Summary of Key Points
Effective July 1, 2026, two of the “strictest” new national safety standards for electric vehicles have been officially implemented. The main change is the upgrade of battery thermal runaway requirements from “alerting 5 minutes before a fire starts” to “no fire or explosion within 2 hours after thermal runaway occurs,” along with the addition of tests for bottom impacts and safety after 300 fast charge cycles. This brings three significant impacts:
1. Increased compliance costs for companies: The cost per vehicle will increase by 4,000-6,500 yuan, posing a threat to small and medium-sized battery manufacturers as well as low-end car companies.
2. Leading companies can handle the costs through scale or technology: Some large companies choose not to raise prices, while others may use their larger market share or advanced technologies to offset the increased expenses.
3. Safer new vehicles for consumers: Although existing vehicles are not affected by these new standards, consumers can expect safer models in the future. However, there are concerns about the long-term quality of older vehicles.
These new standards represent a major challenge for the industry in the short term but will drive a shift towards greater safety in the long run.
How Strict Are the New Standards?
The old standard only required an alert 5 minutes before a battery fire started, giving drivers some time to escape. The new standard requires that the battery does not catch fire or explode within 2 hours of thermal runaway, which is a much stricter test of the battery’s heat insulation, heat dissipation, and explosion resistance capabilities.
The newly added tests are more practical and address common issues in daily use, such as bottom impacts (simulating hitting potholes or rocks that could damage the battery) and safety after 300 fast charge cycles. These additional requirements essentially provide extra layers of protection for the batteries.
Who Will Bear the Increased Costs?
- Leading companies are well-positioned: They can absorb the increased costs through their larger market share, cost-effective manufacturing methods (e.g., self-developed batteries), or diversified supply chains to secure lower prices.
- Low-end car companies face difficulties: Their thinner profit margins make it harder for them to cope with the higher costs. They may either have to raise prices and lose competitiveness or be forced out of the market.
- Consumers may pay a premium: In the long run, consumers might see slightly higher prices, but competition will likely keep the increase within a reasonable range (e.g., a few hundred to a thousand yuan).
Will the Industry See a Reorganization?
The new standards are like a “sieve” that will filter out less competitive companies:
- Small and medium-sized battery manufacturers: With higher compliance costs and no significant scale advantages, approximately 30%-40% of them may be eliminated. Some may switch to manufacturing energy storage batteries or batteries for two-wheeled electric vehicles.
- Automakers are cleaning up their supply chains: They are selecting only suppliers that meet the new standards, often using multiple suppliers as backups for greater safety and better negotiation power.
The reorganization will not happen overnight, but the long-term trend is towards a market dominated by stronger, safer companies.
What Do Consumers Gain?
- Safer vehicles: The new standards significantly improve vehicle safety. Issues like spontaneous combustion, slow charging, and explosions are less likely to occur due to enhanced battery and thermal management systems.
- Current concerns: Existing vehicles do not benefit from the new standards, and there are concerns about the long-term quality of older models, as potential battery defects may only become apparent after several years. Additionally, performance declines (such as reduced range or slower charging) are not considered quality issues under current laws.
Where Is Technology Heading?
The focus is shifting from competing on vehicle range to emphasizing safety:
- Liquid batteries: Manufacturers are upgrading insulation and cooling systems to improve safety.
- Solid-state/sodium-ion batteries: These technologies offer better thermal stability, and their commercialization is accelerating.
In summary, the new standards are not a barrier but a catalyst for improvement. While they will cause short-term challenges for the industry, they will make electric vehicles safer and the industry more sustainable in the long run. Ultimately, consumers will benefit from these changes. However, to fully address safety concerns, it depends on whether companies can effectively implement the new standards in all their products and provide adequate after-sales support.
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