Material Insights · Understanding the Material World

Next-generation lithium batteries: Impact and additionality

Long-dated bets that matter more for transport than grids

What this tab covers The impact and additionality lens: what it displaces on the grid, who gains and who bears the burden along the supply chain, and what happens at end of life.

For a grid-focused impact fund these are long-dated bets with little near-term effect on emissions; their main value is making electric transport lighter and safer later this decade.

Grid decarbonisation versus fossil displacement

Unfavourable

Near-term grid impact is negligible. If solid-state cells succeed in cars, they could make longer-range EVs cheaper to build and so cut oil use, but grid storage is expected to remain with LFP and sodium-ion. The IEA expects solid-state to stay in premium segments until the first half of the 2030s.1

Just transition and local community impact

Mixed

Development is concentrated in Japan, South Korea, China and the US (Toyota, Samsung, BYD, QuantumScape, Factorial). Lithium-sulphur, by removing cobalt and nickel, could cut the most problematic mining exposure, but it still depends on lithium supply chains.1

Circular economy and end of life

Mixed

No recycling routes exist at scale for these designs. EU battery rules apply to all chemistries, including lithium recovery of 50% by end-2027 and 80% by end-2031 and recycled-content minimums from 2031, so recyclability should be designed in from the start.5

EU lithium recovery target 50% by end-2027, 80% by end-20315

Sources

  1. Global EV Outlook 2026: Electric vehicle batteries International Energy Agency, 2026
  2. EU Sustainable Batteries Regulation (2023/1542), policy summary International Energy Agency policy database, 2023