TOKYO -- Taiwan's ProLogium and other makers of all-solid-state batteries -- long seen as a potential next-generation electric vehicle power source -- are shifting their gaze to non-automotive sectors like artificial intelligence, spurred by sluggish EV demand growth and high costs.

Solid-state batteries replace the liquid electrolyte used in conventional lithium-ion batteries with a solid material through which ions move, making them more fire resistant than today's lithium-ion batteries. They also offer higher potential energy density, allowing batteries of the same size to deliver greater capacity and output.

Mass production of small solid-state batteries for electronic components and industrial robots began around 2020, but the technology's main target has always been automotive applications, particularly EVs.

Though global automakers and battery manufacturers have been racing to commercialize the technology, the situation may be changing.

Competition in the EV battery market is increasingly intense, said Vincent Yang, CEO of Taiwan-based solid-state battery manufacturer ProLogium Technology. He added that by 2032, 50% of the company's sales are expected to come from non-automotive applications.

A ProLogium plant in Taiwan. The company also plans to build a factory in France. (ProLogium) ProLogium's backers include Mercedes-Benz Group and Japan's Kyushu Electric Power. It began mass production of automotive batteries in Taiwan in 2024 and plans to go public in the U.S. as early as this year.

The company intends to invest 5.2 billion euros ($5.82 billion) in a new factory in France, boosting global production capacity to as much as 14 gigawatt-hours annually by 2032.

The bulk of that capacity had been expected to focus on automotive batteries. But Yang said automotive applications would account for only 60%, with the remaining 40% allocated to other uses.

The first target is data centers, where the rise of generative AI has created demand for solid-state batteries as emergency power sources. Because they offer high output and are less prone to fires, the company thinks the batteries can be installed near servers and aims to begin sales around 2028.

ProLogium also is expanding into aerospace. In June, it launched research with Elysian Aircraft, a Dutch startup that develops electric aircraft, on batteries for planes capable of flying roughly 1,000 kilometers. And in the unmanned aircraft field, the company expects to begin deploying its batteries around 2027 through other partnerships. Non-automotive applications generally command higher prices, Yang said.

The diversification push stems from the EV market growing more slowly than originally anticipated. EV sales in the U.S. have fallen since President Donald Trump's administration ended purchase subsidy programs at the end of September 2025.

The falling cost of conventional lithium-ion batteries adds more pressure. Chinese manufacturers, which hold about 70% of the global market, have expanded production while battery performance has steadily improved, tightening the competition for solid-state alternatives.

The average price of lithium-ion batteries in 2025 was down 40% on a per-kilowatt-hour basis from five years before, the International Energy Agency reports. In automotive applications, manufacturers have increasingly adopted lower-cost batteries that use fewer rare metals.

Solid-state batteries require massive investment in production facilities, while key materials such as solid electrolytes remain expensive. Manufacturing costs are estimated to be several times higher than those of lithium-ion batteries, a gap that may prove difficult to narrow. Manufacturers are cultivating new markets where customers are more willing to pay premium prices.

Other solid-state battery makers are looking beyond the automotive sector. U.S.-based QuantumScape, which has partnered with Volkswagen and Honda Motor, announced its entry into non-automotive markets earlier this year. It established units for data centers and for aviation and defense applications this summer. Nissan is one of several Japanese automakers developing solid-state battery technology.

Japanese companies have long held a technological edge in solid-state batteries, which can be broadly divided by electrolyte into sulfide-based and oxide-based systems.

Lower-cost oxide-based batteries already are supplied by companies like Japan's TDK for electronic components and other applications. Sulfide-based batteries, which offer advantages in capacity and charging performance, are the focus of Japanese automakers' commercialization efforts.

Toyota Motor is working with energy company Idemitsu Kosan, Sumitomo Metal Mining and others to commercialize EVs equipped with solid-state batteries by 2027 or 2028. Nissan Motor is also developing manufacturing technologies aimed at mass production in fiscal 2028. But high costs are likely to limit initial deployment to a small number of ultra-premium vehicle models.

Global solid-state battery production capacity is expected to reach 24 GWh by 2030, six times the 2024 level, market research firm Fuji Keizai Group reports. But that would still amount to only a few percent of total lithium-ion battery demand. "Even if solid-state batteries achieve commercial deployment, widespread adoption with a market share exceeding 10% will require lower electrolyte costs and other improvements," said Noboru Sato, a visiting professor at Nagoya University. "The earliest that is likely to happen is after 2035."