Transformation and Competition in the Global Cylindrical Battery Market

The global cylindrical battery market is undergoing a structural transformation, primarily driven by advancements in technology and improvements in manufacturing efficiency. As cylindrical battery manufacturers expand their focus from electric vehicles to diverse applications such as aviation and humanoid robots, a competitive battle for end-user applications has begun, signaling an impending industry reshuffle.

Large cylindrical batteries are making headway in high-end models, showcasing their manufacturing efficiency and standardization advantages. This year, BMW officially announced the adoption of large cylindrical batteries in its next-generation electric vehicles, marking a significant milestone for this technology. This move confirms the commercial viability of large cylindrical batteries in the mid-to-high-end passenger car market. The industrial foundation for this progress lies in the mature application of full-tab technology. Significant advancements in processes like laser welding have enhanced control, precision, and yield in the manufacturing process, allowing for the large-scale application of full-tab technology. This advancement is outpacing the dual-dry-method electrode technology, which is often regarded as having greater cost potential but is more complex to implement. Full-tab technology provides large cylindrical batteries with exceptional fast-charging capabilities, meeting market demands for ultra-fast charging at rates of 4C and above since 2024. Coupled with the inherent advantages of cylindrical shapes in energy density and structural safety, large cylindrical batteries are demonstrating comprehensive performance akin to that of a “hexagonal warrior.”

BMW and its battery partners, including CATL, EVE Energy, and Envision AESC, have developed and tested high-nickel positive electrode materials and silicon-carbon negative electrodes from the outset. This high-level technological choice ensures ample room for improvement in energy density, preparing these batteries to meet the stringent requirements of emerging applications like electric vertical takeoff and landing (eVTOL) vehicles while also creating a buffer against potential impacts from next-generation battery technologies such as solid-state batteries. BMW’s approach differs from Tesla’s promotion of dual-dry-method electrode technology, which is viewed as another key technology for reducing the cost of large cylindrical batteries. This divergence illustrates that solutions based on wet-method electrodes and full-tabs (non-rolled) can also successfully penetrate the market, with both companies providing pathways for large cylindrical battery integration across different price ranges for electric vehicles.

The manufacturing efficiency advantage of cylindrical batteries is increasingly evident. Industry consensus suggests that production efficiency on cylindrical battery assembly lines is at least 50% higher than that of pouch or prismatic batteries, and it continues to improve as production scales increase. For instance, equipment provider Yifei Laser has boosted the speed of its cylindrical full-tab battery assembly lines from 150 PPM in 2022 to between 300 and 360 PPM by 2023. Leading equipment manufacturers in the industry now generally possess the capability to achieve production efficiencies exceeding 300 PPM, which is roughly ten times the 20-30 PPM efficiency of traditional pouch and prismatic batteries. Additionally, the standardized design of cylindrical batteries allows them to be compatible with various voltage platforms, from 400V to 1200V, fulfilling automotive manufacturers’ needs for shorter development cycles and increased vehicle models. This year, EVE Energy and Tianpeng Power have both commenced production at their cylindrical battery factories in Malaysia, further validating the confirmed demand for cylindrical batteries in the global market.

A comprehensive “battle for application scenarios” has begun, with large cylindrical batteries increasingly penetrating the affordable and mid-to-high-end power markets, presenting opportunities for companies equipped with relevant technology, processes, and production capacity. This includes firms already engaged in the pouch battery sector, such as EVE Energy, Sunwoda, Envision AESC, and Zhongxin Innovation, as well as companies like Blue Lithium and its subsidiary Tianpeng Power, which specialize in cylindrical batteries. However, the ongoing reshuffle in the cylindrical market is primarily driven by precise selection and deep penetration into different application scenarios. Looking back at the market data from 2024, the structure of the cylindrical battery market has changed significantly. Various data sources indicate a decline in the shipment of cylindrical batteries for power applications, mainly influenced by fluctuations in the sales of Tesla’s 21700 models, while shipments for electric two-wheelers and power tools have seen substantial growth.

Moreover, the shipments of cylindrical batteries from Japanese and South Korean manufacturers have notably decreased, while Chinese manufacturers have experienced rapid growth. Reports indicate that Chinese companies captured over 40% of the global cylindrical battery market share by 2024. This surge in Chinese companies can be attributed to their ability to seize market opportunities: successfully replacing existing technology routes in established markets for electric two-wheelers, power tools, and residential energy storage (large cylindrical) while actively exploring emerging markets represented by BBU, humanoid robots, and eVTOL vehicles. A notable example is Blue Lithium’s subsidiary Tianpeng Power, which, benefiting from the domestic replacement wave in the power tool market and the rapid growth of high-rate power tool demands, saw its cylindrical battery shipments increase by an impressive 100% in 2024. In the automotive sector, small cylindrical batteries have not completely exited the future stage. As we enter 2025, the pace of market reshuffling accelerates, and the competition for diverse scenarios heats up, especially for small cylindrical batteries, which have long been seen as “supporting characters” but are now actively seeking and expanding new growth spaces in several niche markets.

This month, EVE Energy announced a partnership with Germany’s KBS to focus on the large-scale application of 21700 cylindrical batteries in European logistics vehicles. Meanwhile, German sports car manufacturer Porsche acquired the cylindrical lithium battery business of Varta Group in March and rapidly launched mass production of its V4Smart brand battery—starting production of 21700 cylindrical batteries at its new factory in Nördlingen for use in the new 911 GTS model from April. Public information indicates that the V4Smart battery focuses on high power output and rapid charge/discharge capabilities, with a power density of up to 2.65 kW/kg for its 2.5Ah 21700 battery. This value not only exceeds the standard requirements for conventional electric vehicles but also surpasses the industry target of 2.5 kW/kg set for eVTOL batteries by 2030, showcasing the significant potential of small cylindrical batteries in high-power application scenarios.

In the field of electric aviation, particularly in the eVTOL and high-end drone markets, cylindrical batteries (both large and small) are becoming a battleground for competition. This sector has previously relied on high-rate pouch batteries but is now accelerating the transition to cylindrical batteries due to their compatibility with high rate, specific energy, and safety considerations. In this context, various technical strategies have emerged within the industry. For instance, Zhongxin Innovation has firmly committed to the large cylindrical route, supplying power batteries for Xiaopeng’s two generations of flying cars. In contrast, Ganfeng Lithium has chosen the small cylindrical route, claiming that its 21700 cylindrical cells developed for drones and eVTOLs offer energy densities ranging from 330 to 400 Wh/kg. Achieving this metric consistently would represent a breakthrough of the previously considered insurmountable 300 Wh/kg energy density barrier, better meeting eVTOL’s stringent requirements for lightweight battery systems. Blue Lithium’s subsidiary Tianpeng Power also unveiled its latest full-tab 18650 small cylindrical battery at the end of March, capable of supporting 13C discharge at low temperatures (without triggering 75°C protection) and 5C ultra-fast charging, reportedly meeting eVTOL application needs, with its full-tab production line set to achieve mass production in the second quarter at its Huai’an factory.

EVE Energy has proposed a differentiated solution based on energy density: the company will adopt cylindrical battery technology for energy density demands below 320 Wh/kg. EVE Energy believes that the cylindrical solution, with its comprehensive advantages in design, manufacturing, cost, and safety, particularly its capability for system-level thermal runaway prevention, directly addresses the core pain points of safety and reliability in low-altitude power applications. For higher energy density targets above 320 Wh/kg, EVE Energy prefers to adopt pouch battery technology, viewing it as a pathway toward solid-state battery technology evolution. Meanwhile, BAK Battery has adopted a dual approach, leveraging both large and small cylindrical batteries. In its full-tab 21700 small cylindrical cell series, one product has an energy density close to 300 Wh/kg, supporting continuous discharge rates of up to 8C and fast charging from 10% to 80% in just 10 minutes, making it an ideal choice for lightweight pure electric eVTOL applications. Under its large cylindrical full-tab platform, the 4680 battery can achieve an energy density of 300 Wh/kg and can complete the same fast charge process in just 13 minutes.

This year has also seen the emergence of small cylindrical batteries in the rapidly growing fields of humanoid robots and AI data center backup power (BBU). Market news indicates that Blue Lithium’s second-generation full-tab cylindrical cells for AIDC BBU are set to enter small-scale production this month, with a single discharge power expected to reach 150W. In comparison to BBU, humanoid robots demand even higher battery endurance and rate performance, necessitating further development of 7.0Ah small cylindrical cells. Blue Lithium has long supplied cylindrical cells to robot and robotic dog manufacturers, including Yushu Technology. Concurrently, Ruien New Energy announced the mass production of its 21700-5.0Ah battery, achieving energy densities exceeding 270 Wh/kg, fast charging from 0-80% SOC in 10 minutes, and continuous discharge rates of 70A with 50C pulse capabilities, suitable for electric tools, drones, humanoid robots, and high-end energy storage scenarios.

In the overall evolution of the cylindrical battery market, a crucial technological trend is the increasing adoption of lithium iron phosphate (LFP) and lithium manganese iron phosphate (LMFP) chemical systems, which are showing accelerated penetration. The introduction of this chemical system is profoundly influencing the technological pathways and market applications of both large and small cylindrical batteries. In the small cylindrical sector, policies and regulations are becoming significant drivers for the replacement of lithium iron phosphate. Particularly in the Chinese market, new national standards for electric two-wheelers (effective November 2024) and electric balance scooters and skateboards (effective August 2025) have introduced mandatory battery puncture testing requirements. Given the superior safety performance of lithium iron phosphate materials under abuse conditions (far exceeding traditional ternary materials), the market widely believes this will hasten the replacement of higher-safety lithium iron phosphate small cylindrical batteries for ternary small cylindrical batteries.

Against this backdrop, numerous battery companies have swiftly adjusted their strategies: EVE Energy has launched the LMX small cylindrical battery based on LMFP composite materials, aiming to balance energy density and low-temperature performance; while BAK Battery has introduced the PRO-M series, claiming maximum energy densities of up to 180 Wh/kg. Additionally, the lithium iron phosphate system is opening broader application spaces for large cylindrical batteries, especially in cost- and safety-sensitive public transportation and energy storage sectors. Beyond the mainstream high-nickel ternary route, the research and production of large cylindrical batteries in conjunction with lithium iron phosphate/lithium manganese iron phosphate are progressing simultaneously. EVE Energy has explicitly stated that for battery products below 100Ah, large cylindrical lithium iron phosphate batteries offer greater overall advantages than prismatic lithium iron phosphate batteries, while the application of LMFP can further enhance energy density and low-temperature performance. The company has established large cylindrical production capacities in Jingmen, Hubei (ternary) and Qujing, Yunnan (iron phosphate), both of which are running at full capacity, clearly demonstrating the strategy of leading enterprises diversifying their chemical system layouts based on market demand.

BMW has also publicly stated that while exploring the use of large cylindrical batteries in mass-market models, it is actively researching the potential of combining lithium iron phosphate with silicon-based anodes and assessing the feasibility of new manganese-based cathodes like LMFP. This convergence of technological routes is directly propelling the application expansion of large cylindrical batteries in specific markets, with the electric two-wheeler market being particularly characteristic. Industry data suggests that the overall penetration rate of cylindrical batteries in the rapidly evolving lithium battery two-wheeler market is steadily approaching the 50% target. The observed evolution path indicates a clear iterative trend: initially, newer small cylindrical technologies (such as full-tabs or safer lithium iron phosphate systems) replace existing prismatic and pouch solutions, rapidly gaining market share; subsequently, there is a gradual upgrade to large cylindrical batteries with higher energy densities and easier safety management. In this iterative process, achieving a better balance between safety and mileage has become the core driving force behind the accelerated penetration of large cylindrical batteries in the two-wheeler market. The 3 series large cylindrical battery launched by Guoxuan High-Tech in September 2024, aimed at low-speed vehicles and the two- and three-wheeler market, exemplifies this. This product supports 1C fast charging, boasts a cycle life of over 1500 cycles, and weighs only one-third of the same-specification lead-acid battery while offering double the energy, significantly enhancing user experience. Guoxuan High-Tech reports that its 3 series cylindrical battery capacity has exceeded 5GWh.

According to GGII’s current trends, the shipment scale of large cylindrical batteries in China is expected to exceed 2.5GWh in 2024, with predictions indicating that large cylindrical batteries will fully replace small cylindrical batteries in the lithium battery two-wheeler market, becoming the dominant technology form. Ultimately, this transformation driven by technology and market forces is supported by upstream supply chains. Equipment manufacturers like Yifei Laser have reported a continuous acceleration in orders and shipments for large cylindrical related equipment in recent years. Huaguan Technology has also revealed that it has delivered customized large cylindrical laser cutting and winding machines and related equipment to several South Korean clients.

In summary, the global cylindrical battery market is in the midst of a profound reshuffle driven by technological innovation, manufacturing upgrades, and diverse application demands. The proliferation of full-tab technology and the introduction of materials such as lithium iron phosphate have allowed both large and small cylindrical batteries to achieve new balances in performance, cost, and safety. The competition has shifted towards specific application scenarios, with various manufacturers strategically positioning themselves across high-end electric vehicles, aircraft, robots, two-wheelers, and energy storage sectors. The outcome of this “scenario battle” could reshape the competitive landscape of cylindrical batteries and the entire battery market over the next few years.