What’s Next for EV Batteries in 2026: Emerging Chemistries, Shifting Markets, and Industry Trends
As electric vehicles (EVs) continue their rapid ascent around the globe, the technologies powering them—specifically, the batteries—are evolving quickly. According to a recent analysis by MIT Technology Review, 2026 promises to bring significant developments in EV battery chemistry, manufacturing, and market dynamics, driven by factors such as cost pressures, geopolitical shifts, and growing global demand.
Rising Demand and Regional Variation
The appetite for EVs has surged notably in recent years. By 2025, EVs accounted for more than 25% of new car sales worldwide, a substantial increase from under 5% in 2020. Adoption rates vary by region: China led the charge with over half of new vehicle sales being battery electric or plug-in hybrids in 2025. In Europe, fully electric vehicles surpassed gas-powered cars in December alone. The United States, however, exhibited a modest decline in EV sales compared to 2024, highlighting regional disparities in EV uptake.
Innovations in Battery Chemistry: Sodium-Ion on the Rise
The majority of today’s EVs rely on lithium-ion batteries, prized for their energy density and performance. Yet lithium-ion batteries are becoming more costly due to rising raw material prices, prompting automakers and researchers to explore alternatives.
One promising contender is sodium-ion battery technology. Sodium is abundant and cheaper than lithium, potentially lowering battery costs. Sodium-ion cells typically have lower energy density, which means shorter driving ranges compared to lithium-ion batteries, but could be well-suited for small vehicles and electric scooters that do not demand high energy capacity.
Currently, sodium-ion cells cost about $59 per kilowatt-hour (kWh), slightly above the $52/kWh average of lithium iron phosphate (LFP) batteries—a popular, affordable subtype of lithium-ion batteries. The lithium-ion cost has plummeted dramatically over the past decade, from $568/kWh in 2013 to $74/kWh by 2025, raising the bar for competing chemistries.
However, recent upticks in lithium prices may create market openings for sodium-ion batteries. Production and adoption of sodium-ion batteries are presently concentrated in China, where companies such as Yadea, JMEV, HiNa Battery, and global leader CATL are advancing the technology. CATL plans to launch the first EV equipped with sodium-ion batteries by mid-2026. Conversely, the US sodium-ion battery industry faces challenges, highlighted by the exit of Natron in 2025 due to funding difficulties and reduced policy support.
Researchers are also working to improve sodium-ion energy density through innovations in electrolyte and electrode materials, aiming to better compete with lower-cost lithium batteries.
Solid-State Batteries: Approaching a Turning Point
Attention is also focused on solid-state batteries, which replace the liquid electrolyte common to lithium-ion cells with a solid material. This change can dramatically increase energy density and improve safety, promising longer driving ranges.
Though solid-state battery commercialization has been repeatedly delayed—Toyota initially targeted a 2020 launch—progress in manufacturing is rekindling optimism. Toyota now anticipates bringing solid-state powered vehicles to market in 2027 or 2028. US-based Factorial Energy demonstrated solid-state cells in a Mercedes test vehicle that achieved over 745 miles on a single charge, marking a notable milestone. The company hopes to commercialize this technology by 2027. Another key player, Quantumscape, is also engaged in automotive testing with plans for commercial production later this decade.
Before fully solid-state batteries arrive, many manufacturers are developing semi-solid or hybrid designs that incorporate gel electrolytes to reduce liquid content without eliminating it entirely. This intermediate technology is especially popular among Chinese battery firms as a stepping stone toward solid-state cells.
The Global Battery Landscape: China’s Dominance and Emerging Markets
China’s dominance in the EV and battery sectors continues unabated, with the country responsible for most global auto sales in 2025. More than one in three EVs made that year contained a CATL battery, underscoring the scale of Chinese influence.
CATL is expanding its global footprint with a major $8.2 billion factory opening in Hungary in 2026, which will supply European automakers like BMW and Mercedes-Benz. Meanwhile, Canada has lowered import taxes on Chinese EVs from 100% to about 6%, opening its market further to Chinese brands.
Meanwhile, several emerging markets are witnessing rapid EV growth. Thailand and Vietnam surpassed 100,000 annual EV sales in 2025—remarkable achievements for previously small markets. Brazil is projected to more than double new EV sales in 2026, buoyed by production from major manufacturers including Volkswagen and BYD.
In contrast, the US EV market faces uncertainty after the expiration of federal tax credits at the end of 2025. This rollback is expected to slow US EV sales growth during 2026. However, the US remains active in manufacturing lithium iron phosphate batteries, targeting stationary energy storage rather than EVs. Notable investments include LG’s large LFP battery plant in Michigan and SK On’s upcoming facility in Georgia.
Looking Ahead
As the world accelerates toward a cleaner transportation future, with projections estimating that 40% of new vehicle sales globally will be electric by 2030, the battery landscape is set for multiple changes. Consumers and manufacturers will benefit from a broader array of battery chemistries, a more diverse global supply chain, and advancements that could improve affordability, range, and sustainability.
While challenges persist, particularly in the US market, the continued evolution of EV battery technology and shifting geopolitical dynamics promise an exciting and transformative period for the industry in 2026 and beyond.
— Casey Crownhart, MIT Technology Review
