The future market outlook for electric vehicles (EVs) remains optimistic. According to McKinsey’s latest report (August 2024), approximately 80% of European consumers expressed a willingness to purchase EVs in the future.

However, global EV sales have encountered headwinds earlier this year, with growth slowing, particularly in Europe and the United States. This raises a critical question: do all key players across the value chain—cell manufacturers, automakers, regulators, charge point operators (CPOs), and consumers—possess the necessary momentum to drive the EV transition forward?

After more than a decade of development, has battery technology advanced sufficiently to support sustainable growth?

Before we can answer these questions, every stakeholder must confront a harsh reality:
The EV market has expanded, but to sustain this growth, attracting more consumers is vital. Achieving this requires simplifying the transition while maintaining the core benefits that make EVs appealing to buyers.

According to McKinsey’s August 2024 report, consumers’ hesitation in adopting EVs stems largely from differences in usage scenarios and habits compared to internal combustion engine (ICE) vehicles.

2 Obstacles in the BEV Development

As a key player in the value chain, we, as battery manufacturers, have analyzed the critical role batteries play in BEV development and identified two major obstacles:

A.Overall Cost of Ownership

1. Initial purchase price
2. Residual value of second-hand cars
3. Recycling costs

B. Range Anxiety

1. Driving range across all weather conditions and scenarios
2. Inconvenient charging

However, it is crucial to highlight a third and potentially more significant challenge: safety. As EV adoption scales, safety concerns could become the biggest hurdle to replacing ICE vehicles. Current approaches, such as using modules to enhance safety, still carry inherent risks. These risks will become increasingly apparent as EV sales grow.

The ultimate solution must begin with innovations in the battery’s chemical system. As we aim for a 25–30% market share, addressing these risks step by step is not just essential—it’s urgent.

Next, let’s examine the current battery chemistry systems and module designs, and conduct a comparative analysis of ICE and BEV solutions based on mainstream battery technologies.

Through this analysis, we aim to infer potential battery solutions that can build consumer trust, focusing on advancements in cell systems, modules, and supporting technologies.

Exploring Battery Systems: NCM vs. LFP

The foundation of any BEV lies in its battery system. Currently, two dominant types of battery cells exist: NCM (Nickel-Cobalt-Manganese) and LFP (Lithium Iron Phosphate).

In 2019, the demand for longer range highlighted the limitations of LFP batteries, such as their lower energy density and slower improvement trajectory, despite their cost advantage. In China, LFP’s market share declined from its leading position in 2010 to just 25–30%, while NCM rose to over 65%, driven by its superior and improving energy density.

However, in 2020, several BEV battery fires in China—including high-profile incidents linked to high-nickel NCM batteries—caused development to stall. Safety concerns were temporarily addressed through modular designs, but neither LFP nor NCM batteries addressed these issues at their root.

From 2019 to 2024, advancements in energy density for traditional lithium batteries slowed considerably. NCM battery energy density increased from 245–265 Wh/kg to 285–287 Wh/kg, reflecting an annual growth rate of just 2.7–3.2%. Meanwhile, LFP batteries adopted Cell-to-Pack (CTP) technology, which improved pack-level energy density even though cell energy density remained lower.

LFP + CTP packs achieved approximately 400 Wh/L with 60% volume utilization, while NCM packs reached 560–620 Wh/L but utilized only 40–45% of their volume. However, LFP packs are heavier, requiring 8–10% more energy than NCM packs to achieve the same driving range.

Market Shifts and Cost Pressures

Beyond range improvements, the removal of subsidies in 2022 made purchase cost a critical factor, driving renewed interest in LFP batteries. By 2022, LFP batteries had surpassed NCM in market share within China, reaching over 65% by 2024. This rapid growth—from 30% to 65%—signaled a shift in consumer priorities from early tech adoption to practical, cost-effective use.

LFP + CTP became essential as traditional lithium batteries struggled to balance energy density improvements with cost efficiency. However, in early 2024, Goldman Sachs identified low BEV resale values as a significant barrier to market growth. While LFP batteries are initially cheaper, their non-repairable CTP design results in low resale values after 3–5 years, discouraging repeat purchases.

The Need for True Innovation

Both LFP + CTP and NCM + Module designs face persistent challenges, particularly in volumetric energy density and total cost of ownership—including upfront costs and residual value. These designs, while functional, fail to fully address consumer concerns.
To unlock the full potential of BEVs, a truly innovative battery solution is urgently needed.

Addressing Range Anxiety and Balancing Cost in EV Design

The balance between initial cost and driving range remains a pivotal challenge in EV development. Interestingly, inspiration may come from ICE (internal combustion engine) vehicles, providing an opportunity to reassess whether current EV and battery designs are truly on the right track.
To address these challenges, two key objectives must be met:

1. Reducing Range Anxiety
   • This can be achieved by expanding charging infrastructure and improving energy efficiency.
2. Balancing Affordability
   • Identifying the best strategies to alleviate range anxiety while maintaining competitive pricing is essential.

At the core of this effort is understanding what consumers value most: BEVs need to replicate the driving experience of ICE vehicles while offering distinct advantages that outweigh any perceived differences.

Achieving this balance will set the stage for BEVs to enter a second wave of rapid growth, positioning them as the top choice for all consumers and driving the next chapter in sustainable transportation.

Learning from ICE: Closing the Charging Gap

A key element of reducing range anxiety lies in charging, which remains inconvenient for many EV users. Reflecting on the evolution of ICE vehicles offers valuable insights into this challenge.

Looking back at ICE driving ranges since 1980, it’s clear that drivers never experienced the range anxiety common among EV users today. From 400 km in 1980 to 650 km in 2020, ICE drivers of all vehicle types had confidence in their refueling options.

So, why do today’s BEV users require an average range of 504 km? The key difference lies in the convenience of refueling versus charging. Long charging times and insufficient public charging stations significantly affect the BEV experience.

Between 1980 and 2020, ICE drivers prioritized fuel efficiency over range because refueling took only 3–6 minutes. Gas stations thrived due to fast turnover, serving 12–14 cars per hour during peak times. This operational efficiency attracted further investments, ensuring widespread availability and cementing ICE vehicles as the primary choice.

To bridge this gap, the BEV industry must examine how the ICE ecosystem built its success and adapt those lessons to create a more seamless and accessible charging infrastructure for BEVs.

The Need for True Fast Charging

As ICE vehicles transition to BEVs, a significant challenge becomes evident:

• Current lithium batteries cannot deliver true fast charging. Charging 60–80% in 25–40 minutes is considered fast today, but real fast charging should take only 5–8 minutes. Achieving this would boost driver confidence and improve charging station profitability.
• Long charging times reduce station turnover, leading to peak-hour congestion and making it difficult for operators to recover costs.

For charging stations to expand, they must first be profitable. Once widespread, range anxiety will no longer depend on whether EVs offer 400 or 500 kilometers per charge.

This would create a positive cycle: more drivers adopting EVs would attract greater investment in charging infrastructure, fostering a healthy EV ecosystem. Over time, EVs will become as common and convenient as ICE vehicles.

With range anxiety addressed, consumer attention will naturally shift to energy efficiency and EV performance under varying driving conditions, setting the stage for the next phase of innovation. One significant factor influencing energy efficiency is the weather.

The Impact of Weather on BEV Energy Efficiency

Weather changes, whether hot or cold, affect energy performance in both ICEs and BEVs, but the impact on ICEs is usually minimal. For BEVs, however, low temperatures significantly reduce usable energy due to the electrochemical properties of batteries.

At temperatures between 0°C and -15°C, energy efficiency drops sharply to 65%–40%. This explains why consumers demand a 500-kilometer range: cold weather can reduce it to 325–200 kilometers or less.

The root issue lies in traditional liquid electrolytes. As temperatures approach the electrolyte’s melting point, ion movement slows drastically, reducing conductivity and overall performance.

Current solutions involve using heating modules to warm the battery pack, which helps improve performance in cold conditions. However, this method only addresses surface-level symptoms and does not resolve the fundamental issue of low energy efficiency in electrochemical reactions at low temperatures.

A true solution requires improving the electrolyte itself. Developing low-melting-point, high-conductivity liquid electrolytes or adopting inorganic solid-state electrolytes—which do not melt—could ensure that actual driving ranges remain close to their design specifications, even in extreme weather conditions.

High-Speed Driving: Another Key Challenge for BEV Energy Efficiency

While weather conditions play a significant role in energy efficiency, another common scenario significantly impacts BEV performance: high-speed driving.

It is well known that driving at low speeds reduces energy consumption, which benefits BEVs. On the other hand, at higher speeds, greater discharge currents increase energy usage and generate more heat. This, in turn, triggers frequent activation of cooling systems, further increasing energy consumption and reducing the vehicle’s range.

To address this issue, batteries require lower internal resistance and improved discharge capacity. As for the battery structure, a large footprint design (200–500 × 560 mm) has proven to be ideal.

Compared to cylindrical batteries, such a design offers 6–7 times more heat dissipation area and 11–12 times more than prismatic batteries. By incorporating ceramic separators, which enable faster heat dissipation and better ion conductivity, resistance is further reduced. This minimizes energy loss, bringing the actual driving range closer to the theoretical values promised by the battery design.

Toward an Optimal Battery Solution

With advancements addressing the challenges of weather and high-speed driving, the next step is to consider a holistic solution that balances energy and cost efficiency.

We believe the optimal battery solution must prioritize both energy efficiency and cost-effectiveness. In a mature EV industry, the focus will no longer be on achieving a single, long charge to cover extended distances. Instead, the emphasis will shift to efficient charging and reliable performance across all weather and driving conditions. The current demand for a 500-kilometer range per charge is likely to diminish.

With fast charging times of just 5–8 minutes providing 300 kilometers of range, drivers could enjoy an experience comparable to that of ICE vehicles, enabling a smoother transition to BEVs.

If battery energy density surpasses current lithium-ion technology and continues to improve—without compromising safety or relying on additional pressurization or heating modules—battery pack weight will decrease. For instance, a 55 kWh battery could deliver a 450-kilometer range under any weather condition.

This innovation would also significantly reduce costs, potentially making next-generation NCM batteries as affordable as, or even cheaper than, LFP batteries. Such advancements would bring BEV prices closer to those of ICE vehicles, further accelerating adoption and paving the way for a truly sustainable EV ecosystem.

Portable Chargers: A Practical Solution for Urban Fast Charging

One practical solution to the challenges of urban fast charging is the adoption of portable chargers.
Fast charging in cities faces significant obstacles, including high infrastructure costs and increased pressure on power grids. Portable chargers, resembling large power banks, offer a flexible and cost-effective alternative.

These chargers can be deployed to parking lots by delivery vehicles in the morning, where users can reserve fast or regular charging via a mobile app. Additionally, portable chargers can be stationed at existing charging facilities, creating opportunities for additional revenue streams.

To optimize costs and reduce strain on urban power grids, portable chargers can be recharged in rural areas during off-peak hours. Equipped with built-in batteries, they help balance power demand, providing an innovative solution for energy management.

Safety, however, is a critical factor in their widespread adoption. Recent BEV fires in parking lots highlight the need for robust safety measures to ensure consumer confidence and reliability.

By addressing these challenges, portable chargers could play a significant role in expanding EV charging infrastructure and supporting the transition to sustainable mobility.

The Path to a Strong and Sustainable EV Ecosystem

Traditional lithium batteries have successfully supported the initial stages of EV development. However, to ensure a smooth transition from ICE vehicles to BEVs, a strong and healthy EV industry is essential. In this process, charging station operators will play a critical role.

The next leap in progress will depend on new technologies and simple, effective solutions. Below, we outline the ideal approach to battery cell, module, and charging station designs to establish a robust EV battery ecosystem.

Battery Cell Innovations

The ideal battery cell must combine fast-charging capabilities, low-temperature efficiency, high energy density, and reduced heat generation.

1. Fast Charging (5–8 minutes for 10–80% or 4–6 minutes)

• Fast charging can be enhanced by adopting new electrolytes to improve ion conductivity and using 100% silicon anodes with larger surface areas for better charge transfer in NCM batteries.
• However, LFP batteries face limitations due to crystal phase issues during fast charging, restricting their improvement potential.

2. Low-Temperature Efficiency

• New electrolytes should maintain performance comparable to room temperature at -20°C and operate reliably in extreme cold conditions down to -40°C.
• LFP materials, unfortunately, offer limited potential for improvement in cold weather performance.

3. Energy Density (Specific Energy)

• Energy density must reach 350–360 Wh/kg while ensuring intrinsic safety and electrode stability.
• Large-capacity modules should maintain safety and efficiency without requiring extra safety components, reducing costs and improving reliability.

4. Reducing Heat Generation and Accumulation

This can be achieved through:

• Lowering internal resistance.
• Incorporating ceramic separators to improve heat conduction.
• Adopting large-area cell designs for better heat dissipation.
  These advancements reduce the need for extensive cooling systems, enhancing overall efficiency.

Module and Pack Design

With improved cell energy density, the need for CTP (cell-to-pack) designs, commonly used in LFP batteries, diminishes.

• Modular designs allow for easier repair, increasing EV resale value, simplifying recycling, and improving material recovery, thereby reducing environmental impact.
• Advances in fast-charging technology and energy efficiency could lower required battery capacity to 50–55 kWh without causing range anxiety. This reduction minimizes the need for additional safety and heating systems, cutting costs while maintaining energy density.
• These improvements make EVs more affordable and help close the price gap with ICE vehicles.

Revolutionizing Charging Stations

Charging station design must adapt to support a sustainable EV ecosystem. A battery-to-battery (DC to DC) charging system using portable chargers with built-in batteries offers significant advantages:

• Cost Efficiency: Portable chargers reduce the high infrastructure costs associated with fixed fast-charging stations.
• Urban Compatibility: These chargers minimize the visual impact of charging infrastructure in cities.
• Grid Balancing: By charging during off-peak hours in rural areas, portable chargers help balance energy demand and reduce strain on the power grid.

The Future of EV Affordability and Accessibility

By integrating these advancements in battery technology, module design, and charging infrastructure, the EV industry can move closer to creating affordable, efficient, and widely accessible BEVs. These innovations will not only enhance the EV experience but also accelerate the transition to a sustainable mobility future.