Great Wall Securities: Raising the national standard for power battery safety may facilitate the clearance of inefficient production capacity at the end

The Zhitong Finance App learned that Great Wall Securities released a research report saying that at present, Chinese lithium battery companies have obvious large-scale production capacity and leading advantages in high-end technology in the global power battery industry, and the trend of maintaining long-term steady growth and development can be expected. On the one hand, this is because China's domestic market demand for new energy vehicles is large enough; on the other hand, relatively complete supply chain support is beneficial for enterprises to participate in global competition on the premise of reasonable profit margins. Raising industry safety standards at the national level this time is conducive to strengthening the concentration effect of leading companies and helping high-quality enterprises improve the quality of their operations.

The main views of Great Wall Securities are as follows:

Incidents

On March 28, the mandatory national standard “Safety Requirements for Electric Vehicle Power Batteries” (gb38031-2025) organized by the Ministry of Industry and Information Technology was approved and issued by the State Administration of Market Supervision and Administration and the National Standardization Administration, and will be implemented on July 1, 2026.

The new requirements have revised a number of key technical indicators for power batteries, putting safety at the top of the top priority in this increase in national standard rules

The state focuses on introducing safety policies related to power batteries for new energy vehicles, with the aim of improving the quality of production and operation of the industry. According to data released by the Passenger Federation, in April 2025, it was initially estimated that the total retail market size of passenger cars in the narrow sense of the term was about 1.75 million vehicles this month, up 14.4% from last year, and -9.8% from the previous month. New energy retail sales are expected to reach 900,000, with a penetration rate of 51.4%. However, in mid-April, the overall car market discount rate was about 23.7%. On the other hand, the price competition for new energy vehicles is still fierce, and the pressure on car companies to reduce costs and increase efficiency is still huge.

As an important means of transportation for the public on a daily basis, cars have a profound impact on safety

Compared with fuel vehicles, the safety of power batteries, which are the key power components of new energy vehicles, is a core reflection of the quality of production and operation in the industry.

The power battery industry's leading concentration effect is remarkable, and inefficient production capacity at the end needs to be cleared in an orderly manner

The power battery industry has been showing a concentrated market pattern for a long time due to its technical intensity and manufacturing complexity, but since the end customer NEV industry has always been in a period of rapid growth in recent years, the absolute value of power battery installed demand is large and the dynamic competitive pressure on power battery prices is greater, so the end production capacity is slow to arrive on paper.

The current national standard adjustment directly hits the core performance index of power batteries from a safety perspective. It introduces higher binding requirements for the entire industry, which is conducive to eliminating price factors, while clarifying inefficient production capacity at the end of the power battery industry in an orderly manner in terms of product performance, reducing the risk factor of new energy vehicles in extreme accident situations.

Risk warning: rising trade protectionism, geopolitical risks, fluctuating raw material prices, and large investment in technology research and development.