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The Rise of Solid-State and Lightweight Power: Can Pouch Batteries Make a Comeback? New Energy Era
Last November, pouch batteries were once again thrust into the industry spotlight due to a rumor.
A video blogger claimed that the Xiaopeng P7+ used pouch batteries. This statement was quickly debunked by Xiaopeng's official statement. The company clarified that the Xiaopeng P7+ actually uses prismatic aluminum shell lithium iron phosphate batteries provided by Hubei Ewe Power Co., Ltd., not the rumored pouch batteries, and urged the public not to believe or spread such rumors.
At present, prismatic iron phosphate batteries are the mainstream, and the cylindrical packaging form has also been revitalized by the 46-series full-tab large cylindrical batteries. The market and general consumers seem to have insufficient trust in pouch batteries, a less prominent technology route.
In February's power battery installation volume, pouch batteries accounted for less than 1%. At this stage, it appears that pouch batteries have lost their market in the domestic new energy vehicle sector.
However, on a positive note, as companies continue to iterate their technologies, pouch battery shipments have increased in several niche areas. The overseas market still has vast potential for development, and the next-generation battery technology of "pouch +" is also expanding the application boundaries for companies.
01 Steady Growth in Consumer Pouch Battery Shipments
Currently, consumer electronics have become the largest and most stable application scenario for pouch batteries. Polymer pouch lithium batteries use aluminum-plastic film as the casing, which is lightweight, safe, and has a flexible design. They also have a high energy density, making them well-suited to the requirements of consumer electronics for thin and light, variable size, and safety.
Since 2024, the global economic recovery has continued, and the rise of the AI wave has led to a new round of product innovation in consumer electronics, further stimulating terminal demand and driving the shipment volume of small pouch batteries back to an upward trend.
Data from SPIR (Start Point Research Institute) shows that the global 3C battery shipment volume reached 66.9 GWh in 2024, a year-on-year increase of 6.9%. It is expected that the consumer electronics industry will continue to grow steadily in 2025, driving the global 3C battery shipment volume to exceed 70 GWh in 2025, a year-on-year increase of 5.8%.
Specifically, mobile phones and laptops are the largest application scenarios for small pouch batteries. In 2024, the shipment volume of mobile phone pouch batteries accounted for 31.3%, and the shipment volume of laptop pouch batteries accounted for 13.6%. Other fields include wireless earphones, e-cigarettes, drones, tablets, wearable devices, power banks, and smart speakers.
In terms of market structure, ATL ranks first globally with a market share of over 25%, and the top ten companies in global shipments. With the gradual exit of Japanese and Korean companies from the consumer battery market, the domestic manufacturers' share is expected to increase.
In the consumer electronics field, in addition to the traditional 3C market, the wearable devices sector currently has huge growth potential. Head-worn wearables such as smart glasses and MR/AR are very sensitive to product weight, and the power consumption of end-side AI applications is relatively high. The battery cost is relatively low, so the requirements for battery performance upgrades and the acceptable cost level are very high, and the demand space for pouch batteries continues to expand.
We expect that the demand for consumer lithium batteries will reach 165 GWh in 2028, with a CAGR of 7.9% from 2023 to 2028, and the consumer business of leading pouch battery companies will continue to grow steadily.
02 Pouch Batteries Have Market Opportunities in the Lightweight Power Market
In the small and medium-sized battery market, pouch battery companies still have market opportunities in niche areas, especially in those sectors that have not yet formed a stable structure, leaving room for second- and third-tier companies.
For example, in the lightweight power market. According to data from SPIR, the global lithium battery shipment volume reached 1501.9 GWh in 2024, a year-on-year increase of 26.0%; the shipment volume of lightweight power lithium batteries was 43 GWh, a year-on-year increase of 21.5%.
In 2024, the decline in the price of lithium batteries for electric two-wheelers drove the penetration rate of lithium-electrification in two-wheelers. First-tier and second-tier cities in China, such as Nanjing, Hangzhou, and Shenzhen, relaxed restrictions on the deployment of shared electric scooters. The penetration rate of rider battery swapping continued to increase, and the export of domestic electric three-wheelers to overseas markets also grew. These factors collectively drove the steady increase in demand for lithium batteries for electric two- and three-wheelers.
SPIR expects that the electric tool and two/three-wheeler market will continue to grow in 2025, with the global shipment volume of lightweight power lithium batteries reaching 50.9 GWh in 2025, a year-on-year increase of 18.4%.
In terms of packaging shapes, prismatic and cylindrical batteries currently have a higher proportion, but there are still many pouch battery companies laying out in the lightweight power field.
Farasis Energy is the earliest domestic power battery company to layout electric two-wheelers, with over 14 years of product application experience. Its pouch battery products serve well-known domestic and international brands such as Zero, Chunfeng Power, Qiu Long, Yamaha, and Polaris. It also has 7 years of market application experience in the battery swapping field, serving customers such as Zili Battery Swapping, ZhiZu Battery Swapping, and China Tower.
According to SPIR, in the e-motorcycle field, New Energy Safety ranks first in market share, using high-performance pouch batteries.
At the same time, the lightweight power market is also considered an ideal application scenario for the industrialization of sodium battery technology. In the process of industrialization, battery companies are "crossing the river by feeling the stones," and prismatic, pouch, and cylindrical forms have all become choices for various companies.
Compared with prismatic and cylindrical batteries, pouch sodium batteries have differentiated advantages: First, the aluminum-plastic film used in pouch batteries is less likely to explode compared to the hard-shell packaging of prismatic and cylindrical batteries. Second, pouch batteries are 40% lighter than steel-shell batteries of the same capacity and 20% lighter than aluminum-shell batteries, directly addressing the weight issue of sodium batteries.
According to an incomplete survey by SPIR, among the sodium battery companies that have launched products, many are betting on the pouch route, such as ChaoNa, ZhongNa, PangGu New Energy, and XingChu Century. The application scenarios are mostly niche markets such as electric two- and three-wheelers.
Pioneer Technology also stated that according to tests, the company's "pouch + poly-anion" solution shows safety comparable to lead-acid batteries. Under this premise, it also meets the requirements of low-temperature performance and battery life for electric vehicles in northern regions.
At present, many companies are betting on all three forms. In the future, they will further develop and produce corresponding sodium battery products according to market trends and application scenarios. In the current stage when the market has not yet fully opened, all three forms of sodium batteries have competitive space.
03 Pouch Power Batteries Have Fallen Behind in Installation
The significant decline in domestic attention to pouch batteries is due to their falling behind in new energy vehicle installations. Since 2020, the installation volume of domestic pouch power batteries has declined sharply.
The data shows that in 2020, the power battery installation volume in China's new energy vehicle market was about 64 GWh. Among them, the installation volumes of prismatic, cylindrical, and pouch batteries were 50.88 GWh, 9.20 GWh, and 3.93 GWh respectively, with corresponding market shares of 79.5%, 14.4%, and 6.1%. The market share of pouch batteries dropped significantly from 13.4% in 2018 to 6.1% in 2020.
On the one hand, subsidies no longer prioritize energy density. In 2019, the maximum subsidy for new energy vehicles was set at 160 Wh/kg with a 1x reward, eliminating additional multipliers for higher energy density models. The energy density advantage of pouch batteries became less prominent.
On the other hand, under the cost reduction and efficiency improvement orientation, prismatic iron phosphate batteries have become the mainstream choice for automakers. With the innovation and development of other battery technologies (such as CATL's CTP battery technology and BYD's "Blade Battery"), these technologies not only improved the energy density and safety of battery systems but also reduced costs. In contrast, pouch batteries lacked advantages in consistency, assembly efficiency, and cost.
Compared with other forms, prismatic batteries have a higher adoption rate in vehicle models priced between 100,000-200,000 and 200,000-300,000 yuan, making them one of the mainstream choices in these price segments. Blade batteries are mainly focused on the 100,000-200,000 yuan segment, where they have established a strong presence. Currently, cylindrical batteries are primarily used in vehicles priced below 100,000 yuan.
By 2024, the domestic prismatic power battery installation volume reached approximately 513.7 GWh, a year-on-year increase of 52%; the pouch power battery installation volume was about 6.4 GWh, a year-on-year decrease of 37%; and the cylindrical power battery installation volume was about 10.9 GWh, a year-on-year decrease of 1%.
Driven by the rapid increase in installation volumes of leading power battery companies such as CATL, BYD, CALB, LFP, EVE, SVOLT, XD, RPL, and ZLNE, which mainly focus on prismatic batteries, the installation volume of pouch battery companies has been significantly squeezed. In February 2025, the installation volume of pouch power batteries was approximately 0.20 GWh, a year-on-year decrease of 39%, with a market share of only 0.58%, reaching a new low.
In terms of downstream automakers' attitudes, pouch batteries are not very "friendly" under the cost reduction and efficiency improvement orientation.
In January of last year, Reuters cited an informed source stating that due to durability issues and potential leakage risks, BYD planned to stop producing pouch batteries for its plug-in hybrid (PHEV) vehicles.
Previously, BYD recalled over 60,000 units of the Tang DM-i model using pouch batteries, citing "potential thermal runaway" issues with the battery packs in the recall plan.
Reports indicated that according to the plan, BYD will completely discontinue the use of pouch batteries in early 2025; Elon Musk, CEO of Tesla, also "strongly advised" against using such batteries due to their poor consistency.
Affected by the market environment, domestic pouch battery companies have been in a difficult situation in recent years.
Comparing the top 10 pouch battery companies in 2020, only CATL and EVE remain in the top 10 domestic installation list today, and both currently focus mainly on prismatic batteries.
To break free from the hard and seek performance growth, many pouch battery companies have gradually shifted towards prismatic iron phosphate batteries, large cylindrical batteries, or targeted solid-state batteries, developing products suitable for energy storage, small power, low-altitude flight, and other fields.
In terms of performance, due to intense industry competition, overcapacity, and price declines, coupled with a significant drop in market share, pouch battery companies are generally in a loss-making state. Farasis Energy, a leading company in pouch power batteries, covers the global market with its products, and its main customers include Mercedes-Benz and GAC Group. Since its listing in 2020, Farasis Energy has never achieved profitability, and its losses have been increasing year by year.
In September of last year, Sangteng New Energy was disclosed by its shareholders to have applied for bankruptcy reorganization; according to public information, JieWei Power ceased production on December 1, 2023, due to market and upstream and downstream industrial chain impacts. According to the latest reports, in March this year, LG New Energy introduced the core team from JieWei Power to strengthen its shortage in the field of phosphate iron lithium batteries.
SPIR believes that in the new energy vehicle field, prismatic batteries will dominate in the long term, and large cylindrical batteries are expected to capture a portion of the market share.
04 The Overseas Market as the Main Battlefield for Pouch Power Batteries
Compared with the domestic market, the overseas market is more favorable towards pouch batteries, with a larger potential demand space.
In 2020, among the top 20 best-selling new energy passenger vehicles in Europe, 15 models were equipped with pouch batteries. Many high-end configuration new energy vehicles abroad also adopt pouch battery technology.
Taking Farasis Energy as an example again, from 2017 to now, Farasis Energy has continuously ranked first in China's pouch power battery installation volume for eight years and has been in the top three globally for many years. The company's performance in the overseas market is even more remarkable.
Although Farasis Energy did not make it into the top ten global power battery installation volume list in 2024, it ranked eighth in the "outside China" global market power battery installation volume, with a market share of 7.5%. Its pouch batteries, known for their high safety, have captured the European luxury car market, accounting for over 30% of the Mercedes-Benz EQS and Porsche Taycan.
At the same time, as a typical representative of overseas pouch battery companies, South Korean battery companies LG New Energy and SK On have considerable pouch battery orders.
On March 20, SK On announced a battery supply agreement with Nissan Motor. SK On plans to supply nearly 100 GWh of high-performance, high-nickel pouch batteries manufactured in the United States to Nissan Motor. These batteries will be used in Nissan's next-generation electric vehicles produced at the Canton automotive assembly plant in Mississippi, USA. The supply will begin in 2028 and end in 2033.
From the automakers' perspective, many well-known Japanese, Korean, European, and American companies are purchasing pouch batteries, including Nissan Motor, Volkswagen, Audi, Mercedes-Benz, General Motors, Hyundai, and Ford.
However, due to geopolitical factors and long-term cooperation binding, these automakers tend to choose to cooperate with South Korean battery companies. It is more challenging for domestic pouch battery companies to enter the supply chain and capture market share.
It is worth noting that the global market share of South Korean companies LG New Energy and SK On is declining, and they are in difficulty.
LG New Energy and SK On reported losses of 22.55 billion won and 35.94 billion won respectively in the fourth quarter of last year. Their market shares were 10.8% and 4.4% respectively. To get out of trouble, South Korean companies have begun to focus their technological efforts on phosphate iron lithium batteries and large cylindrical batteries represented by the 46 series.
In recent years, phosphate iron lithium batteries have become popular globally. Many international automakers' models have adopted prismatic iron phosphate batteries to meet market cost reduction demands. At the same time, the enthusiasm of Tesla, BMW, and other automakers for large cylindrical batteries has prompted battery companies to shift towards this technology route. Both domestic battery companies such as CATL, EVE, and Envision Power, and four South Korean and Japanese battery companies have increased relevant capacity construction, which will to some extent compress the market demand for pouch batteries.
05 Pouch Solid-State Batteries "Riding the Wind"
Despite the low valley of pouch battery installation volume, with the "fire" of solid-state batteries igniting the investment enthusiasm of the industry chain, various battery companies have begun to follow up and iterate pouch solid-state battery products.
Industry insiders generally believe that the solid-state battery technology route is most likely to bring about the resurgence of the pouch packaging form.
Firstly, the stacking packaging process of pouch batteries can perfectly match the physical properties of solid electrolytes; secondly, the aluminum-plastic film casing can automatically expand to release internal pressure when the battery overheats, significantly enhancing safety; thirdly, the lightweight casing design helps achieve higher energy density; in addition, pouch batteries also have multiple advantages such as large design flexibility and good cost control.
From another perspective, the all-solid-state form can solve the two major safety hazards of pouch batteries. Pouch batteries have always had problems with bloating and leakage at the electrode welding points, which cannot be solved by new technologies such as PET copper foil or aramid separators. Only by iterating to an all-solid-state form and eliminating the liquid electrolyte can these pain points be addressed.
In terms of application scenarios, high-end passenger vehicles, low-altitude economy (such as drones and electric flying cars), humanoid robots, and other fields will be future application scenarios for pouch solid-state batteries.
Currently, mainstream power battery companies, solid-state battery companies, and new forces have all entered the field. For pouch battery companies, years of experience and technological accumulation in pouch batteries give them a first-mover advantage.
According to an incomplete survey, domestic companies such as CATL, Farasis Energy, CALB, Ganfeng Lithium, EVE Energy, Weilun New Energy, Taiblue New Energy, and Qingtao Energy, as well as overseas Japanese and South Korean battery companies and automakers, have all adopted the "pouch + solid-state" approach. Domestic companies are progressing faster, and many of the above-mentioned companies have already applied pouch packaging to some semi-solid-state and all-solid-state battery products.
As the efficiency of stacking continues to improve, pouch stacking is expected to gain cost advantages, further facilitating the industrialization of solid-state batteries.
In terms of corporate progress, Farasis Energy revealed in its March investor relations activity record that its semi-solid-state battery products have already achieved scaled shipments. The first generation of semi-solid-state batteries was successfully installed in vehicles in 2022, and the second generation of semi-solid-state batteries has an energy density exceeding 330 Wh/kg and a cycle life of over 4,000 cycles. It is expected to be mass-produced in 2025 and is likely to be commercialized first in high-tech barrier and high-performance requirement fields such as the low-altitude economy and humanoid robots.
Farasis Energy has already connected with domestic leading humanoid robot companies to meet battery needs. In addition, Farasis Energy supplied samples to eVTOL (electric Vertical Takeoff and Landing) customers for the first time in 2020 and completed certification. It delivered the first generation of eVTOL power battery products in 2022 and validated the second generation of product systems. The second-generation plus version of the eVTOL cell is expected to be mass-produced in 2026, with an energy density greater than 350 Wh/kg. Meanwhile, multiple semi-solid-state cells for logistics and agricultural drones are also expected to be put into production around this time.
EVE Energy has been working with an overseas company in the eVTOL battery field for three years and has delivered A samples to overseas aviation partners. The energy density is as high as 320 Wh/kg, capable of fast charging to 80% within 10 minutes, meeting a high discharge rate of 10C throughout its life cycle, and ensuring more than 7,000 cycles of use.
Recently, both EVE Energy and Farasis Energy announced that they have obtained the qualification for development of low-voltage lithium battery systems for Xiaopeng Huitian's flying cars, marking another key breakthrough in the low-altitude economy field.
From the automakers' perspective, domestic automakers are advancing the installation of semi-solid-state batteries through independent research and development or cooperation. Traditional fuel vehicle and new energy vehicle giants such as NIO, SERES, and SAIC have all partnered with solid-state battery manufacturers to focus on the mass production and installation of semi-solid-state batteries. For example, NIO has partnered with Weilun New Energy, SERES with Ganfeng Lithium, SAIC with Qingtao Energy, and Changan Automobile with Taiblue New Energy.
In terms of capacity planning, according to the disclosed information from company websites or official WeChat accounts, the domestic solid-state battery capacity that is already in place, under construction, or planned reaches hundreds of GWh. The overall industrialization progress in China is relatively fast, with packaging forms including pouch, prismatic, and cylindrical, mainly dominated by pouch.
From the perspective of industrialization progress, the commercialization of semi-solid-state batteries is accelerating, with many companies speeding up their layout to seize the first-mover advantage. The highly anticipated all-solid-state batteries still have a long way to go. The development of technology is still facing multiple technology routes running in parallel, with different lithium battery manufacturers having their own performance advantages. This is mainly due to the low technological maturity, as no battery manufacturer has yet found a technological route that can comprehensively improve all important performance indicators of batteries while keeping costs under control.
