Before he can get to Pastoria City, Ash has to battle a slang-talking Trainer named Sho. Sho wants to collect a Pikachu evolution set and he already has Raichu and Pichu, so he has his eye on Ash's Pikachu—but Ash isn't about to trade. Instead, they have a battle: Sho's Raichu vs. Ash's Pikachu. Raichu isn't afraid to go head-to-head with Pikachu, and it also knows Hyper Beam, a move that Pikachu can't learn unless it evolves. Not only does Raichu beat Pikachu, Paul drops by just long enough to sneer at Ash for not having evolved his Pikachu.
While Pikachu gets some serious rest and recuperation at the nearest Pokémon Center, Ash takes out the Thunderstone he received in Vermilion City. Back at the Vermilion Gym, Lt. Surge's Raichu beat Pikachu and forced it to consider whether it wanted to evolve; even though Pikachu decided to remain a Pikachu, what if it's changed its mind since then? Team Rocket saw the whole thing unfold and they still think Pikachu should stay the same, so they swipe the Thunderstone when no one is looking.
It's just as well, since Pikachu decides to beat Raichu itself. After some special training, it's time for a rematch. Instead of relying on raw power, Ash has Pikachu use strategic moves and spinning tricks to beat Raichu. Sho admits that Ash's Pikachu is pretty good—but if they ever meet again, the result will be different!
While the group is eating lunch, Piplup accidentally knocks a piece of food out of Pikachu's paw with its flailing arms. Disgruntled, both Pokémon run after the food. It stops rolling, and a Pichu eats it right in front of the duo. Pichu calls for its Trainer, a boy named Sho, who is particularly excited to see what he thinks is a wild Pikachu. Ash and the others run over to find Pikachu and Piplup, but Sho orders them to keep away from his catch. He calls on his Raichu, and orders an Iron Tail attack. Ash counters Raichu's attack with an Iron Tail of his own, and both sides prove evenly matched. Sho realizes that Pikachu isn't wild, so he offers up a few Pokémon to trade; namely a Mareep, Magnemite, and Magneton. Ash sternly turns down the offers. Brock is curious as to why he wants Pikachu so badly, to which Sho replies that he wants a full-power evolution set.
Ash suggests he should evolve his Pichu, but Sho cannot be bothered looking for another Pichu. Ash decides to challenge Sho to a battle – his Raichu against Pikachu. Sho accepts on the terms that if he wins, Pikachu was his. However, Ash declines that offer. Still, the two Trainers agree to battle each other in test of strengths. Pikachu starts the match off with a Thunderbolt. Raichu takes the electricity and is completely unfazed. Sho mocks Pikachu's power, and replies with Thunder. Pikachu also takes the attack, then launches Volt Tackle; however, Raichu also knows this move and uses it as well. Both of the Volt Tackles collide, creating an explosion. Raichu safely lands on its feet, but Pikachu slams into a rock and struggles to stand back up. Both Pokémon then exchange Iron Tails, skidding backwards as a result. Ash assumes Raichu would be beaten with speed, so Pikachu charges ahead with Quick Attack. Despite the direct hit, Raichu is not harmed. Sho decides to finish things up with a Hyper Beam. Pikachu prepares to dodge, but Raichu pins him to a nearby rock with its tail. Raichu charges up its Hyper Beam attack and hits Pikachu at point-blank range. Sho calls it a win as Pikachu faints from exhaustion. Ash, concerned, runs over to Pikachu and comforts him. Sho again offers to trade, but walks off after Ash refuses.
Unexpectedly, Paul arrives and tells Ash that he was pathetic. Ash remains optimistic, but Paul suggests he evolve Pikachu to even come close to being an equal to Raichu. Just as quickly as he appeared, he leaves again. Brock then states that it's true that Pikachu can't learn Hyper Beam without evolving. Dawn then says that Pikachu can't evolve without a Thunder Stone.
Before Pikachu can say anything, he passes out in Ash's arms. Pikachu is immediately taken to a Pokémon Center, where he is hooked up to a electrocardiograph to check its pulse and heart rate. Team Rocket is seen outside, looking into the hospital room sadly as Pikachu's health began to deteriorate. Upon having flashbacks of his life, Pikachu's pulse and heart rates begin to plummet, so Nurse Joy uses the defibrillator and Chansey sets it for 200 volts. It was ineffective, so Nurse Joy calls for 300 volts instead. After three more tries, Pikachu's heart and pulse rates return to normal range, much to everyone's relief.
Later that afternoon, Pikachu wakes up to Ash and the others standing over him. He tries to rush off to get Raichu, but Ash puts him back in the bed, saying that he needs to rest. Then, Ash takes out a Thunder Stone, and explains that he has kept hold of it ever since he received from Nurse Joy in Vermilion City. As Pikachu still seems hurt, the group leaves the room after Ash places the Thunder Stone on the table next to the window. Outside, Team Rocket contemplate Pikachu evolving into Raichu. Jessie says that it wouldn't feel right, and Meowth is strongly against it, as he is proud not to evolve himself. Later that night, Pikachu glares angrily at the Thunder Stone, quickly turning away from it.
Ash and the others enter the ward room to find both Pikachu and the Thunder Stone missing. The group go off looking for Pikachu in the surrounding forest. A jolt of electricity in the night sky is seen and Ash runs off in that direction. Ash then sees his Pikachu, practicing Volt Tackle on a rock and breaking it. Ash runs over, happy that Pikachu has decided to not evolve after all. His friends are equally relieved. Team Rocket make an unexpected appearance, and with the Thunder Stone in hand, implying that they planned to sell it before running off.
The very next day, Ash and Pikachu get straight into special training to prepare him for a rematch against Sho's Raichu. A jolt of electricity bursts from out of the trees, interrupting the training. Ash quickly runs over, noticing that it was Raichu's Thunder. Ash immediately challenges Sho to another battle. Sho remarks that it would end the same, but agrees to a rematch. He lets out his Pichu to watch the battle unfold. Right before the battle starts, Pikachu taunts Sho and his Raichu, ordering them to go first. Angrily, Sho calls for Raichu to use Iron Tail. Ash's Pikachu puts his training into practice and spins to dodge it. Again, Raichu uses Iron Tail. However, Pikachu spins around on the ground, dodging several blows. Finally, one of Raichu's Iron Tails hits Pikachu before tossing him into the air. With Pikachu freefalling, Raichu charges forward with a Volt Tackle. Pikachu counters with an Iron Tail, landing safely on the ground. Raichu comes at Pikachu with another Volt Tackle, though Pikachu using his spinning technique to evade it and the follow up Iron Tail onslaught. With Raichu now tired, Pikachu retaliates with a Quick Attack which pushes Raichu back. Raichu comes back with an Iron Tail, though Pikachu leaps overhead and lands a blow with his own Iron Tail. Raichu unleashes a Thunder attack, but Pikachu speeds by and uses Volt Tackle. Raichu takes the hit and quickly stands to its feet. Sho then orders a Hyper Beam, and Raichu again pins Pikachu to a tree with its tail. Pikachu counters with a Thunderbolt, cutting the damage sustained in half. With Raichu needing time to recover, Pikachu slams it with a Volt Tackle and Iron Tail combo. Raichu sustains the blow and rushes in for another Volt Tackle.
Raichu is still able to get to its feet, and counters with Volt Tackle. Pikachu also uses Volt Tackle, resulting in an explosive clash. With both sides proving evenly matched, Sho calls for an Iron Tail. Pikachu returns the favour, adding a spin to his attack to toss Raichu into a tree. Raichu recovers and then replies with a Hyper Beam again, but its tail misses Pikachu. Ash's Pikachu then uses the energy from the Hyper Beam to jump into the air and begins to spin while readying an Iron Tail attack. Pikachu slams directly into Raichu to win the match. Dawn is pleased to see her spinning technique could be adapted to Ash's advantage. Team Rocket, who have been watching the match, celebrate Pikachu's latest victory and renew their aims to steal him. Paul, on the other hand, is unimpressed and simply walks off. Afterwards, Sho finally recognizes Ash's strength and promises to give him a great battle the next time they meet.