March 2, 2024

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Volkswagen Expands Search for Solid-State Battery Breakthrough Amidst Industry Challenges

In a bid to overcome hurdles in developing solid-state electric car batteries, Volkswagen (VW) is diversifying its efforts beyond its existing partnership with QuantumScape. While the collaboration with QuantumScape has faced delays, VW is now engaging in discussions with Blue Solutions, a French company known for producing solid-state batteries for Daimler electric buses.

Sources with direct knowledge of the discussions reveal that VW and Blue Solutions are exploring the possibility of adapting the current solid-state battery design for electric cars. An anonymous source disclosed that both companies aim to formalize a joint development agreement in the coming months.

Solid-state technology is considered the “holy grail” of electric vehicle (EV) batteries, promising extended driving ranges and quicker charging times compared to conventional lithium-ion packs. Despite the potential benefits, technical challenges have impeded progress in the field.

Volkswagen, in response to inquiries, affirmed the progress of its collaboration with QuantumScape but refrained from commenting on discussions with Blue Solutions. Blue Solutions, a subsidiary of the French conglomerate Bollore, acknowledged its involvement in developing passenger car batteries, having signed deals with BMW and another undisclosed company, with ongoing talks with a third.

The race for solid-state batteries involves global automakers such as Toyota, BMW, and others, each aiming to address the complexities that have hindered the commercial success of this technology. Rory McNulty from Benchmark Mineral Intelligence noted that while there is verified data and technology, the key challenge is achieving reliability at scale.

Blue Solutions faces its own set of challenges, primarily reducing the charging time of its current batteries from four hours to a target of 20 minutes for passenger cars. The company envisions constructing a “gigafactory” by 2029 to support the production of these advanced batteries.

Market enthusiasm for solid-state batteries has dwindled, with global venture capital deal activity in the sector dropping by 72% in the previous year, reaching $146 million, according to PitchBook data. Investors, like Ibex Investors partner Jeff Peters, are reevaluating the risks associated with solid-state technology.

While QuantumScape, backed by VW’s $300 million investment, initially aimed for commercial battery production in 2024, challenges persist. The company shipped prototypes to potential customers in late 2022, yet mass commercial production remains on the horizon. QuantumScape’s shares have seen a decline from a peak of $132.70 in December 2020 to $7.37, reflecting uncertainties surrounding its timeline.

Toyota, another major player, has pushed back its solid-state battery production startup to 2027 or 2028, despite claiming a technical breakthrough with a projected driving range of 750 miles and a 10-minute charging time.