What’s New in Battery Technologies

Several major suppliers announced significant 2025 advances. Stellantis and Factorial Energy achieved a breakthrough solid-state battery cell, validating automotive-scale lithium-metal solid-state cells with 375 Watt-hours per kilogram energy density and rapid charging (15–90% in 18 minutes). Mercedes-Benz, in partnership with Factorial Energy, also road-tested an EV (EQS platform) with a prototype solid-state lithium-metal battery, yielding up to 25% greater range (~620 miles on 118 kilo-watt-hours) at comparable weight. General Motors and LG Energy Solution (Ultium Cells JV) pioneered a new “lithium manganese-rich” (LMR) NMC chemistry, demonstrating prismatic battery cells with ~33% higher energy density versus LFP at similar cost, targeting electric trucks with 400+ miles of range. QuantumScape, a U.S. solid-state developer, integrated its advanced “Cobra” ceramic separator process into baseline production in mid-2025, a step-change for scaling solid-state battery manufacturing. Dragonfly Energy (USA) earned industry recognition for its “dry electrode” manufacturing process and smart battery management system, signaling progress toward more sustainable, high-performance lithium-ion cells. These developments – high-density LMR cells, practical solid-state prototypes, and improved manufacturing methods – mark notable 2025 progress by battery suppliers.

Introduction

Electric powertrains have seen rapid adoption in commercial fleets, driven by declining battery costs, regulatory pressures, and rising attention to lifecycle costs and emissions. Globally, sales of battery-electric light commercial vehicles (LCVs) jumped over 40% in 2024, to roughly 600,000 units, as China and Europe led the market. The United States, though a smaller share, is the third-largest LCV market (over 25,000 sales in 2024, +55% year-on-year). Growth has been spurred by policies and incentives: federal and state subsidies under the Inflation Reduction Act make EVs cost-competitive, and total cost-of-ownership (TCO) analyses show EVs costing about 9% less over their life than diesel equivalents for typical fleet scenarios. Economically, fleets benefit from lower fuel and maintenance expenses (electricity costs far below diesel and fewer wear items), and operational efficiencies like regenerative braking. Environmentally, battery trucks dramatically cut greenhouse gases; for example, a battery-electric Class 8 tractor can emit roughly 63% less GHG than a diesel counterpart on a life-cycle basis. Safety and maintenance trends also favor batteries: EVs have fewer moving parts and reduced brake wear due to regen braking, and designs yield lower centers of gravity, improving vehicle stability.

However, under the incoming 2025 Trump Administration, U.S. policies are shifting. President Trump’s early orders and legislative proposals aim to roll back EV incentives: a January 2025 executive order targeted the elimination of federal EV tax credits and related subsidies. Congressional proposals would end the $7,500 EV tax credit and related home-charger credit after 2025 for most vehicles. The administration is also moving to ease fuel-economy (CAFE) standards and re-evaluate light-, medium-, and heavy-duty greenhouse gas regulations. California’s waiver under the Clean Air Act is being revoked, threatening state emissions standards, and even California’s own heavy-truck mandates (Advanced Clean Fleets) are being repealed. Industry analysts (BNEF) now project the U.S. lagging global EV adoption, with millions fewer EVs expected by 2030 under the rollback scenario. These policy shifts – cutting demand incentives and relaxing mandates – contrast with prior federal support, and will significantly influence fleet decision-making.

Against this backdrop of fast-rising battery capability but uncertain policy, fleet operators face the question: do 2025 battery improvements justify investment? This report reviews new technologies, typical applications, regulatory context, and quantifies the benefits and limits to inform fleet planning in 2025 and beyond.

Technology Overview and How it Works

Lithium Iron Phosphate (LFP)

How it Works: LFP batteries use lithium iron phosphate as the cathode material. They have excellent cycle life (often >2,000 cycles) and intrinsic thermal stability, making them very safe and durable. Unlike high-nickel chemistries, LFP contains no cobalt, so it avoids cobalt scarcity and cost issues. However, its energy density is lower: roughly 20% less gravimetric energy than NMC by weight, which means larger battery packs for a given range. LFP cells tolerate deep discharge without degradation (100% depth-of-charge practical), simplifying charging and management.

Applications: LFP is widely used in applications where safety, lifespan, and cost are priorities over maximum range. It is common in electric buses, utility vehicles, forklifts, and increasingly in passenger EVs for short-range models. For example, many Chinese-made electric trucks and buses use LFP cells to minimize cost. LFP is less suited for applications needing very long range or high power density, such as long-haul trucking or cold-weather EVs, due to its lower specific energy and poorer low-temperature performance. Typical usage includes urban delivery trucks and school buses, where operational ranges are moderate.

Recent Developments: In 2025, LFP technology continued steady improvement. Global OEMs are scaling LFP production: Ford announced its BlueOval Battery Park (Michigan) will manufacture LFP cells for affordable EVs, and manufacturers like BYD (Blade battery) expanded LFP output. The IEA notes LFP cost is about 30% lower per kilo-watt-hours than NMC. While no single breakthrough stands out this year, ongoing improvements include higher nickel content in some LFP blends and larger-format prismatic LFP cells to better fit fleet vehicles. Dragonfly Energy (USA) won a “Battery Tech Company of the Year” award for its innovative dry-electrode LFP cell production process, which reduces environmental impact and cost. Overall, LFP’s maturation makes it a reliable, low-cost choice for many fleet uses.

Nickel Manganese Cobalt (NMC)

How it Works: NMC batteries use layered oxide cathodes combining nickel (Ni), manganese (Mn), and cobalt (Co). By varying the Ni:Mn:Co ratio (e.g. 811, 523 compositions), manufacturers balance energy density, power, cost, and stability. High-Ni NMC (e.g. 811 or newer “lithium manganese-rich” formulas) provide higher specific energy than LFP, at a moderate cost. NMC cells achieve strong gravimetric and volumetric energy densities, enabling longer range. Drawbacks include reliance on cobalt (supply/ethics concerns) and a slight thermal safety disadvantage vs LFP.

Applications: NMC is the dominant chemistry for passenger EVs and many medium-duty applications (vans, delivery trucks) that need a balance of range and cost. It powers most U.S. electric pickup trucks and medium-haul delivery vehicles. NMC is favored when range >250 miles is needed. It is less ideal for extreme cold climates (cobalt helps low-temp performance), and the presence of cobalt and nickel raises cost and resource concerns. For fleets, NMC suits regional delivery or service trucks; heavy long-haul trucks may seek alternatives.

Recent Developments: In 2025, GM and LG Energy Solution unveiled a new prismatic “lithium manganese-rich” (LMR) NMC formulation for future trucks. This LMR chemistry uses a high proportion of inexpensive manganese, achieving ~33% higher energy density than LFP at similar cost. It will enable GM’s electric trucks to target 400+ miles range while lowering pack costs. Other suppliers (Samsung SDI, SK On) are refining NMC blends to reduce cobalt content. For example, industry reports note Samsung considering NMC 914 or 934 blends (90% Ni) to maximize density. Ford’s EVs (Lightning pickups) and Stellantis’ Ram EV use high-Ni NMC cells. In summary, 2025 innovations in NMC focused on tailoring Ni/Mn/Co ratios (like GM’s LMR) to drive cost down and energy up for truck applications.

Nickel Cobalt Aluminum (NCA)

How it Works: NCA is a lithium-ion chemistry with cathodes of nickel, cobalt, and aluminum (e.g. ~85-90% Ni, 5% Co, 5-10% Al). It delivers very high specific energy and power density (higher than most NMC types) and good cycle life. The aluminum improves stability of the cathode. NCA’s downsides are cost (cobalt content) and that it is less energy dense than emerging solid-state alternatives. It is used primarily in high-performance EVs (notably Tesla uses NCA in many models) where maximum range per weight is critical.

Applications: NCA is used in flagship EVs and high-range vehicles (e.g. Tesla Model S/X/3 Performance, and soon the Tesla Semi). In commercial fleets, it could appear in premium electric trucks or vans where range is top priority and cost is less of a constraint. NCA is generally overkill for short-range applications due to its higher cost. It is not well suited for purely cost-sensitive or low-risk use-cases.

Recent Developments: No major new NCA products were announced in 2025. Development has focused on incremental improvements, such as higher-nickel NCA variants and slight cobalt reduction. Panasonic continues to supply NCA for Tesla, and the industry is exploring cobalt-free or cobalt-minimized NCA-like chemistries. Looking ahead, companies plan to integrate NCA in next-generation cells; Tesla’s 4680 cylindrical cells (still NCA) are ramping in production. Solid-state transitions may eventually supersede NCA. But for now, NCA improvements in 2025 were relatively modest and centered on efficiency gains rather than new releases.

Solid-State Batteries (SSB)

How it Works: Solid-state batteries replace the liquid electrolyte with a solid one (such as ceramic or sulfide materials). This allows the use of a lithium-metal anode, boosting energy density significantly. Solid electrolytes are non-flammable, improving safety. In theory, solid-state cells can reach ~450 Watt-hours per kilogram energy density, enabling much longer range. They also promise fast charging and high power. Challenges include brittle materials, interfacial contact, and manufacturing scale-up.

Applications: Solid-state is largely at the demonstration stage. Currently, SSBs suit high-end automotive prototypes and research labs. Early applications include performance EVs (e.g. Mercedes in 2025 is test-driving a solid-state-equipped EQS) and potential military/space uses. They are not yet commercially available, so no mainstream fleet vehicles use them. Over the next decade, SSBs could serve long-range long-haul trucks or buses, but until mass production matures, fleets cannot rely on them.

Recent Developments: 2025 saw significant solid-state milestones. As noted, Factorial Energy (Boston) partnered with Stellantis and Mercedes to demonstrate prototype solid-state packs. Stellantis/Factorial validated 375 Watt-hours per kilogram cells in April 2025. Mercedes-Benz ran road tests with a Factorial solid-state cell in early 2025, achieving 25% more range than its conventional battery. QuantumScape (USA) integrated a new high-throughput separator process (“Cobra”) into pilot production, improving manufacturing speed 25x. CATL (China) and Toyota (Japan) also reaffirm timeline estimates (mass production ~2027–2030), though no production launches occurred in 2025. In summary, solid-state R&D is moving rapidly: prototype cells and pilot lines are operational, but widespread use remains a few years off.

Typical Applications and Limitations

• Lithium Iron Phosphate (LFP): Strengths include excellent safety, long cycle life, and low cost. Fleets often use LFP in urban delivery trucks, forklifts, and buses where reliability and TCO are paramount. LFP’s stability makes it suitable for heavy daily cycling and public transit. Weaknesses are its lower energy density (about 20% lower than NMC) and poorer cold-weather performance, making it less suitable for long-range routes or freezing climates. It also charges slightly slower than some chemistries, but regenerative braking helps energy recuperation. In summary, LFP excels in short- to mid-range duty cycles but is not ideal when maximizing range per charge.
• Nickel Manganese Cobalt (NMC): Offers high energy density and versatility. It can serve both medium-duty and (to some extent) heavier applications. Fleets use NMC in long-range vans and some regional trucks where they need more miles between charges. NMC’s higher energy allows higher payloads or longer trips than LFP. On the downside, NMC cells cost more and contain cobalt, which adds supply chain risk. They also degrade faster if cycled deeply every day. In very cold conditions, NMC still performs better than LFP, but heavy trucks needing >500-mile range may find even NMC limiting.
• Nickel Cobalt Aluminum (NCA): Delivers the highest specific energy of current Li-ion chemistries. It is used in flagship EVs and offers very long range (important for fleet routes with few stops). However, its advantages come at high material cost (cobalt) and complex thermal management. NCA is not broadly used in commercial fleets today, reserved for high-end models. Its downside is that better alternatives (like solid-state) are in development. Currently, NCA is well suited where maximum range and performance justify the cost, and less suited for budget-conscious or utilitarian fleet segments.
• Solid-State Batteries: Provide the promise of very high energy density and excellent safety. In prototypes, they enabled 25% greater range with similar weight. In the future, SSBs could revolutionize heavy-duty trucking with ranges >600 miles. However, as of 2025 they are experimental: none are mass-produced, and they remain costly. Short-term, they are unsuitable for fleets because they are unavailable and unproven in full-scale service. Their limitations today are technology and scale, not performance. Fleets may pilot them in the future, but current electric trucks rely on advanced Li-ion chemistries.

Government Regulations and Incentives

U.S. federal and state policies have strongly influenced fleet battery adoption, but the 2025 Trump Administration has begun reversing many initiatives. Key changes include:

• Electric Vehicle Credits: The Inflation Reduction Act’s generous tax credits for new and used EVs (up to $7,500 and $4,000 respectively) and for EV chargers are slated to be phased out. The House GOP tax-reform proposal in mid-2025 explicitly eliminates the $7,500 EV credit for most vehicles placed in service after 2025. It also ends the credit for used EVs and for charging stations after 2025. Federal incentives for commercial EVs (section 45W) and special leasing rules would also be repealed. Although these proposals have not yet become law, they signal that purchase-price subsidies will disappear for most fleets after 2025, raising the effective upfront cost of battery trucks.
• Regulatory Rollbacks: On Day One of the administration, President Trump ordered removal of “subsidies and other measures” for EVs. The EPA was directed to reconsider or roll back key climate regulations, including light-, medium-, and heavy-duty vehicle greenhouse gas emission standards that underpin EV adoption. This will allow CAFE standards to relax and postpone or weaken requirements for electric truck sales. In June 2025, EPA announced a large deregulatory package, including reopening the 2009 Endangerment Finding and revoking Biden-era emission standards. If fuel-economy and GHG targets are eased, it reduces pressure on fleets to electrify from a regulatory compliance perspective.
• State and Local Actions: The administration is also rescinding states’ authority to set tougher standards. Congress used a Congressional Review Act to nullify California’s tailpipe rules for cars and possibly trucks. California air regulators, under legal and political pressure, agreed to repeal much of their Advanced Clean Fleets (ACF) rule (which mandated fleets to transition to ZEVs). This means California will no longer require high-priority fleets or drayage fleets to adopt electric trucks on the previous timeline. Additionally, the EPA has signaled it will revoke California’s Clean Air Act waiver, ending state EV mandates. These moves ease fleet electrification requirements at the state level.
• Infrastructure and R&D Funding: Trump’s “Unleashing American Energy” executive order explicitly aimed to halt federal funding for EV charging stations and battery manufacturing plants. Under this policy, any remaining IRA or bipartisan infrastructure grants could be reallocated or halted. While some funds are obligated, new federal grants for charging infrastructure will dry up, slowing build-out of depot and roadside chargers. Workforce programs and R&D initiatives for battery innovation may also see budget cuts.

Overall, by mid-2025 the U.S. policy landscape has shifted from strong support of EV incentives to skepticism. Federal purchase incentives and mandates are being dismantled, and regulatory standards are being loosened. This uncertainty complicates fleet electrification planning: without credits, the upfront cost premium of EV trucks rises, and without strict emissions mandates, some operators may delay EV purchases. Any remaining support will come from previously enacted state or local programs (which many states are also trimming) or international competition (e.g. tariffs to protect U.S. manufacturers). Fleets must now rely more on clear operational benefits (fuel savings, maintenance, and corporate sustainability goals) than on federal incentives.

Features & Benefits (Advantages & Limitations)

• Cost Savings: Fleet electrification yields measurable savings over time. Independent analysis by Rocky Mountain Institute finds that, across typical use cases, battery EVs have about 9% lower total cost of ownership than comparable ICE vehicles when federal incentives are counted. Electric trucks incur far lower fuel costs: battery drivetrains are ~55% more energy-efficient than diesel in heavy trucks, resulting in nearly 70% lower fuel costs per mile in markets like China. Maintenance expenses drop as well, since EVs eliminate oil changes and have far less wear on brakes and engines. Even without incentives, high-mileage fleets often reach operating-cost parity or benefit within the first few years of service.
• Operational Efficiency: Electric powertrains deliver instant torque, smooth acceleration, and high driveline efficiency. Heavy battery trucks can recover kinetic energy via regenerative braking, improving energy use in stop-and-go service. The lack of complex transmissions means fewer mechanical losses. Data show electric heavy trucks use only about 45% of the energy per ton-mile compared to diesel trucks, so fleets pay roughly one-third of the fuel bill. Fleets also report reduced downtime: EVs have fewer failure points. However, charging time is a limitation compared to quick fueling; high-power DC fast charging infrastructure is required for fast turnaround, and this infrastructure rollout remains a challenge (especially under reduced federal funding).
• Environmental Impact (GHG Reductions): Electrification can drastically cut greenhouse emissions. A European life-cycle study found battery-electric Class 8 trucks produce at least 63% lower GHG emissions over their lifetime than diesel trucks, even on today’s grid mix. If charged on renewable electricity, emissions drop further (84% lower on 100% renewables). Electric fleets also eliminate 100% of tailpipe CO₂ emissions and reduce NOₓ by ~90% and particulate emissions by ~50% per mile. These reductions translate into cleaner air and lower climate impact. The actual savings depend on the local grid: in regions with coal-heavy grids, the benefit narrows but still remains positive. Many fleet operators pursue EVs specifically to meet corporate sustainability goals and avoid future carbon regulations.
• Safety & Maintenance: EVs offer safety and reliability advantages. With far fewer moving parts (no engine, fewer fluids) they have inherently higher mechanical reliability. Regenerative braking greatly extends brake life, cutting brake maintenance costs. Electric buses and trucks tend to have a lower center of gravity (because heavy batteries are mounted low), reducing rollover risk. Manufacturers must meet the same crash and fire standards as ICE vehicles, and batteries are extensively tested for abuse conditions. While EVs require special training for high-voltage maintenance, routine safety systems (collision avoidance, stability control) are equivalent. Over the vehicle lifespan, fleets report fewer roadside failures with EVs. The main safety limitation is in emergency procedures (firefighting techniques differ), but these concerns are manageable with training.

In summary, commercial EVs offer quantifiable financial and environmental benefits with maintenance savings. Limitations include higher initial purchase price (in part due to battery cost), and potential downtime if chargers are scarce. Battery performance in extreme cold or under very heavy duty can also be a concern. However, as the data show, in many typical fleet use cases the advantages – notably fuel and emissions reductions – outweigh the drawbacks.

Conclusion & Future Outlook

Commercial fleet electrification is accelerating, but adoption will vary by chemistry and policy. Market forecasts indicate rapid growth: global EV battery demand is expected to more than triple by 2030, with electric trucks growing from ~3% to over 8% of the EV battery market share. Lithium-ion chemistries will remain dominant in 2025, but LFP is gaining ground due to its low cost: IEA reports LFP packs are about 30% cheaper per kilo-watt-hours than NMC. As a result, LFP is increasingly chosen for budget-friendly trucks and buses, especially in China and for short-range U.S. applications. NMC and NCA will continue leading in higher-range vehicles. Solid-state batteries, currently in development, could start entering limited production around 2027–2030 if development continues on schedule. In the near term, improvements will likely come from incremental gains in existing Li-ion cells, as seen with GM’s LMR prismatic batteries and advanced electrode designs.

Leading suppliers are shaping this outlook. Factorial Energy (with Stellantis and Mercedes) and QuantumScape are driving solid-state progress, GM and Ultium Cells (LGES) are pushing manganese-rich NMC for trucks, and CatL/BYD continue optimizing LFP. Battery pack integrators like GM, Ford, and Tesla are adapting these cells into fleet-ready vehicles. U.S. manufacturers, aided by IRA funding (for battery plants, until policy change), aim to localize battery supply chains. However, the 2025 policy shift will temper some ambitions. Analysts have already downgraded U.S. EV sales projections given the rollback of incentives and standards. If federal credits expire and California mandates dissolve, fleet operators will rely heavily on total-cost-of-ownership calculations and voluntary sustainability goals rather than regulation.

Growth trends by battery type suggest LFP will surge in short-range fleets, NMC/NCA will dominate long-haul and high-performance applications, and solid-state will remain a future game-changer beyond this decade. Governments are key to these trajectories: supportive policies accelerate adoption, while rollbacks slow it. In the current context, fleet operators should weigh the strong economic and environmental advantages of electrification (fuel savings of ~70%, GHG cuts of >60%) against the uncertain policy environment. Those planning purchases in 2025 should consider known battery platforms (LFP, NMC/NCA) and use available incentives now, while keeping an eye on emerging solid-state developments.

In conclusion, 2025 battery advancements – higher-energy cells and novel chemistries – significantly improve the value proposition of EV fleets. Within the next 5–10 years, these technologies promise further cost declines and range gains. Even as some government support wanes, the technical momentum (cost parity, efficiency, emission savings) suggests that electrified fleets will continue growing. Fleet operators should monitor both technology roadmaps and evolving policies: investing in batteries now can yield operational benefits and emissions reductions, but success will depend on strategic timing, robust charging infrastructure, and adapting to the changing regulatory landscape.