CITIC Securities Wu Weichen: Industry Trends and Fundamentals Drive Double Momentum, Solid-State Battery Sector Enters Value Realization Phase

Solid-state battery sector has experienced an upward trend since the beginning of the year, but has recently entered a phase of oscillation and adjustment, drawing market attention.

Recently, Wu Weichen, Chief Analyst of Batteries and Energy Management at CITIC Securities, told China Securities Journal that the strength of the solid-state battery sector is not merely a thematic hype, but is supported by two solid factors: improvement in the fundamentals of related companies along the industry chain and accelerated industry development. This has strong rationality and sustainability. Benefiting from a comprehensive reversal in prices, orders, and profits across the lithium battery industry chain, coupled with multiple catalysts such as the solicitation of opinions on the national standard for solid-state batteries and successful vehicle testing by several companies, the industry is shifting from the conceptual stage to the industrialization realization cycle. Equipment, materials, batteries, and other segments will benefit sequentially from industry development, highlighting the medium- and long-term structural investment value of the sector.

The sector is not merely a thematic hype

Since the beginning of this year, the Soochow Securities Solid-State Battery Index has oscillated upward, with a 12.15% increase by January 23; afterward, the index began to oscillate and adjust, and by February 5, the increase had fallen back to 5.52%.

Wu Weichen believes that the sector’s strong performance is not just a thematic hype, but is based on the dual solid support of improved performance fundamentals and accelerated industry development. This strength is highly rational and sustainable.

“From the perspective of performance support, most companies related to solid-state batteries are rooted in the lithium battery industry chain, which has already experienced a comprehensive reversal in prices, orders, and profits by 2025,” Wu Weichen said. Several companies in this industry chain have released 2025 performance forecasts, generally showing significant increases. With continued industry prosperity and ongoing order fulfillment, high growth levels are expected to persist into 2026. The sustained improvement in performance provides a solid foundation for sector valuation, moving beyond the logic of pure concept hype, forming a dual drive of “performance + valuation.”

From the industry development perspective, the solid-state battery industry is experiencing multiple key breakthroughs, serving as important catalysts for sector growth. On December 30, 2025, the draft for the national standard of solid-state batteries was officially released. Wu Weichen believes this milestone indicates that China has seized the initiative in formulating industry standards for solid-state batteries, which could further enhance its global industry voice and pave the way for domestic companies’ industrialization.

In vehicle testing, CATL completed vehicle testing of full solid-state batteries from Jingshi in May 2025, and FAW Hongqi announced successful vehicle testing of its solid-state batteries on January 4, 2026. Wu Weichen believes that completing vehicle testing marks a critical step for domestic solid-state batteries moving from laboratory to practical application. Additionally, the CASIP conference held from February 7 to 8, 2026, will be an important industry event, with leading companies such as CATL, BYD, FAW, Geely, Chery, and Gotion High-tech attending and delivering keynote speeches. It is expected to further consolidate market consensus and provide ongoing catalysts for the sector.

Industry enters the realization cycle

The core investment value of the solid-state battery sector lies in the gradual breakthrough of technical bottlenecks and clear expectations for scaled cost reduction. The industry development logic is transitioning from the conceptual stage to the realization stage, with long-term investment value.

Technological iteration and cost reduction at the materials end are fundamental to the industrialization of solid-state batteries. Wu Weichen explained that one of the current core challenges is the maturity of material systems. High-energy-density anode and cathode materials, such as lithium-rich manganese-based cathodes, have not yet achieved large-scale mass production. The preparation processes for sulfide solid electrolytes and their key raw material, lithium sulfide, are not fully converged, and mass production capacity is insufficient. However, this situation is gradually improving. According to publicly available data from SMM, the price of lithium sulfide in 2025 remains between 2 million and 4 million yuan per ton, expected to drop below 1.5 million yuan per ton in 2026; the price of sulfide electrolytes was over 10 million yuan per ton in 2025, and is expected to fall to 5 million yuan per ton in 2026. Rapid price declines will significantly reduce production costs for solid-state batteries, with scale effects gradually becoming evident, clearing key obstacles for industrialization.

Innovations in processes and equipment provide technical guarantees for mass production of solid-state batteries. To address issues such as the insufficient stability of sulfide electrolytes and poor interface contact, all-solid-state batteries adopt new processes like isostatic pressing and dry electrode techniques, which are core differences from liquid batteries in manufacturing.

“Currently, these new processes and specialized equipment are gradually transitioning from pilot lines to semi-industrial lines, with increasing technological maturity laying a foundation for large-scale production,” Wu Weichen said.

Wu Weichen also noted that application demands in extreme scenarios are accelerating technological iteration. These demands will push the upgrade and industrialization of sulfide electrolyte materials, dry electrode, isostatic pressing, and other specialized process equipment, further strengthening the industry development logic.

In the long term, the ultimate threshold for full solid-state battery industrialization lies in controlling the solid-solid interface. Specifically, Wu Weichen explained that on one hand, volume changes during charge and discharge could affect battery performance and cycle life; on the other hand, excessive pressing devices could impact battery volume and energy density, diluting its core advantages. Solving this contradiction requires coordinated efforts from battery and vehicle sides: battery cell production can improve solid-solid interface bonding through processes like isostatic pressing and high-pressure formation; internal modifications or additives can improve interface contact, reducing the need for pressure and costs; vehicle manufacturers can use onboard pressing devices to ensure volume stability during operation. As this core issue is gradually addressed, the industrialization of solid-state batteries will accelerate.

Emerging gradient investment opportunities

With the continuous acceleration of solid-state battery industrialization, investment opportunities in the sector are gradually emerging. Segments such as equipment, materials, and batteries will benefit sequentially from industry development, with different stages emphasizing different investment focuses, forming a gradient of investment opportunities.

“Equipment will be the first to benefit from industry demand surges and will become the main investment focus. Industry development patterns show that new industries often exhibit equipment-led characteristics in their early stages, with initial demand reflected in procurement for experimental and pilot lines,” Wu Weichen said. The production processes for full solid-state batteries differ significantly from liquid batteries, creating urgent demand for specialized equipment like isostatic presses and dry electrodes. The investment in equipment per GWh can reach 250 million yuan, much higher than traditional lithium battery equipment. As the battery industry enters an expansion cycle, equipment companies have started to realize performance from Q4 2025, and the contribution from solid-state battery-specific equipment will become evident from 2026. Due to high technical barriers and strong demand certainty, processes like dry electrodes and isostatic pressing are expected to be the most flexible investment directions.

“The performance realization in materials and batteries will mainly occur in 2027, with long-term growth potential,” Wu Weichen said.

Industry forecasts suggest that solid-state battery shipments could reach 27 GWh in 2027. As mass production scales up, the performance of material and battery companies will enter a release phase. From the 2026 industry trend, semi-solid-state batteries will be the first to expand in consumer electronics, power, and energy storage fields. Products such as vivo smartphones, NIO vehicles, SAIC Maxus, and some energy storage stations have already achieved mass production or announced related plans. As more downstream vehicle models, consumer electronics, and energy storage projects are launched, semi-solid-state battery shipments are expected to see explosive growth.

For full solid-state batteries, as vehicle deployment gradually advances, intensive vehicle road testing will begin in 2026. Wu Weichen recommends paying close attention to investment opportunities in core links such as improvements in solid-solid interface wettability of cell materials, high-voltage equipment for cell manufacturing, and vehicle-side PACK manufacturing and onboard pressing devices.

Regarding investment strategies, Wu Weichen stated that as solid-state battery industrialization accelerates, the current sector’s total market value has surpassed 1 trillion yuan, and the sector index has significantly outperformed the CSI 300 index since 2025, with industry prosperity continuing to rise. Looking ahead to 2026, semi-solid-state batteries are expected to be launched in volume, full solid-state batteries will begin vehicle validation, and the industry is transitioning from the technical breakthrough phase to the early stage of industrialization. It is recommended to seize structural investment opportunities in batteries, materials, and equipment within the sector.

(Source: China Securities Journal)