China risks losing the solid-state battery race

China is not falling behind in the battery race. On the contrary, the country still controls a large share of the industrial chain supplying electric cars sold worldwide.

According to the International Energy Agency, China accounted for more than 80% of global battery cell production in 2025, while also leading the manufacture of active materials used in electric-vehicle batteries.

This dominance is driven by giants such as CATL, BYD and CALB, as well as an industrial network and domestic market of enormous scale. However, a warning now coming from China itself suggests that, while the country may retain its lead in mass battery production, it risks surrendering some of its technological advantage in solid-state battery development.

A report cited by the Chinese press warns that, despite leading scientific output and patent volumes, China may be unable to achieve the same dominance in solid-state battery manufacturing. The reason lies in the nature of the technology itself: this is not simply another advancement of existing batteries. It is a different race, involving alternative materials, new industrial processes and far fiercer competition for intellectual property.

Solid-state batteries operate under different rules

Solid-state batteries replace the liquid electrolyte found in current batteries with a solid material. In theory, this change could deliver higher energy density, improved thermal safety, faster charging and more compact battery packs. In short, it offers everything the car industry wants to make electric vehicles more attractive.

In practice, though, they are a major headache. The technology remains difficult to industrialise, with challenges ranging from material stability and durability to dendrite formation, the sensitivity of certain electrolytes to moisture, material costs and the ability to manufacture millions of cells at consistent quality - yes, it sounds like we are speaking Chinese. Jokes aside, Auto Talks explains what dendrites are and outlines some of these drawbacks:

Put simply, producing millions of lithium-ion LFP (Lithium Iron Phosphate) or NMC (Nickel, Manganese and Cobalt) cells with high industrial efficiency is one thing. Mastering a technology that is still emerging from the prototype stage, and relies on entirely different chemical interfaces and manufacturing methods, is another. China’s scale remains a huge advantage, but it may not be enough in this particular race.

The most important patents are outside China

China holds roughly 35% of patents connected to solid-state batteries and around 39% of patents relating to electrolytes. Its scientific output has risen sharply, from 21 papers in 2015 to 562 in 2023. These figures clearly demonstrate strength, but they do not tell the whole story.

The picture shifts when patent concentration among the most significant players is considered. Of the world’s 30 leading organisations for solid-state battery and electrolyte patents, 17 are Japanese, seven Chinese, five South Korean and just one European. No Chinese organisation features in the Top 10.

This does not mean Chinese companies will be shut out. They could create their own solutions, work around patents through alternative processes, license technology or challenge existing registrations. Even so, intellectual property becomes increasingly important as a technology moves beyond the laboratory and into global supply agreements with car manufacturers.

Is this Toyota’s moment?

Toyota is the name to watch most closely in this context. The Japanese brand has worked on solid-state batteries for years and has strengthened partnerships in materials, one of the decisive areas for turning this promise into a manufacturing reality. It currently accounts for 40% of global solid-state battery patents.

Idemitsu Kosan is developing lithium sulphide to support Toyota’s plans, with a new facility in Japan expected in June 2027. According to Reuters, the investment is expected to be about 21.3 billion yen (roughly €114.9 million at the current exchange rate), with annual capacity sufficient for 50,000 to 60,000 electric vehicles.

In South Korea, companies including Samsung SDI, LG Energy Solution and SK On are also part of this race. South Korea’s advantage lies in its accumulated industrial experience in high-energy-density cells and its relationships with global car manufacturers.

Europe will remain dependent

For Europe, this potential reshaping is uncomfortable. Europe’s car industry is already heavily reliant on Asia for batteries and has yet to convert its industrial ambitions into a supply chain comparable with those of China, Japan or South Korea.

According to the International Energy Agency, almost all battery cells used globally are supplied by companies based in China, South Korea or Japan. In addition, the number of Chinese producers in the European Union has almost doubled since 2023.

If China retains its advantage in high-volume batteries while Japan and South Korea gain ground in solid-state technology, Europe’s strategic room for manoeuvre will remain limited, regardless of the industrial plans Brussels is able to mobilise.