The “Toughest Battery Safety Regulation in History” to Be Implemented, Shifting Focus from “Energy Density” to “Safety”

A new regulation titled Safety Requirements for Power Batteries Used in Electric Vehicles—referred to within the industry as the “toughest battery safety regulation in history”—was recently issued and is scheduled to take effect in July 2026. For the first time, it mandates that power batteries must not catch fire or explode following thermal runaway, signaling a shift in industry priorities from “range competition” to “safety competition.”

Leading battery manufacturers such as Contemporary Amperex Technology Co., Limited (CATL, 300750), BYD Company Limited (002594), and Sunwoda Electronic Co., Ltd. (300207) have introduced products that comply with the new national standard, aiming to lead in safety technology. This industry-wide shift—centered on the principle of “no fire, no explosion”—is expected to raise barriers to entry, accelerate the exit of low-end manufacturers, and channel resources toward R&D-driven enterprises, reshaping market dynamics. There is widespread agreement that companies emphasizing safety, research, and product quality will enjoy increased development opportunities.

The new mandatory national standard GB38031-2025, formulated by the Ministry of Industry and Information Technology and officially released recently, will take effect on July 1, 2026. For the first time, it specifies that batteries must not ignite or explode after thermal runaway caused by internal short circuits. It is regarded as the most stringent battery safety regulation to date.

Compared to its 2020 predecessor, the updated version adds fast-charging cycle safety tests for single cells and revises system-level tests to include thermal propagation and bottom impact scenarios. The enhancements are designed to reduce spontaneous combustion risks during the design phase and better safeguard consumer safety.

The regulation includes 7 cell-level tests and 17 system-level tests. Notable additions include simulating internal short circuits with heating elements, requiring that no fire or explosion occur during thermal propagation, an early warning within five minutes of thermal runaway, and no visible smoke in the passenger compartment for five minutes thereafter. In the observation period following a single-cell thermal runaway, no fire should occur for two hours, and all monitored points must stay below 60°C.

A new bottom impact test has also been introduced: battery packs must endure a 150-joule impact from a 30mm steel ball without leakage, shell rupture, fire, or explosion, while maintaining proper insulation resistance. Furthermore, fast-charging cycle tests now require batteries to endure 300 rapid charges and pass external short-circuit tests without causing fire or explosion.
According to strategic expert Huo Hongyi, this standard reflects a systemic “value restructuring,” shifting the industry focus from energy density to safety—from “going farther” to “lasting longer.” It marks a transition in the EV sector toward quality-driven development.

Following the announcement of the new regulation, major battery and EV manufacturers declared compliance. CATL stated it was the first company to meet the new standard. In 2020, CATL began mass production of its first-generation no thermal propagation (NP) battery, achieving the no-fire, no-explosion target six years ahead of regulatory enforcement. Other companies, including BYD, Sunwoda, Gotion High-tech Co., Ltd. (002074), CALB Group Co., Ltd., Zeekr, Geely Auto, GAC Group, and XPeng Inc., also announced that their battery products or EV models comply with or exceed the new standards.

Sunwoda, a core contributor to the new standard, said its long-established safety protocols—such as thermal propagation testing and standards for aged battery cells—already conform to the updated requirements. The company emphasized its continuous innovation and its comprehensive safety and reliability management systems.

Separator technology, a critical material in lithium-ion batteries, plays a key role in fire prevention. Shenzhen Senior Technology Material Co., Ltd. (300568) explained that battery fires and explosions usually result from puncture-induced short circuits or separator shrinkage caused by overheating. Its aramid-coated separator features high heat resistance and fast wetting, with a breakdown temperature exceeding 400°C, offering robust material-level safety.

Solid-state batteries, due to their superior energy density and safety features, are regarded as the next generation in battery technology—especially given the new standard’s emphasis on fire prevention. The industry expects increased adoption of solid-state and sodium-ion batteries.

In May, leading anode material company BTR New Material Group launched comprehensive solid-state battery solutions, including the semi-solid BEIAN FLEX and fully solid GUARD series. BTR reported key safety improvements such as a high-nickel cathode coating that delays thermal runaway by 110 minutes and an inorganic electrolyte micro-coating that improves needle puncture success by 80%. The GUARD series eliminates liquid electrolytes entirely, addressing key safety concerns in lithium-ion batteries.

According to Wanlian Securities, solid-state batteries offer broader temperature ranges and superior thermal stability. Their non-flammable, highly insulating electrolytes reduce the risk of short circuits, better aligning with the “no fire, no explosion” standards. The new regulations are expected to stimulate urgent demand and accelerate commercial deployment.

Although the new standard is viewed as the most stringent safety regulation to date, it presents short-term challenges. Yuan Shuai, co-founder of Xinzhihui’s New Productive Forces Salon, noted that small and mid-sized firms may struggle to meet the technical and financial demands, possibly resulting in market exits, production disruptions, and increased R&D and equipment costs.
The regulation takes effect from July 1, 2026 for newly certified vehicle models and from July 1, 2027 for existing ones, offering about a year of adjustment time for non-compliant EV and battery manufacturers.

In recent years, the emphasis on energy density and price competition led some companies to cut corners. An industry insider noted that one low-cost supplier failed to meet basic quality standards during a bidding process, illustrating the risks of price-driven practices. The renewed focus on safety is expected to reverse this trend and steer the industry toward a quality-first path.
“As safety becomes a core competitive factor, companies focused on R&D and quality will gain more development space,” said the lithium battery industry source. The new regulation represents not just a technical upgrade but a comprehensive restructuring of the industry ecosystem.

According to Everbright Securities, the new standards are likely to increase market concentration. The requirements for new safety-focused manufacturing processes will necessitate production line upgrades. Since technologies like solid-state batteries involve high R&D costs, smaller firms may not be able to keep pace, accelerating consolidation.

Huo Hongyi noted that leading battery manufacturers will differentiate themselves based on: (1) the ability to design end-to-end safety solutions, (2) speed in commercializing lab-level innovations, and (3) brand trust. In a safety-oriented market, customers will favor companies with consistent reliability and proven performance.