid electrolytes, and the remaining 16% was split evenly between solid electrolyte membranes and other solid-state applications.

Investor Wang Rongjin emphasizes the importance of companies possessing core materials and a profound understanding of their material systemsWith China's battery manufacturing technology being relatively mature, manufacturing is no longer seen as a barrier to entry; rather, it is the material systems—encompassing solid electrolytes, high-energy density cathode materials, lithium metal anode or silicon-carbon anode materials, along with auxiliary materials like adhesives and coatings—that represent the core competencies.

Ma Tianyi elaborated on the valuation models for solid-state battery companies within the secondary market, which generally operate using an “a+b” model

In this scenario, “a” represents the more stable, established core business of the company, which serves as the foundation for its market value, while “b” represents the growth potential and expansion into the solid-state battery domainA favorable condition exists when there is synergy between the two, where the established business can effectively support the new initiatives.

In contrast, there are companies whose original business activities are substantially divorced from solid-state batteries, opting to engage through equity investments or the assimilation of research teams to secure a foothold in this burgeoning fieldMa Tianyi advises that in such cases, careful consideration should be given to the backgrounds and expertise of these teams for gauging the overall certainty of the company's transition.

The rise of solid-state batteries has the potential to transform the ecosystem of the new energy industry.

Wang Rongjin envisages that solid-state batteries will bring about comprehensive transformations in materials, equipment, and applications