On April 17, 2025, China announced what is arguably the world’s most stringent EV battery safety regulation to date: GB38031-2025. Effective July 1, 2026, this new standard will mandate that EV batteries must not catch fire or explode—even in the event of thermal runaway. For context, thermal runaway refers to a chain reaction where an overheated battery cell triggers adjacent cells to also overheat, potentially leading to fires or explosions.
This isn’t a soft guideline. It’s an enforceable rule that will fundamentally reshape the global battery industry.
And the implications are massive.
Quick Primer: What Are NCM, LFP, LMFP, and Sodium-Ion?
- NCM (Nickel Cobalt Manganese) and NCA (Nickel Cobalt Aluminum) chemistries offer high energy density but pose greater fire risk.
- LFP (Lithium Iron Phosphate) and LMFP (Lithium Manganese Iron Phosphate) are cobalt-free, more stable, and cheaper.
- Sodium-Ion batteries don’t use lithium and are emerging as a low-cost, thermally stable alternative—ideal for short-range EVs and storage.
LFP, LMFP, and Sodium-Ion Take Center Stage
High-nickel chemistries like NCM811 and NCA have long dominated the performance end of the EV spectrum. But they come with a cost: instability. These chemistries release oxygen at high temperatures, making thermal runaway nearly impossible to contain. Even with advanced cooling systems, they can still ignite.
Now, under GB38031-2025, that’s no longer acceptable. Battery packs must not catch fire or explode.
Enter LFP, LMFP, and Sodium-Ion. These chemistries have inherently greater thermal stability. LFP and LMFP cells stay stable up to ~270–300°C and don’t release oxygen, making them far safer by design. CATL’s “No Thermal Propagation” tech and BYD’s Blade Battery have already proven their ability to pass extreme testing today.
Sodium-ion is also emerging as a compelling alternative. With excellent thermal stability, abundant raw materials, and no lithium or cobalt, it’s well-suited for lower-cost EVs, two-wheelers, and grid storage. Energy density (measured in Wh/kg) is lower than LFP today, but it’s improving fast—and its safety profile fits perfectly under the new regulation. Still, limited global sodium carbonate refining capacity remains a hurdle.
Data-Backed Case for the Chemistry Shift
Thermal Stability:
- NCM811/NCA can enter violent thermal runaway at ~200°C
- LFP/LMFP remain stable at significantly higher temperatures without releasing oxygen
- Sodium-ion matches or exceeds LFP in safety
Market Behavior:
- Tesla has shifted its base Model 3/Y to LFP
- Ford, VW, and Stellantis have announced LFP adoption
- Chinese giants (BYD, CATL, Gotion) are expanding LFP/LMFP capacity rapidly
- Sodium-ion pilot production is ramping up at CATL, Farasis, and HiNa Battery
Fleet and Insurance Pressure:
- Fleets prefer LFP due to lower degradation and higher safety margins under fast-charging cycles
- Chinese insurers like PICC and Ping An have reportedly increased pressure on automakers to adopt safer chemistries, citing rising fire-related claims and risk management concerns in internal briefings.
China Leads Again
This is not just about domestic safety. It’s a strategic industrial policy.
China is effectively using regulation to:
- Accelerate the chemistry shift already underway
- Cement CATL, BYD, and Gotion as global leaders in next-gen battery safety and supply
- Push out legacy OEMs still relying on nickel-heavy packs
It’s a calculated strategy. Chinese EVs exported globally will now carry this enhanced safety standard as a showcase of battery innovation. Meanwhile, Western automakers must pivot hard or risk falling behind.
The End of High-Nickel Chemistries?
Even the performance segment is under threat.
LMFP is catching up in energy density (~210–230 Wh/kg at cell level) and can be tuned for higher power output. High-voltage LFP, solid-state LFP variants, and advanced sodium-ion chemistries are closing the performance gap fast.
Add to that better thermal behavior, faster charging potential, and dramatically lower risk of recalls or lawsuits, and NCM/NCA starts to look like a liability—not an asset.
To be fair, R&D on nickel-rich chemistries continues. Toyota, for example, is investing in solid-state NCM with enhanced thermal barriers, while Panasonic is developing thermal shielding systems in collaboration with Tesla. But mass-market viability under China’s new standard remains highly unlikely.
Unless it’s a track-only EV or sold in a market without strict safety enforcement, high-nickel may no longer be viable.
Global Battery Power Shift
GB38031-2025 isn’t just a safety measure—it’s a strategic standard-setting play. By setting a bar that Chinese chemistries and manufacturers already meet, China has:
- Elevated its own domestic tech stack to global standard-setter
- Created a moat around its battery giants (CATL, BYD, Gotion)
- Forced Western OEMs to either license, localize, or lag
Intellectual property is also a factor—Western OEMs may need to license LFP tech from Chinese firms like BYD, which owns key patents in cell-to-pack architecture and thermal safety integration.
Every EV exported from China under this regulation becomes a global endorsement of Chinese battery innovation. The U.S. and EU may respond with moves like the U.S. Inflation Reduction Act, European Battery Alliance, or subsidies for non-Chinese LFP production. But right now, momentum currently favors Beijing.
TL;DR
GB38031-2025 doesn’t just end high-nickel in the mass market—it likely signals its long slow decline.
Sodium-ion will flank the bottom, LMFP the top, and LFP will dominate the middle.
China didn’t just rewrite the rules. It raised the bar—and reinforced its global battery leadership.