New National Standards Revolutionize Battery Safety and Competitive Landscape in Energy Storage Industry

On April 15, 2025, the Ministry of Industry and Information Technology released the new mandatory national standard titled “Safety Requirements for Power Batteries for Electric Vehicles” (GB38031-2025), which is considered the most stringent battery safety regulation in history. This standard will officially take effect on July 1, 2026. For the first time, the new standard explicitly states that batteries must not catch fire or explode after thermal runaway caused by internal short circuits. This rigorous requirement will not only mark a significant milestone in the battery industry but also profoundly impact leading companies that operate as both power battery and energy storage battery providers, reshaping the electric vehicle industry landscape while simultaneously promoting safety upgrades and technological innovation in the energy storage sector.

Unlike traditional tests that focus on extreme conditions such as puncturing and crushing, the new standard innovatively introduces a strict criterion: batteries must not ignite or explode after thermal runaway due to internal short circuits. It mandates the establishment of a triple protection system for battery systems: first, utilizing high-precision sensors to monitor parameters like temperature and voltage in real-time to issue early warnings during the initial phase of thermal runaway; second, employing new heat-insulating materials or optimizing structural designs to block heat transfer; and third, equipping ultimate fire suppression devices to prevent explosions. In the face of these technical challenges, battery systems must innovate across multiple dimensions, including materials, structures, and electronic controls.

CATL has developed a “non-thermal-diffusion battery technology”, which successfully passed the new standard tests through innovations such as nano-scale heat insulation materials and directional explosion-proof valve assemblies, setting a new benchmark for the industry. However, the implementation of the new standard also brings cost challenges, with compliant battery system costs projected to increase by 15%-20%. Secondary companies may face renovation costs exceeding 500 million RMB. The primary sources of cost increase include: in materials, new heat-insulating materials and flame-retardant electrolytes are 30%-50% more expensive than traditional materials; structural improvements require redesigning thermal management channels and adding protective layers, increasing process complexity; and enhancements to the electronic control system for thermal runaway warning and suppression devices result in about a 20% rise in Battery Management System (BMS) costs. For example, the cost of a lithium iron phosphate energy storage system will rise from 1 RMB/Wh to 1.15-1.2 RMB/Wh post-renovation.

Moreover, the production ramp-up period due to technological upgrades may further compress profit margins for businesses, intensifying operational pressures. Although the new standard primarily targets power batteries for electric vehicles, its safety concepts and technical requirements are rapidly being transmitted to the energy storage sector. Given that the technical principles and application scenarios of energy storage batteries are highly similar to those of power batteries, and leading companies like CATL and BYD operate in both domains, the new standard’s technical requirements naturally serve as a crucial reference for upgrading energy storage batteries.

In scenarios such as grid peak shaving and industrial energy storage, battery systems need to operate at high loads for extended periods, which elevates the risk of thermal runaway. The “no ignition, no explosion” technology promoted by the new standard aligns perfectly with the energy storage sector’s demand for inherent safety. Leading companies are benefiting from their prior technology investments, taking the lead in the new standard tests. Innovations like BYD’s “blade battery” and Guoxuan High-Tech’s “JTM technology” demonstrate excellent thermal runaway protection, while smaller battery manufacturers face elimination risks due to lagging technological upgrades. This trend is mirrored in the energy storage field, where leading companies like Sungrow and Kehua Tech have integrated the new standard’s safety requirements into their product development, while some smaller energy storage firms may lose market share due to insufficient technical reserves.

In response to the new standard upgrade and cost pressures, the industry is pursuing breakthroughs in four major areas. In material innovation, Tsinghua University has developed a flame-retardant composite separator that lowers costs by 40% while maintaining excellent performance; in structural simplification, CATL’s CTP technology eliminates module structures to improve volume utilization by 20%; in intelligent manufacturing, BYD’s AI visual inspection system has increased defect identification rates to 99.6%; and in recycling, Sungrow’s retired battery energy storage system achieves an 85% utilization rate while reducing costs by 30%.

The safety upgrades driven by the new standard are also changing the pricing logic in the battery market. Battery systems with high safety performance are beginning to gain market favor. For instance, in energy storage project tenders, companies using compliant solutions under the new standard can bid 5%-8% higher than those employing traditional solutions. Some leading firms have also introduced “safety service packages”, offering users value-added services that include thermal runaway warnings and automatic fire suppression. Sungrow’s “Energy Storage Safety Manager” service enhances system fault response speed by 50% through remote monitoring and intelligent diagnostics, generating annual revenue equivalent to 10%-15% of the system costs.

The implementation of the new standard is not an isolated initiative but aligns with policies such as the “14th Five-Year Plan for the Implementation of New Energy Storage” and the “Development Plan for the New Energy Vehicle Industry”. Under the guidance of these policies, the new standard raises safety thresholds and accelerates the elimination of outdated production capacities. Simultaneously, policies encourage companies to innovate safety technologies through subsidies and tax incentives, creating a virtuous cycle of policy guidance, technological innovation, and market application.

With the rollout of the new standard, battery safety has shifted from being an “additional advantage” to a core competitive element. Industry experts predict that the future of the energy storage sector will exhibit three major trends: in technological integration, the boundaries between power batteries and energy storage batteries will blur, with leading companies driving collaborative development through technology sharing; in standard unification, safety standards for batteries in the new energy vehicle and energy storage sectors will converge, promoting industry standardization; and in model innovation, high-safety battery systems will give rise to new value-added service models such as “energy storage + insurance.” This safety revolution is reshaping the value chain of the battery industry, compelling energy storage companies to deeply integrate safety features into their technologies, products, and services to remain competitive. As safety becomes a shared industry consensus, a healthier and more sustainable energy storage ecosystem is rapidly taking shape.