Japan's use of all-solid-state batteries (ASSBs) is rising, but whether these will replace lithium-ion (Li-ion) batteries to become the dominant battery type used in the electric vehicle (EV) industry remains to be seen.
Toyota and Idemitsu in October announced their mass production strategy for EVs, leading to market expectations of higher ASSB use. Some anticipate that the ASSB could not only replace the current Li-ion battery but become the next mainstream battery type. But industry experts reiterate the importance of providing a variety of battery types for consumers.
The ASSB is "an option beyond the liquid-type battery," said Toyota's chief executive officer Koji Sato.Sato also pledged to start the mass production and further innovation of ASSBs in Japan. ASSB technology allows for faster charging and stable power supply under severe temperatures, among other advantages over the more commonly-used Li-ion batteries.
Mass production means supplying at least several thousand tonnes of solid electrolytes per car production line, to produce tens of thousands of units of cars, said Idemitsu, which develops sulphide solid electrolytes through technologies used in their traditional business of oil refining. But it did not provide more specific numbers. This is the firm's output plan after it raises production capacity to several hundred tonnes of solid electrolytes per year in the 2027 fiscal year that ends in March 2028, according to Idemitsu.
"They are probably now getting very close to the mass production engineering level of the solid-state [batteries]," says managing director and head of equity research at SBI Securities, Koji Endo. But Endo did not comment on whether the ASSB would become the dominant battery type in the EV market in future. On whether the ASSB would overtake Li-ion batteries, "the likely answer is that there's going to be different types of batteries coexisting at the same time," Endo told Argus. In line with this view, Toyota said it will maintain its "multi-pathway approach, meaning that Toyota will continue producing multiple types of EVs including plug-in hybrid vehicles, fuel cell vehicles and hybrid electric vehicles along with battery EVs. "We will continue to tailor electrification to the needs of customers and individual regions by drawing on the strengths and characteristics of each vehicle type," said Sato. The latest developments in ASSBs would enable Toyota to have an additional option on top of the other types of batteries.
Idemitsu will produce lithium sulphide by combining lithium hydroxide generated from its participation in lithium mine operations in Australia, and sulphur components, which are by-products of refining. It will then generate solid electrolytes from lithium sulphide. Toyota will produce ASSBs by incorporating Idemitsu's solid electrolytes.
Differentiation matters
There is a wider view in the market that the Japanese automobile industry is falling behind in the global market, given its lower electrification ratio compared with US and the Chinese producers, which have a huge lead in the EV market. But Toyota's move could change this, as there are US and Chinese automobile producers — especially those which are dependent on EV sales — with less options for fuel types that are now struggling to survive under severe price competition.
"I think an important part was the desire to differentiate," says deputy head of research at CLSA Securities Japan, Christopher Richter. "Not just very quickly throw a battery on a car platform and market something that isn't particularly differentiated... and now you're starting to see that differentiation process coming [as] Toyota is talking about five different types of batteries tailored for different types of needs and affordability, and so that's perhaps a better thought-out process."
