Lithium Battery Industry Rebounds: 139% Storage Surge and Lithium Price Doubling in Q1 2026

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1. Market & Prices: Broad-Based Recovery

  • Energy storage demand surges: According to GGII, China‘s energy storage lithium battery shipments reached 215 GWh in Q1 2026, up 139% YoY. Leading manufacturers are operating at near-full capacity, with order backlogs generally extending to late 2026 or even Q2 2027. The industry is witnessing an unprecedented “cash in hand but no cells available” situation.

  • Lithium carbonate prices double: Battery-grade lithium carbonate rebounded sharply from a historical low of RMB 75,000/MT in late 2024, doubling to RMB 150,000–160,000/MT by Q2 2026. Spot prices stood at RMB 155,000/MT as of April 10.

  • Cell prices rise in tandem: Mainstream 314Ah LFP cell prices climbed from RMB 0.26–0.31/Wh at the end of 2025 to RMB 0.36–0.39/Wh, with some Tier-1 suppliers quoting above RMB 0.40/Wh — an increase of 25%–35%.

  • Production schedules continue to climb: China’s lithium battery market production schedule is estimated at approximately 235 GWh in April 2026, up 7.3% MoM, with energy storage cells accounting for 41.3% of the total.

2. Leading Enterprise Updates

  • CATL dominates: Q1 2026 revenue reached RMB 129.13 billion（+52.45% YoY); net profit RMB 20.74 billion（+48.52% YoY); combined power and energy storage battery sales exceeded 200 GWh, with storage share rising to 25%. CATL held a 45.2% share of the global EV battery market with 32.5 GWh installed. On April 21, CATL held its “Super Technology Day,” unveiling multiple new products including the 3rd-gen Shenxing ultra-fast charging battery and Qilin condensed-state battery.

  • BYD advances globally: Added over 70 GWh of new capacity in 2026, bringing total to over 300 GWh. Q1 NEV exports surged 51.5% YoY. Signed a 2.6 GWh energy storage order in Chile.

  • CALB accelerates: Completed a vehicle-grade all-solid-state battery production line, with plans for batch delivery at the thousand-unit scale in Q4 2026. Q1 installed capacity achieved positive growth, ranking the fastest among the Top 10.

  • EVE Energy: Expected to commence batch delivery of new sodium-ion batteries for energy storage and light power applications by end-2026. In solid-state, launched “Longquan III” and “Longquan IV” products in March 2026, with small-volume production expected in 2027.

3. Policy & Export: EU Battery Regulation Rolls On

  • EU Battery Booster Strategy: The European Commission launched the Battery Booster Strategy, covering the entire value chain from raw materials to cell manufacturing and recycling, aiming to reshape the EU’s battery industry landscape.

  • Battery passport requirement: From February 18, 2027, rechargeable industrial and EV batteries above 2 kWh entering the EU market must carry a digital battery passport, documenting material composition, carbon footprint, and supply chain information.

  • New battery waste codes: The EU has updated its List of Waste codes for batteries, mandatory from November 9, 2026, strengthening identification and traceability of cross-border battery waste shipments. Black mass is classified as hazardous waste, with exports to non-OECD countries restricted.

  • China export tax rebate adjustment: From April 1, 2026, the VAT export rebate rate for battery products was reduced from 9% to 6%, with full cancellation scheduled for 2027 — aimed at curbing cut-throat price competition and promoting high-quality development.

4. Technology Frontiers: “Mass Production Inaugural Year” for Solid-State and Sodium-Ion Batteries

  • Solid-state batteries race toward mass production: 2026 is widely seen as a pivotal year for solid-state battery commercialization. CATL’s sulfide-based all-solid-state battery surpassed 500 Wh/kg; CALB completed a vehicle-grade all-solid-state production line; BYD commissioned a 20 GWh solid-state battery line in Chongqing. The industry expects small-scale mass production and vehicle demonstration to begin between 2026 and 2027.

  • Sodium-ion batteries accelerate toward deployment: CATL’s “NaXin” sodium-ion battery will enter mass production this year, with cell energy density reaching 175 Wh/kg, supporting BEV range of over 400 km. Global sodium battery shipments reached 9 GWh in 2025, up 150% YoY. A Chinese Academy of Sciences team developed a “zero thermal runaway” sodium-ion battery that passed nail-penetration and 300°C hot-box tests, with findings published in Nature Energy.

5. Industry Outlook

  • Demand structure continues to optimize: China’s energy storage market is shifting from mandatory installation quotas to electricity market-driven growth. Capacity compensation mechanisms in Inner Mongolia and price volatility in spot electricity markets are providing higher, more stable returns for storage projects. Storage is transforming from a “cost burden” into the “value hub” of power systems.

  • Global expansion accelerates: Chinese battery leaders are speeding up overseas factory construction, with bases in Europe and Southeast Asia coming online and the share of overseas new capacity steadily rising. Chinese companies are making intensive breakthroughs in overseas storage markets, with CALB among others announcing nearly 1 GWh of overseas orders in a single day.

  • Tight supply-demand balance continues: UBS forecasts 14% lithium demand growth in 2026, with a supply deficit expected to persist through 2027. Leading manufacturers‘ capacity utilization rates have rebounded to around 90%, returning the market to a tight balance.

Data sources: GGII, SNE Research, SMM, InfoLink, East Money, China Automotive Power Battery Industry Innovation Alliance, and other publicly available information.