Today, the solid-state battery concept once again ignited the market, with Fangda Carbon New Material Co., Ltd. securing two consecutive trading limit-ups, while Keliyuan and Zhenhua Chemical also hit the upper limit. Industry chain players like Lead Intelligent and Great Power followed suit. The catalyst for this rally was Fangda Carbon's announcement of overcoming mass-production challenges for oxide-based solid-state electrolytes, with two core products now operational and deep technical collaboration established with CATL. The energy density and cycle life of ternary lithium-silicon carbon semi-solid-state batteries have reached industry-leading levels, sparking a surge in capital inflows and record-high trading volumes for multiple stocks in the sector.

1. **Technological Breakthrough: A Critical Leap from Lab to Mass Production** Fangda Carbon's breakthrough addresses the industry-wide pain point of "laboratory feasibility but mass-production difficulties" for oxide-based solid-state electrolytes. Its self-developed electrolytes exhibit high ionic conductivity, strong chemical stability, and superior high-voltage resistance and corrosion resistance, compatible with both ternary lithium-silicon carbon semi-solid-state and ternary lithium-metal solid-state battery technologies. The former meets mainstream energy density standards and long-term usage demands for new energy vehicles, while the latter ranks among China's top-tier lab samples, with core metrics rivaling CATL's products.

This progress stems from Fangda Carbon's deep collaboration with CATL. Since signing a strategic agreement in February 2025, the two have partnered across energy material R&D, energy storage applications, and industrial electrification. This milestone signals Fangda Carbon's integration into CATL's supply chain, positioning it for a significant role in semi/solid-state battery mass production.

2. **Industry Momentum: Policy, Capital, and Technology in Sync** The solid-state battery sector is now in a virtuous cycle of technological breakthroughs, capital inflows, and policy support: - **Policy**: China's MIIT and seven other ministries have designated all-solid-state batteries as a key focus, with state funding of ¥6 billion allocated to leading enterprises in 2025. Regional governments like the Yangtze and Pearl River Deltas are rolling out subsidies to accelerate industry maturation. - **Capital**: Institutional funds are pouring in via ETFs and thematic funds. For instance, GF China New Energy Vehicle Battery ETF saw over ¥3.8 billion in net inflows since October, nearing ¥10 billion in scale. Active funds like Yongwin New Materials Hybrid are also targeting solid-state battery opportunities, projecting 2026 as the mass-production inflection point. - **Technology**: Global breakthroughs are accelerating. CATL's sulfide-based solid-state batteries hit 450Wh/kg, targeting small-scale production by 2027. Sunwoda's polymer-based batteries surpassed 400Wh/kg, with pilot lines set for year-end. Gotion High-Tech's solid-state batteries are in trial production, while Tsinghua University and CAS research underpins industrialization with innovations like reduced interfacial impedance.

3. **Supply Chain Opportunities: A Full-Scale Reshaping** Solid-state batteries will redefine the lithium battery ecosystem, with key investment areas including: - **Solid-State Electrolytes**: Oxide (Fangda Carbon, Xiamen Tungsten) and sulfide (Ganfeng Lithium, Shanghai Xiba) dominate. Fangda's oxide electrolytes are CATL-validated, while Ganfeng's sulfides cost 40% less than Japanese alternatives. - **High-Nickel Cathodes & Silicon-Carbon Anodes**: Players like Ronbay and Easpring are tackling interfacial reactions with nano-coatings, while Putailai and Xiangfenghua optimize silicon-carbon anodes for expansion control. Fangda's anodes already supply mid-high-end battery makers. - **Production Equipment**: Lead Intelligent, the sole global provider of turnkey solutions, derives over 30% of 2025 H1 orders from solid-state equipment at 45-50% margins. Liyuan Heng and Manz also excel in coating and extrusion tech. - **Interfacial Layers & Materials**: LiNbO₃ coatings and PVDF-HFP binders enhance stability. Cnano Tech's carbon nanotubes, used in CATL’s condensed batteries, improve conductivity.

4. **Risks & Challenges: Roadblocks to Commercialization** Despite promise, hurdles remain: - **Technology Uncertainty**: Oxide, sulfide, and polymer routes are still competing. Sulfides face air sensitivity and high packaging costs; oxides struggle with impedance; polymers lag in high-temperature performance. - **Cost Barriers**: All-solid-state batteries cost 2.5x more than liquid counterparts, driven by sulfide purification and lithium-metal anode processing. CATL expects cost parity by 2026, but SMEs may falter. - **Overcapacity Risks**: Global planned capacity exceeds 500GWh by 2026, far outpacing demand. Price wars could erode margins if adoption lags.

5. **Investment Strategy: Focus on Validation & Execution** Investors should prioritize: - **Validated Tech + OEM Ties**: Fangda Carbon (CATL-backed), Ganfeng Lithium (supplying Dongfeng and NIO), and Lead Intelligent (equipment leader). - **Policy Catalysts + Earnings Inflection**: Track MIIT reviews (November) and production-line tenders (year-end). High-conviction picks include Ronbay (cathodes), Putailai (anodes), and Tinci Materials (sulfide precursors).

**Risk Warning**: Short-term gains may trigger profit-taking; staggered entry and strict stop-losses are advised. Monitor technology evolution, yield rates, and cost curves to avoid speculative traps.