Toyota Pauses Factory Construction. Is Solid-State Battery "Doomed" Again?

Just now, a bucket of cold water was poured on the solid-state lithium-ion power battery, a topic that has recently regained popularity.

Just this Monday, Toyota Motor announced the suspension of its advanced power battery factory project in the New Matsuyama Coastal Industrial Park in Karita Town, Fukuoka Prefecture.

The site of the battery factory project in the New Matsuyama Coastal Industrial Park, Karita Town, Fukuoka Prefecture

In Toyota's original plan, this brand-new battery factory was to be used to deploy its first solid-state lithium-ion power battery production line. This move would help this Japanese automotive manufacturing giant regain its industrial advantage in the new energy vehicle field with its "next-generation EV".

Actually, as early as last Friday (the 7th), the local government of Fukuoka had "spoiled" the news of the suspension of the factory construction a few days in advance. At that time, Fukuoka Governor Seitaro Hattori revealed to local media who came to inquire at the county government that the construction plan for the Karita Town battery factory would be postponed again, and gave the official reason from Toyota - considering the slowdown in global demand, Toyota would revise the project plan.

Of course, the progress of the Karita Town battery factory project since its announcement can actually be described as "full of twists and turns".

Because as early as the end of March this year, Toyota officially announced a "delay" for it, and the reason at that time was "the demand for electric vehicles was lower than expected". In the original plan, this factory was supposed to start construction in early 2025 and be put into production by 2028.

Since 2023, when Toyota Motor publicly promoted its "solid-state battery" with high-profile, many observers, especially those in China, have placed extraordinary expectations on this seemingly revolutionary product.

No one denies its advanced nature and technical feasibility. However, when it comes to issues such as commercialization or technological implementation, there are either delays or just empty promises. It's a bit like the "Schrödinger's Cat" in quantum mechanics.

An Ending That Was "Spoiled" in Advance

Toyota has no clear statement regarding the new construction and production schedule for the Karita Town factory. The official statement on Monday only stated that it would "re-review and adjust the plan", and regarding the time limit, it said it would be "within one year".

Don't think this means the factory's schedule will be postponed by one year, considering the premise of "re-review". As for the "adjusted plan" after the review, it's possible that whether the new battery factory will still have a solid-state battery production line could become a question.

The fundamental reason for Toyota's hesitant decision on this factory lies in the global market expectations for new energy vehicles. In essence, this "re-review and adjustment of the plan" is just a continuation of the judgment made at the end of March that "the demand for electric vehicles was lower than expected".

For a global automotive giant like Toyota Motor, constantly monitoring the trends in major markets has become an instinct for survival. In the past two years, problems have emerged in the markets of the European Union and the United States, which were once the most active developed markets in promoting the transformation to new energy vehicles.

The era of generous subsidies from various countries has passed...

Starting from January 2024, when Germany lowered the price limit for eligible vehicles (only subsidizing pure electric vehicles priced below 45,000 euros with 4,500 euros), core EU member states such as France and Italy followed Germany's example and successively reduced their subsidies for new energy vehicles in their respective markets.

Especially in Italy, although the policy of subsidizing individuals who purchase pure electric vehicles with 3,000 euros has remained unchanged for a long time, the sales price threshold of 35,000 euros is the lowest among EU countries, not even enough to buy a base - model ID.3 (which costs slightly over 38,000 euros).

The "top - of - the - line" ID.3 is priced at 38,180 euros in Germany, equivalent to 314,000 RMB

Even outside the EU, Norway, which was the first to promote new energy vehicles, recently announced that it would cancel subsidies within the next two years, citing the reason that "the goal of electrifying newly - registered passenger vehicles has basically been achieved". To relieve financial pressure, its government even plans to levy value - added tax on some popular "medium - sized" products such as the Tesla Model Y and Volkswagen ID.4.

Compared with the gradual and country - by - country subsidy reduction in Europe, the United States, another major market for Toyota, adjusted its policies relatively late, but the measures are much more extreme -

On July 4th this year, after the "Big and Beautiful" bill was passed by both houses and finally signed, the 7,500/4,000 US dollar tax credit policy for new/used pure electric vehicles, which had been in effect across the United States for 17 years, was abolished.

"It's MAGA time, and you still want subsidies?"

The importance of the North American and European markets for Toyota's solid - state battery policy is self - evident. Although Toyota's main sales models in these two markets are fuel - powered and hybrid vehicles, and it has actually sold very few new energy vehicles. However, these two markets have two very significant advantages - firstly, consumers generally have strong purchasing power, and secondly, the competition is relatively "simple".

The first advantage means that the market can better bear the relatively high costs of solid - state batteries in the initial stage of mass production. As for the second, given Toyota's current progress in the fields of new energy and automotive intelligence, overly fierce competition would put it in a passive position. After all, there is only one Tesla in the United States.

In the Chinese market, although the total sales volume decreased last year compared with previous years, it still reached 1.799 million units, accounting for 16.62% of Toyota's global total sales. However, this market is currently in a state of fierce competition. Not only are local competitors extremely tough, but there is also a "cross - border" powerhouse like Tesla.

China is home to an important production base for Tesla

All in all, if you carefully consider the current situation, Toyota's intention to back out, which emerged as early as the end of March this year, is quite obvious. For the Karita Town factory, it seems difficult to avoid the fate of "re - reviewing and adjusting the plan".

The Principle Is Sound, but Technical Bottlenecks Abound

The difficulty in mass - producing solid - state batteries is a typical case where the theory is fully understood, but it is overwhelmed by various technical problems during mass - production and commercialization.

Firstly, there is the well - known first problem in solid - state lithium - ion power batteries - the interface impedance problem.

The so - called "solid - state" of solid - state batteries actually refers to the fact that compared with the liquid electrolyte in the currently mainstream ternary lithium/iron phosphate batteries, its electrolyte is solid. This leads to problems such as poor interface stability and high impedance due to the "solid - solid" contact between the electrolyte and the electrode material, which greatly affects the battery's power output and lifespan.

In addition, solid - state electrolyte materials such as sulfides may also have problems with low ionic conductivity and poor chemical stability. Although there is no risk of explosion and combustion when the lithium sulfide electrolyte is exposed after the shell of the solid - state battery is accidentally damaged, its chemical properties cause it to produce highly irritating and toxic hydrogen sulfide gas when in contact with water.

The lithium - metal anode technology also has problems to be solved. After using a lithium - metal anode to pursue high energy density, the safety risk of lithium dendrite growth piercing the electrolyte and causing a short - circuit during the charging and discharging process must be addressed.

Upon closer inspection, even for a product that is theoretically feasible, there are relatively serious technical problems that need to be solved in each of its components.

Even if the above problems are solved, in the actual production stage, the unique mechanical properties of solid - state electrolytes will also cause great trouble. From the current perspective, the electrode processes (dry/wet) and dedicated production equipment suitable for large - scale mass production are not yet mature.

A solid - state battery production line sample displayed by a domestic enterprise in July this year

Of course, there is also good news. For example, in 2021, Toyota Motor chose to cooperate with Sumitomo Metal Mining to develop the cathode material for solid - state batteries. The focus of their technological research was to solve the problem of material degradation of the cathode during repeated charging and discharging cycles. Recently, it was officially announced that relevant technology had achieved success.

According to Toyota, using the partner's exclusive powder synthesis technology, it has successfully developed a "high - durability cathode material". Currently, Sumitomo Metal Mining has announced plans to start mass - producing the new cathode material by 2028.

It took more than four years to develop just one cathode material. As for mass production, it will take another three years...

A solid - state battery sample displayed by Samsung SDI

In fact, it is not impossible to force the mass production of solid - state batteries, but it will come at a high comprehensive cost. Just the raw material preparation alone will cost several times more than the current best ternary lithium batteries. At the same time, in terms of key performance indicators such as energy density, the initial products may not have a significant advantage over traditional ternary lithium batteries.

On September 1, 2024, during the World Power Battery Conference that year, Zeng Yuqun, the chairman of CATL, answered the outside world's questions about the development of the domestic solid - state battery industry. He used an analogy with a scale from the worst (1) to the strongest (10): The current highest level in the industry is only 4 - some device samples have been made and some experimental verifications have been carried out.

Zeng Yuqun's judgment can be considered authoritative

It has only been fourteen months since the authoritative figure was given by the leading player in the industry. It's probably the limit if it can improve by one or one - and - a - half points compared to then. The Japanese are not superhuman, so how much better can they be?

In short, although solid - state batteries are still a type of lithium - ion power battery, a complete industrial system from key materials (solid - state electrolytes, high - performance anodes and cathodes) to cell manufacturing and packaging has not yet taken shape. In contrast, the currently mature ternary/iron phosphate lithium batteries even have a relatively mature recycling system. In its current state, solid - state batteries have basically no competitiveness.

The mass production of solid - state batteries is also a process of competing with the production capacity of old - style ternary/iron phosphate lithium batteries

Actually, it is not impossible to increase production quickly - by rapidly iterating and upgrading to solve technical problems in a short period of time. After all, many domestic battery manufacturers that have survived the fierce competition so far did exactly that when they first entered the new