Collaboratively Creating "High Standards": Supporting the Green Transformation of Economic and Social Development

I'm going to start today with a piece of bad news. Some media outlets have reported that by 2050, with global warming, most of the world's cities will be too hot to host the Olympics. 

The climate issue is serious. What can we do? The world is looking for answers. 

Recently, China released the Opinions on the Comprehensive Green Transformation of Economic and Social Development, outlining the top-level design, phased objectives, and policy framework for green transformation. I think this is one of China's solutions for a better world. 

Promoting the green transformation of energy and transportation is crucial for the overall green transition and a major issue for survival and development of mankind. 

The battery, essential for driving the transition, has now entered a new stage of development. 

Last year, I proposed that the EV battery industry should transition from adequacy to excellence. This year, I believe the industry must advance to a stage of "high-standard" development. 

What does "high-standard" development mean? What on earth can we do? I have the following four suggestions: 

First and foremost, it is about high level of safety. 

High level of safety is the lifeblood of a sustainable industry. According to the Ministry of Public Security, the number of new energy vehicles (NEVs) in China had reached 25 million by the end of June. According to the China Passenger Cars Association (CPCA), the domestic retail penetration rate of new energy passenger cars reached 51% in July and is expected to surpass 53% in August. The market size of NEVs continues to grow. 

To improve NEV safety, the key factors are the battery and standards. Currently, the vast majority of batteries on the market are far from safe. Many products claim to have a failure rate at the PPM level, or one in a million, but in reality, the rate is closer to one in a thousand. Currently, the number of cells powering the country's 25 million NEVs has reached billions. This absolute value is multiplied by the failure rate, resulting in a significant safety risk. 

That's why I argue there has to be an absolute standard for safety. 

Currently, CATL has successfully reduced the failure rate of cells to one part per billion, i.e., PPB level, raising the safety factor by several orders of magnitude. Why do we do this? It is because safety is our lifeline. 

Battery safety is a complex engineering system that spans the entire process, from battery material development and cell design to system integration and battery use. 

For batteries, the intrinsic thermal stability of materials is crucial. Additionally, the integration of cells into a battery system involves significant interactive processes. Why are batteries so hard to make? The most important question is whether all potential side effects in the battery system have truly been explored. After all, we can't merely understand a battery as a mechanically assembled object. 

I hope the industry will set competition aside and prioritize the immediate interests of consumers, especially our safety. Let's work together to raise safety standards and establish an absolute red line for safety. 

Secondly, it is about high reliability. "Reliability" is the competitiveness of the EV battery industry. Only high reliability can make users secure and the industry grow. Currently, the industry presents a mixed bag; many products' names do not reflect their true quality, with a significant gap between their advertised and actual reliability. 

Some battery makers claim that their batteries will last  16 or 20 years. But how are you going to know that your battery will last 20 years? Have you tested 20 years? Will the battery still last 20 years under all the extremes? 

Therefore, we have established a reliability management system to realize an all-round systematic coverage of battery design, production, raw materials and after-sales market. At the same time, we have the industry's most advanced reliability evaluation system. 

We have developed "accelerated testing" methods and life prediction models that accurately forecast and validate battery life. This is based on an in-depth analysis of the material's underlying mechanisms and corroborated by extensive R&D data and market-side big data. 

Moreover, we have developed the "Equivalent Testing" methodology and standard based on the application scenarios, ensuring that the test accurately reflects real-world working conditions and preventing any detachment from the actual situation. 

I hope that by working with relevant government agencies, the industry will work together to establish "high standards" in reliability management and testing methods to ensure "high reliability" of EV battery products. 

Third, high performance. 

The industry is constantly evolving and new application scenarios are emerging. Currently, the widespread adoption of electric commercial vehicles is imminent, electric ships are set to launch, and electric airplanes hold vast potential for development. It's a good time to pursue new breakthroughs in the industry. 

However, new scenarios have also given rise to higher requirements for battery performance, and batteries need to make innovative breakthroughs in terms of safety, reliability, energy density, fast charging, cycle life, and temperature resistance. 

In the first half of the year, we introduced the Shenxing Plus battery in the passenger car segment. This is the first LFP battery in the industry that simultaneously realizes 1,000-km range and 4C superfast charging. 

For commercial applications, we launched the first commercial battery brand "Tianxing". For the first time in the industry, Tianxing has achieved 4C superfast charging and 500 kilometers of range. 

In the field of electric ships, as of the end of August, about 700 electric ships have been equipped with CATL batteries in various types of domestic waters. 

The future potential of the electric airplane sector is immense. Last year, we successfully test-flew a 4-ton electric aircraft. By the end of this year, we hope the eVTOL equipped with CATL batteries will be able to make its maiden flight. 

Fourth, high value. 

The power output of a good battery is just the "basics". We hope that the battery will release multi-dimensional economic and social value, and create "high value". A good battery can even be an "investment". 

For example, V2G technology, or Vehicle to Grid, which is often discussed in the industry, is a technology that links vehicles to the grid. The essence of V2G is Battery to Grid (B2G), which is a technology that enables bidirectional integration and interaction with the grid using batteries in vehicles, boats, and other equipment. We are now piloting this model, which includes the interaction of various types of batteries with the power grid and local area network. 

This allows consumers to own batteries that are not only consumer goods but also valuable investments. Batteries can offer significant value to consumers in areas where the difference between peak and off-peak electricity prices is substantial. Simultaneously, the battery can function as a "power bank," balancing wind power, solar power, storage, and charging. In cases of extreme grid instability, it can also be utilized as a power supply. 

So, B2G technology has both social and personal economic value. 

This high value necessitates exceptional battery cycle life, safety, and energy efficiency. Such a battery not only provides power for travel services but also offers storage and charging solutions. Additionally, it can help users profit from price differences, turning it into an investment and providing a security guarantee for society. 

Today, I would also like to take this opportunity to comment on two topics that have attracted much attention recently. 

First, on the progress of all-solid-state batteries. We have invested 7-8 years in research on all-solid-state batteries. The key to developing all-solid-state batteries lies in the study of materials and chemical systems, and the most difficult of which is the "solid-solid interface" problem. If you use the numbers 1 through 9 to indicate the technological and manufacturing maturity of solid-state batteries, 1 represents the initial involvement in the field, while 9 signifies that the technology is mature enough for mass production. The current industry's highest level is only about 4, which means only a few device samples and some experimental verification have been conducted. The need for these devices to operate under stringent conditions, such as 6,000 standard atmospheric pressure to achieve presentable low-temperature performance, indicates they are not yet suitable for market application. 

Our current research progress is also at around 4, but compared with the global industry situation, our research progress is second to none. 

Secondly, which formats of battery cells is the best – pouch, prismatic, or cylindrical? On this issue, I'd like to invoke an old Chinese saying: "To become a true gentleman, one must balance native subatance and cultural refinements." "Cultural refinments" refers to the surface form, which is external, while "native substance" is the core essence, which is internal. Native subatance and cultural refinements should be mutually synergistic. They are akin to a chemical system and packaging form, where each complements and adapts to the other. This relationship can be considered as civil and good. 

There is a saying in CATL, "Hone your basic skills and think outside the box". I would also like to take this quote out and share it with people in the industry! Let's practice the "basic skills" of materials and chemical systems, give full play to the "imagination" of innovation and foresight, and create an era of high standards for EV batteries!