In the second half of 2026, the global power battery industry is in a critical transition period characterized by bottoming-out costs, diverging market landscapes, and technological shifts. On one hand, large-scale mass production has driven significant cost reductions, propelling the continuous rise in the penetration rate of new energy vehicles (NEVs). On the other hand, sluggish battery demand in the U.S. market, intensifying cost-reduction pressures on enterprises, coupled with policy fluctuations, have led to a structural divergence in the R&D pace of new technologies in the industry. The parallel advancement of stock optimization and frontier exploration has become the core theme of current power battery technology iteration.
Industry data corroborates the current diverging landscape. The "2025 Power Battery Industry Report" released by the Volta Foundation shows that the global average price of power battery packs has fallen to $108/kWh, hitting a historic low, with the unit price of lithium iron phosphate (LFP) power battery packs from Chinese manufacturers at merely $84/kWh. The continuous decline in costs is steadily narrowing the purchase price gap between NEVs and traditional internal combustion engine vehicles, laying the foundation for industry popularization. Data from the International Energy Agency (IEA) indicates that global electric vehicle (EV) sales surpassed 20 million units in 2025, a 20% year-on-year increase. Sales are projected to climb to 23 million units in 2026, accounting for 28% of total global new car sales, confirming that the overarching trend of NEV substitution remains unchanged.
However, beneath the dividends of industry growth, crises and adjustments are emerging simultaneously. Data from the Federal Reserve Bank of Dallas reveals that following the Trump administration's revocation of multiple clean energy support policies and tax credit incentives, the total value of suspended or cancelled power battery factory investments stands at at least $10 billion.
Tightening policies coupled with sluggish market demand are driving strategic adjustments in the industry. An analysis report from the Federal Reserve Bank of Dallas in March this year pointed out that some battery R&D enterprises are prioritizing the deep cultivation of existing lithium-ion battery systems, compressing production costs, and temporarily suspending heavy investments in next-generation technologies. Meanwhile, many other companies remain committed to frontier R&D, exploring new technological breakthroughs, such as the continuous development of new battery cells, with manganese-rich lithium-based batteries being one of the focal points.
Furthermore, the industry's focus is accelerating its shift toward the energy storage track. Compared to the high-cost, high-energy-density nickel-based batteries predominantly used in U.S. EVs, energy storage scenarios favor the more cost-effective LFP batteries. Daniel Parr, an industry analyst at battery research firm IDTechEx, stated that the surging demand for LFP in the energy storage market and the redirection of corporate resources toward energy storage may, to a certain extent, slow down the R&D and iteration pace of high-end batteries for long-range vehicles.
Continuous Refinement of Lithium-Ion Systems: Stock Iteration Remains the Industry Mainstream
Before the comprehensive commercialization of all-solid-state batteries, traditional lithium-ion batteries remain the absolute mainstay of the market. The industry has not fallen into technological stagnation; instead, it is undergoing continuous and refined iteration across four dimensions: increasing energy density, reducing costs, extending lifespan, and enabling fast charging, giving rise to multiple optimization routes with industrialization potential.
Upgrading the material system is the core direction of lithium-ion battery iteration. The Volta Foundation points out that the current mainstream optimization paths in the industry are divided into two categories. The first is the large-scale implementation of lithium manganese iron phosphate (LMFP). As an advanced version of LFP, it incorporates manganese to make up for the energy density shortfall, balancing low cost and high performance. The second is the continuous improvement of anode and cathode material formulations, achieving simultaneous extension of battery lifespan and enhancement of energy density through refined proportion optimization.
On this basis, high-manganese system batteries have become the core choice for automakers to reduce costs and increase efficiency. Michael Liu, Research Director at the Volta Foundation, stated that Ford and General Motors (GM) are focusing on manganese-rich lithium-based batteries. The manganese content in their cathodes can reach up to 70%, increasing the energy density by one-third compared to traditional lithium-ion batteries, while significantly reducing the use of scarce and expensive metals like nickel and cobalt, a design that aligns well with the automakers' development needs for cost control and efficiency enhancement.
The technological implementation by leading enterprises continues to highlight the effectiveness of lithium-ion stock iteration. Panasonic, a long-term supplier for Tesla, is developing anode-free cells. Battery packs equipped with these cells deliver a 25% capacity gain; with no change in volume, they can boost the Tesla Model Y’s range by 90 miles.
Chinese automaker BYD has completed the iterative upgrade of its Blade Battery. The second-generation Blade LFP battery features a 5% increase in energy density and a leapfrog breakthrough in fast-charging capabilities: it takes just 5 minutes to charge from 10% to 70%, and under 10 minutes to reach 97% from 10%.
Daniel Parr commented that BYD's new-generation Blade Battery is the most breakthrough technological achievement in the power battery sector over the past year, significantly enhancing the comprehensive competitiveness of LFP batteries.
Semi-Solid-State Batteries: The Mainstream Transitional Solution for Industrialization
Traditional liquid lithium-ion batteries suffer from safety shortcomings such as flammable electrolytes and the risk of thermal runaway, while all-solid-state batteries are difficult to mass-produce in the short term. Against this backdrop, semi-solid-state batteries have become the mainstream transitional route for the global power battery industry to balance safety, performance, and mass production difficulties. It is also a differentiated technological track where Chinese automakers have taken the lead in achieving large-scale vehicle installation.
Compared to fully liquid lithium-ion batteries, semi-solid-state batteries use gel-state electrolytes, which significantly reduce flammability risks and markedly improve safety. Compared to all-solid-state batteries, which are still in the critical R&D stage, their production processes are more compatible with existing lithium-ion production lines, resulting in lower implementation costs and lower mass production difficulties.
The Volta Foundation believes that semi-solid-state cells are not merely transitional products, but a key technology capable of meeting the current demands of high-end EVs and energy storage scenarios, while accumulating experience for the technological iteration and process optimization of all-solid-state batteries.
Currently, semi-solid-state batteries in China have achieved commercial implementation. NIO's 150 kWh semi-solid-state battery pack has completed mass production and vehicle installation, significantly increasing the range limit of its models. The SAIC MG4 has launched in Europe fitted with a standard semi-solid-state battery pack, marking the global rollout of premium battery technology made in China.
Meanwhile, the application scenarios for semi-solid-state batteries are continuously expanding. Beyond the passenger vehicle sector, they are gradually being applied in energy storage scenarios such as data centers and power plants, becoming a new growth pivot for the industry.
Dawn of All-Solid-State Batteries: Large-Scale Mass Production Still Requires Breakthroughs
All-solid-state batteries are regarded by the industry as the core development direction for next-generation power batteries. This solution completely abandons flammable liquid electrolytes in favor of solid electrolytes, which can drastically reduce the safety risks of fires and thermal runaway in lithium batteries. It also comprehensively outperforms traditional lithium-ion batteries in energy density, charging speed, and cycle life, making it the core breakthrough direction for next-generation power batteries.
Global automakers and research institutions have initiated intensive deployments and real-world vehicle testing. Toyota has explicitly planned to launch multiple solid-state battery vehicle models between 2027 and 2028. Mercedes-Benz and BMW are continuously advancing real-world road testing. In September last year, Mercedes-Benz test data showed that the EQS pure electric sedan equipped with a lithium-based solid-state battery achieved a range of nearly 750 miles.
The North American market has witnessed a major breakthrough. Stellantis Group completed the road testing of the Dodge Charger Daytona model with solid-state batteries in June this year. Fitted with lithium-based solid-state batteries developed by the U.S.-based Factorial Energy, the vehicle completed North America’s first road test of a solid-state battery-equipped production vehicle prototype.
Multiple Chinese automakers, including BYD, also plan to launch high-end models equipped with solid-state batteries as early as 2027 to capture first-mover advantage in this emerging market.
However, a massive gap remains between technological ideals and industrial reality, and the industrialization of all-solid-state batteries still faces multiple bottlenecks. The technology still suffers from severe performance degradation at low temperatures, and its manufacturing costs exceed those of conventional lithium-ion batteries. Meanwhile, special production processes are required to prepare uniform solid electrolyte layers and delay rapid cell degradation. FinDreams Battery stated in a report that various solid-solid interfaces inside sulfide-based all-solid-state batteries are prone to interfacial side reactions and physical delamination. The operational performance of the battery highly depends on high-pressure stress support, which is the core challenge restricting the industrialization of all-solid-state batteries. Systematically clarifying the evolution mechanism of interfacial failure is also the key theoretical foundation for the forward R&D of all-solid-state batteries that can operate stably under medium- and low-voltage conditions.
Additionally, the insufficient large-scale supply of key materials and high patent barriers significantly constrain the mass production progress. Most industry analysts judge that all-solid-state batteries targeting the mass consumer market with large-scale commercial value will most likely achieve large-volume vehicle installation applications around 2030 at the earliest. In the coming years, they will remain in the stage of technological refinement and small-scale trial production.
Long Road Ahead for Novel Batteries: Short-Term Replacement of Mainstream Lithium-Ion Unlikely
Beyond the dual-line iteration of lithium-ion and solid-state batteries, novel battery systems such as sodium-ion batteries continue to achieve R&D breakthroughs. However, constrained by performance and cost shortcomings, it is difficult for them to shake the existing power battery landscape in the short term. Industry analysts generally believe that various novel batteries are still in a very early R&D stage, with a long cycle for commercial implementation.
Relying on the advantages of abundant sodium resource reserves and low raw material costs, sodium-ion batteries are one of the non-lithium battery routes with promising industrialization prospects at this stage. However, their core shortcomings are equally prominent: the energy density is lower than that of LFP batteries, and they cannot meet the mainstream 300-mile range demand of U.S. consumers at this stage.
Meanwhile, Michael Liu added that sodium-ion batteries require entirely new production and charging equipment, entailing high retrofitting costs. Multiple battery research institutions, including the Volta Foundation, predict that if sodium-ion batteries are used in passenger vehicles, it may not be until the "2030-2035" period, and initially, they will only be suitable for low-speed mobility vehicles, making it difficult to match the range standards of mainstream family cars in the short term.
Nevertheless, sodium-ion batteries hold broad prospects in the energy storage track. Affected by the decline in U.S. EV sales and idle automaker capacity, industry capacity is accelerating its shift toward energy storage. General Motors has partnered with Peak Energy to jointly develop sodium-ion batteries specifically for energy storage, with GM responsible for supporting battery production. Ford is also focusing on the R&D of LFP batteries specifically for energy storage, leveraging idle capacity to open up a new growth curve.
Conclusion: A Decade of Iteration to Define the Landscape, Prioritizing Stock Optimization and Sustaining Frontier Layouts
Looking at the current evolutionary logic of power battery technology, the industry has bid farewell to the single model of high-speed expansion and entered a new stage of stock optimization, gradual innovation, and long-term layout.
Daniel Parr summarized that over the next decade, optimizing existing mature lithium-ion systems and balancing costs with product reliability will remain the core work of the industry. Manganese-rich lithium-ion batteries, improved LFP, and semi-solid-state batteries are expected to occupy the market mainstream for a long time.
As the core technological direction for the next generation, although the dawn of all-solid-state batteries has emerged, mass production and implementation still require time for refinement. Novel batteries such as sodium-ion will deeply cultivate segmented energy storage and low-end mobility markets, forming a differentiated supplement.
Despite tightening U.S. policies and the industry being in a downward cycle, global leading manufacturers and startups continue to advance technological R&D. The long-term development direction of power batteries iterating toward higher safety and higher energy density possesses strong certainty. The industry will move toward a new stage of higher safety, higher energy efficiency, and lower costs through continuous innovation.