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Solid-state battery tech gaining momentum with automaker investments

From top left to bottom right, various stages of how copper foam substrate becomes a a solid-state full-cell 3-D battery at Prieto Battery May 16, 2017 in Ft. Collins, Colorado.
Various stages of copper foam substrate becoming a a solid-state battery, at Prieto Battery, on May 16, 2017, in Ft. Collins, Colorado. Photo: Andy Cross/The Denver Post via Getty Images

Volkswagen is considering building a factory in Europe to produce solid-state batteries, a next-generation battery technology, to power its electric vehicles, according to a report from earlier this month. The news comes on the heels of Volkswagen's June investment of $100 million in QuantumScape, a solid-state battery startup.

The big picture: Solid-electrolyte batteries gained prominence in the lab a decade ago, but are just now achieving the cell performance to make the automotive industry take notice, with Volkswagen specifically citing performance demonstration "at automotive rates of power." As the technology develops, there has been a flurry of international development interest: Toyota, Nissan, Dyson and BMW have all made similar investments.

The big picture: Automakers invest in China due to Trump's trade war

Tesla car charging
A Tesla car charging in Beijing. Photo: Zhang Peng/LightRocket via Getty Images

American-made cars are among the hardest-hit products in the U.S.-China trade war, facing a 40% import tariff in China — and some automakers are weathering the storm by doubling down on Chinese operations.

Why it matters: Moving into China is a natural step for big automakers looking to crack the world’s fastest-growing car market, but tariffs provide a big incentive to accelerate those plans. Their investments in factories and in research and development on Chinese soil could give China a long-term advantage when it comes to building the electric and autonomous vehicles of the future.