Is small size Lipo pack capable of powering 1:10 truck/truggy? This video shows a Dual Hunter (stock 540 silver can motor) with a very small 2000mah 25C Lipo pack. Not bad at all.
However, problem will arise when you are using a more power hungry motor. We have to face the truth that smaller size battery will definitely mean lower capacity and C rating. It is just impossible to break the law of physics. As you can see from the video below, the heavy weight wild Dagger has 2 x 550 high torque motors plus a cooling fan for the ESC, so the small 3S battery is quite marginal for it. Keep in mind, using smaller battery for high power car can increase its load and shorten its lifespan. The battery will get drained faster and hotter, and will eventually fail to achieve balance between the individual cells.
