Aluminum Foam: Mandatory Upgrade for Battery Pack Underbody Protection Opens Up a Multi-Billion-Yuan New Materials Market

For new energy vehicles on the road, a single impact against a rock on the undercarriage can trigger a fire. This critical pain point is driving the emergence of a multi-billion-yuan market for new materials. Starting in July 2026, new regulations regarding electric vehicle Battery safety will come into effect, making underbody protection for battery packs a mandatory requirement rather than an optional feature. Industry estimates suggest that the annual demand for underbody protection materials in the domestic new energy vehicle market alone will exceed 10 billion yuan. Aluminum foam is rapidly becoming the most highly anticipated solution in this sector.

1.Mandatory Standards Create a Market with Guaranteed Demand

The core requirement of the new regulations is straightforward: the underside of the battery pack must withstand heavy impacts and high-speed underbody strikes without leaking, catching fire, or exploding.

What does this mean for automakers? Every new energy vehicle (NEV) must be equipped with underbody protection. Based on a projected domestic NEV sales volume of approximately 13 million uNits in 2025, even at a protection cost of just 500 yuan per vehicle, this represents a 6.5-billion-yuan market. If market penetration and the value per vehicle increase, the market size could easily exceed 10 billion yuan.

More importantly, this is not a market that *might* boom; it represents guaranteed demand driven by mandatory policy. Once the new regulations take effect on July 1, all new vehicle models must pass testing before hitting the market, and existing models will also be retrofitted over time.

 2.Why Aluminum Foam?

 There are several options for underbody protection materials: aluminum honeycomb, carbon fiber, magnesium alloy, and engineering plastics. Why is aluminum foam attracting the most attention?

The key factor is the cost-performance ratio. Carbon fiber offers the best performance but is expensive, limiting its use to high-end models; aluminum honeycomb is lightweight but has limited impact resistance; engineering plastics are cheap but lack sufficient strength and heat resistance. Aluminum foam strikes the optimal balance among performance, weight, and cost.

Specifically, aluminum foam is less than half the weight of steel protection components yet offers several times the energy absorption capacity. This means achieving the same level of protection results in a lighter vehicle body and extended driving range. Furthermore, the material's internal closed-cell structure provides natural thermal insulation, buying precious time for escape in the event of battery thermal runaway.

For automakers, choosing aluminum foam is not necessarily the "technologically superior" choice, but rather the "commercially optimal" one—it ensures safety standards are met while keeping costs, weight, and supply chain factors under control.

 3.Value Distribution in the Industry Chain: Which Segment Is Most Profitable?

 The aluminum foam industry chain comprises three segments: upstream, midstream, and downstream.

Upstream involves raw materials and equipment—primarily aluminum ingots, foaming agents, sintering furnaces, and foaming equipment. This segment faces relatively low technical barriers and offers limited profit margins.

Midstream involves aluminum foam manufacturing—transforming raw materials into aluminum foam sheets or profiles. Key barriers include controlling porosity, ensuring high yields for large-area products, and maintaining process stability. Products made from identical raw materials can vary significantly in performance depending on the manufacturer. This segment presents the highest technical barriers and the greatest profit potential.

Downstream involves application integration—processing aluminum foam into components such as battery pack protective plates or vehicle structural parts for sale to automakers or battery manufacturers. This segment requires certification from automakers; while the process is time-consuming, it fosters strong customer loyalty.

Conclusion: The midstream manufacturing segment holds the most value. Whoever masters the capability for low-cost, high-yield mass production of aluminum foam gains pricing power over the entire industry chain.

 4.Competitive Landscape: A Window of Opportunity for Chinese Enterprises

 Aluminum foam technology originated in Europe and Japan.

However, domestic enterprises have rapidly caught up over the past three years, driven by three key factors:

Process breakthroughs. Domestic companies have made critical strides in mainstream processes like melt foaming and powder metallurgy, significantly improving yields for large-area aluminum foam sheets.

Cost advantages. Leveraging China’s comprehensive aluminum processing industry chain and large-scale manufacturing capabilities, domestic firms enjoy production costs more than 30% lower than their overseas counterparts.

Customer responsiveness. Proximity to automakers and battery manufacturers allows domestic companies to quickly address customization needs and shorten certification timelines.

Now is the prime window for investment. Technology has matured sufficiently for mass production, costs are dropping rapidly, and demand is poised to surge. The first companies to achieve scaled mass production and secure automaker certification will capture the market lead.

5.Cost Reduction Trajectory: When Will the Market Explode?

 The primary reason aluminum foam has not yet achieved widespread adoption is that costs remain too high. Currently, the cost of aluminum foam protective panels is 50%–100% higher than that of traditional steel solutions, making them difficult for automakers to accept.

However, the trend toward cost reduction is clear, driven by three simultaneous factors:

Process optimization. Improvements in foaming techniques and higher yield rates directly lower unit production costs.

Economies of scale. Expanded production capacity spreads out fixed costs, allowing equipment depreciation and R&D investments to be amortized across a larger volume of products.

Raw material price reductions. While aluminum prices fluctuate cyclically, long-term capacity expansion and the maturation of recycling systems offer room for raw material costs to decrease.

The industry projects that within 2–3 years, the cost of aluminum foam protection will fall into a range acceptable to automakers; at that point, market penetration will accelerate rapidly, and the market will enter a period of explosive growth.

 6.Beyond Automotive: Risk Mitigation Across Multiple Scenarios

 If aluminum foam were used solely in new energy vehicles, it would be a highly cyclical sector. In reality, however, its applications extend far beyond the automotive industry.

Rail transit. Aluminum foam is an ideal material for lightweighting and noise/vibration reduction in high-speed rail flooring and subway carriages.

Defense industry. It offers distinct advantages in impact resistance and thermal insulation for lightweight protection on armored vehicles and naval vessels.

Construction. Aluminum foam is already being used at scale for noise barriers, decorative panels, and seismic-resistant structures. Some domestic companies have achieved manufacturing costs for noise barriers that are 30%–50% lower than their peers, and mass production of architectural decorative panels is essentially mature.

The significance of multi-scenario application lies in resilience: even if the new energy vehicle industry experiences short-term volatility, companies have other business lines to provide support, enhancing their ability to withstand risk. Furthermore, technical expertise gained across various scenarios can feed back into the automotive business, creating a virtuous cycle.