The attention around semi-solid-state batteries had been fading.At the 2025 World Power Battery Conference, Wang Fang, chief scientist at the China Automotive Technology and Research Center (CATARC), made an announcement. National standards for solid-state batteries were in the works. For the first time, terminology and classification clearly distinguished three categories: solid-state, solid-liquid hybrid, and liquid.After that, the concept of semi-solid batteries fell quiet for a time.Recently, however, at a sub-forum of the 2026 Future Vehicle Pioneer Conference, semi-solid batteries once again became the focus of industry discussions.The industry's highly anticipated all-solid-state batteries are still slow to arrive. Meanwhile, the new energy vehicle sector faces a critical juncture where rapid profitability is essential. This renewed push for semi-solid technology raises a key question: What does this shift actually signify?No More Waiting for All-Solid-State BatteriesThe industry has been waiting a long time for all-solid-state batteries.On the eve of the 2025 World Power Battery Conference, Deng Chenghao, chairman of DEEPAL, revised his earlier optimism. He pushed back the timeline for mass production and installation from 2030, predicting that "true mass production likely won't arrive until 2035."Earlier, at the third World Power Battery Conference, Robin Zeng, chairman of CATL, had revealed the company's latest progress in all-solid-state battery R&D.He noted that CATL has been researching all-solid-state batteries for seven to eight years. If technology and manufacturing maturity were ranked on a scale of 1 to 9—with 1 being initial entry and 9 representing readiness for mass production—the industry is still climbing.Zeng pointed out that the current industry peak sits at roughly 4. At this stage, companies have only produced some device samples for experimental verification.So, why is the birth of all-solid-state batteries proving so difficult?Gasgoo interviewed Fang Jianhua, founding partner of Guoke Xinneng Venture Capital and an expert in new energy vehicles, on this very issue. He identified uncertainty in technical routes as a major hurdle for all-solid-state batteries.Currently, the primary solid electrolyte routes include oxides, sulfides, polymers, and halides—each with insurmountable obstacles. The sulfide route offers high ionic conductivity but demands extremely harsh manufacturing environments. "It is incredibly sensitive to moisture and oxygen. A slight slip can produce highly toxic hydrogen sulfide gas. This safety risk is almost impossible to solve right now," Fang explained. The oxide route adapts better to environments but has failed to break through the low ionic conductivity barrier. "If ions can't conduct, the battery can't charge or discharge. That is a fundamental scientific problem."Engineering challenges represent another major obstacle. "Some materials require high temperatures or high pressure to achieve ion conduction, posing unprecedented challenges to the manufacturing process," Fang described. "The technological gap between gram-level samples in the lab and ton-level mass production on the assembly line is far larger than many imagine."A missing supply chain further complicates industrialization. "From materials to equipment to processes, the entire industrial chain is immature. Every link needs to move from the lab to pilot testing, and then to mass production. That path is very long."Yield rates are also a critical bottleneck for mass production. "In a Grade 10,000 clean lab environment, you might achieve an 80% yield rate. But when scaled to industrial levels, the yield could plummet to below 50%. That kind of yield simply cannot sustain commercial production."Cost issues are equally significant. "For the foreseeable future, the cost of all-solid-state batteries cannot compete with existing liquid batteries," Fang assessed. "Even if large-scale industrialization is achieved by 2035, it will only serve as a supplement to the high-end market and cannot fully replace liquid batteries. I predict that by then, solid-state batteries will hold no more than a 20% share of the total battery market."For the current new energy vehicle industry, cost is undoubtedly the dimension OEMs care about most.Data released by the China Battery Industry Association in April shows that the current system cost of semi-solid-state batteries is approximately 0.82 to 0.88 yuan per Wh—only 8% to 12% higher than high-nickel ternary liquid batteries of the same energy density.Image Source: RenaultJin Yong, an academician at the Chinese Academy of Engineering, provided an estimate. All-solid-state batteries require a decade or more. The path moves from basic research to engineering transformation and finally to mass production. "Though a dark horse could suddenly emerge." During this long window, semi-solid batteries serve as a "compromise solution balancing increased energy density, price hikes, and safety." Moreover, they share about 70% to 80% compatibility with existing liquid lithium battery production lines, meaning retrofitting costs don't increase significantly.He ran the numbers: "If the cost of a semi-solid lithium battery pack is only 15% to 30% higher than a traditional liquid pack, that's an increase of less than 1 yuan per Wh. These batteries can be used in long-range electric vehicles, drones, humanoid robots, and more. Their scale and growth speed will be rapid, creating future production values in the tens or even hundreds of billions."In other words, as the most competitive technology route in the current power battery market, the status of semi-solid batteries is shifting from a "promising alternative" to an "unavoidable reality."Yet beneath the narrative of industrial prosperity, a deeper question is surfacing: Can this technological leap actually help Chinese new energy automakers escape the predicament of the price war?Profitability Under Pressure, Domestic Margins LowThe industry can no longer wait.On one hand, mass production of all-solid-state batteries faces too many hurdles. On the other, as 2026 begins, automakers confront a greater survival challenge: become profitable, or exit.Xu Changming, former deputy director of the State Information Center and a senior economist, believes industry competition will persist for some time, directly dragging down corporate performance. Profitability, he argues, will be particularly critical during the 15th Five-Year Plan period.He cited data: Looking at the profitability of listed domestic automakers (excluding those still in the red), Seres led with the highest gross margin last year at 26.9%. In terms of net profit margin, Chery led at 6.5%, followed by Geely at 4.8%, Great Wall Motor at 4.4%, BYD at 4.2%, Seres at 3.7%, Changan Automobile at 1.9%, Li Auto at 1%, and Leapmotor at 0.8%.Image Source: BYDThese figures are notably lower compared to international automakers, and the gap is significant. Moreover, these results were achieved while enjoying certain policy preferences and maintaining profits by squeezing upstream and downstream partners.This squeezing is reflected not only in lowering procurement prices but also in tying up capital.According to data from the National Bureau of Statistics, the profit margin of China's auto industry stood at 7.8% in 2017. Since then, it has slid steadily, falling to 3.2% in the first quarter of this year—placing it among the lowest across all sectors.Consider payment cycles to suppliers: mainstream foreign automakers generally settle within 40 to 50 days—Toyota, Volkswagen, Mercedes-Benz, and BMW all fall into this range, with Tesla slightly higher at around 60 days. In contrast, payment cycles for some listed domestic automakers stretch as high as 200 days, with even the lowest at 125 days (over four months). "And that is the payment cycle after invoicing; many companies also find ways to delay issuing invoices. Currently, the pressure on suppliers is immense," Xu stated.Among them, dealers bear the heaviest burden. Automakers extend payment cycles, dealers then pass the pressure down to battery companies, which in turn squeeze suppliers of cathodes, anodes, separators, and electrode materials. "But dealers have no one left to squeeze—below them are only the end customers," Xu noted. Consequently, the pressure on dealers has nowhere to go and is particularly crushing.Data shows that the average net profit margin of listed auto dealer groups was -3.5% last year. Even Zhongsheng Group, the nation's largest dealer, posted a negative net profit margin, with others in a similar plight. As for upstream listed companies, the situation is equally difficult.In contrast, the picture for major global automakers is markedly different.Tesla: Last year's revenue was $94.8 billion with a gross margin of 18%. Net profit margin is usually high in normal years but was about 4% last year (historical highs reached 15%). R&D spending accounted for over 6% of revenue, reaching $6.4 billion.Mercedes-Benz: Sales revenue exceeded 130 billion euros, with gross margins normally above 22%. Last year, impacted by price cuts in China, this fell to 16.9%. R&D investment was 9.68 billion euros (roughly 10 billion euros). Net profit margin in normal years sits between 8% and 10%, but dropped to around 4% last year.BMW: Gross margins typically hover between 17% and 18%, sitting just above 15% last year. Net profit margin was 6%, slightly better than Mercedes-Benz, while the normal level for luxury cars is 8% to 10%.Volkswagen: Gross margins in normal years are 18% to 19%, but fell to 15.9% last year. Net profit margin is normally 5% to 6%, but was only 2.1% last year, indicating significant pressure. Annual R&D investment is around 20 billion euros—the highest of any automaker.Toyota: Gross margins are stable at 18% to 20%. Its net profit margin is the most robust among global automakers, at about 8% to 10%. R&D investment is relatively lower.Xu believes that future profitability is the key to whether automakers can survive the 15th Five-Year Plan cycle. If companies remain in the red for too long, they will likely be eliminated before the end of the period. And global experience shows that continuous profitability requires innovation capabilities.He indicated that breakthroughs in technologies like semi-solid batteries, if successfully implemented and used to elevate brand value, could become the crucial breakthrough point for companies to achieve profitability and sustainable development.The logic behind this is clear and direct. The price war driven by homogeneous competition has reached its limit. Automakers urgently need new dimensions of differentiation to build brand premium. Semi-solid batteries happen to offer a perceptible difference from ordinary liquid batteries in the dimensions consumers care about most: safety, energy density, and winter range retention.Once this differentiation is established, it could leverage automakers' pricing power.Can Semi-Solid Be the "Savior" of Automaker Profits?The first-generation manganese-based semi-solid battery, developed by Qingtao Energy in partnership with SAIC, boasts a cycle life exceeding 3,000 cycles. It showed no abnormalities in nail penetration tests, and capacity decayed by less than 5% after 44,000 kilometers of durability testing. Discharge performance at -20 degrees Celsius doubled compared to traditional cells.Image Source: Future Vehicle Pioneer ConferenceYang Kun, head of system development at Qingtao Energy, stated that the company will deeply collaborate with the MG brand to launch more models this year. "For example, the MG4 URBAN, a model focused on overseas markets. Beyond the recently released SUV model MG 4X, we are truly bringing laboratory products to users of vehicles in the 100,000 yuan price range," Yang said.This confirms a key trend: Semi-solid batteries are not merely a technological toy for high-end models, but a technology suitable for the mass consumer segment at an acceptable cost.GGII predicts that domestic shipments of semi-solid batteries will exceed 15 GWh in 2026. Data from the China Association of Automobile Manufacturers (CAAM) shows that domestic installations reached 31.7 GWh in 2025, a 272% year-on-year increase. Installations are expected to reach 82 GWh in 2026, surpass 420 GWh by 2030, and capture 26% of the global power battery market. In the first quarter of 2026 alone, more than 16 solid-state battery and material projects were launched, started construction, or signed in China.These shipment figures confirm the value of the "semi-solid" concept itself.Of course, for any industrial technology still climbing the slope, there is always tension between enthusiasm and caution.Jin Yong noted that while semi-solid batteries address safety and range, they still have shortcomings in high-current output capability. High-end vehicles require instant bursts of high current for acceleration and overtaking—a challenge that all-solid-state batteries have yet to conquer and one that similarly constrains semi-solid technology.His solution is to introduce "power capacitors" as a supplement, but this implies that semi-solid performance is not flawless.Furthermore, as annual production runs into the tens of millions of vehicles, establishing a recycling system for semi-solid and all-solid-state batteries must be put on the agenda. China's heavy reliance on imports for key materials like nickel, cobalt, and lithium dictates that recycling is not an option, but a necessity.China's new energy industry in 2026 stands at a delicate historical juncture.On the technology front, the scaled mass production of semi-solid batteries and the vehicle verification of all-solid-state batteries are advancing in parallel. On the business front, automakers must break free from the vicious cycle of "burning cash for sales" and find new anchors of value.Is the value of semi-solid batteries merely a time-filler before all-solid-state arrives, or is it an independent and robust technological species?The answer for 2026 is being written. It may be both, but the only certainty is that the story for the battery industry is far from over.
