CITIC SEC: Solid-state batteries are expected to be the first to be applied in the low-altitude eVTOL field. Focus on four main areas.

CITIC SEC released a research report stating that 2025 is expected to be the first year of commercial operation for eVTOL, with high-performance batteries being the key. In the short term, soft pack and silicon anode batteries are expected to be used in eVTOL, with the long-term trend being solid-state batteries with better safety and higher energy density. EHang, Peak Flying, and leading battery manufacturers are collaborating to develop high-performance batteries, with the solid-state battery EH216-S increasing flight time by 60%-90%. Recent important developments in eVTOL aircraft manufacturers and the solid-state battery industry have been summarized, with solid-state batteries expected to be first applied in low-altitude eVTOL sectors. It is recommended to pay attention to companies at the forefront of eVTOL and solid-state battery industry progress, focusing on four investment themes: 1) eVTOL manufacturers; 2) companies deploying solid-state batteries; 3) companies related to solid-state electrolyte processes; 4) equipment manufacturers for solid-state battery production lines. Key points from CITIC SEC: - 2025 is expected to be the first year of commercial operation for eVTOL, with high-performance batteries being the key. - By 2025, low-altitude infrastructure development will accelerate, and EHang's OC certificate issuance is expected to officially kick off eVTOL operations. The battery system is crucial in eVTOL aircraft, affecting flight endurance and payload capacity. Battery packs with an energy density of 330Wh/kg can effectively support urban air transport and intercity traffic, and solid-state batteries, through the development of new cathode and anode materials, are expected to easily exceed an energy density of 350Wh/kg. In the short term, soft pack and silicon anode batteries are expected to be used in eVTOL, while in the long term, the trend is towards solid-state batteries with better safety and higher energy density, significantly reducing the risk of thermal runaway. - Solid-state batteries are expected to achieve high-end applications first, with mass production both domestically and internationally on the horizon after 2025. It is important to pay attention to the progress of domestic lithium battery equipment manufacturers in the solid-state battery field. The major differences between solid-state and liquid-state batteries lie in the use of solid electrolytes instead of electrolytes and separators, with the solid electrolyte film formation process being key. Domestic lithium battery equipment manufacturers are actively preparing for the solid-state battery sector. Additionally, cooperation between upstream and downstream companies is increasing. Risk factors include: solid-state battery applications for eVTOL not meeting expectations, slower than expected development and cost reduction in solid-state battery technology, underperformance in the overall performance of solid-state batteries, policy changes affecting the development of the solid-state battery industry, risks of technological changes, lower than expected progress in downstream applications and demand, and increased industry competition.