From May 13 to 15, 2026, the 18th Shenzhen International Battery Technology Exchange and Exhibition (CIBF2026) was held at the Shenzhen World Exhibition & Convention Center, spanning an exhibition area of over 280,000 square meters across 14 themed halls and attracting nearly 3,200 domestic and international companies across the battery supply chain. The scale and energy of this year‘s CIBF mirror a profound structural transformation taking place within the lithium battery industry: a decisive shift from scale-driven expansion to quality-oriented growth fueled by technological innovation.

Shifting Winds: From “Price War” to “Value War”

In his opening address, Wang Zeshen, Secretary-General of the China Industrial Association of Power Sources, urged the industry to take innovation as its anchor and pivot from a destructive price war to a value-driven competition model. His call is firmly grounded in data: in 2025, China’s total battery exports reached US$82.279billion,up22.8$76.746 billion, a 25.55% increase, reflecting a steady rise in the share of high-value products. The competitive landscape is now defined by technology, performance, and integrated solution capabilities, not merely price tags.

Solid-State Batteries: Commercialization Signals Are Clear

Solid-state battery technology was the undisputed focal point of CIBF2026. A growing consensus among industry experts and leading manufacturers points to 2026 as the inaugural year for the mass deployment of semi-solid-state batteries.

Key developments include: Dongfeng Motor Group announced that its 350 Wh/kg semi-solid-state battery will enter mass production and be installed in vehicles as early as September 2026, achieving 72% energy retention at -30°C and supporting a range of over 1,000 km. SVOLT‘s Chairman Yang Hongxin revealed that multiple vehicle models equipped with 100 kWh hybrid solid-liquid batteries will begin volume production this September, with a second-generation product that doubles safety performance expected next year. Ganfeng Lithium reported that its 400 Wh/kg solid-state battery has exceeded 1,100 cycles in lifespan, while its world-first 500 Wh/kg-class 10 Ah product has entered small-batch mass production. Gotion High-Tech launched seven new battery products, with its all-solid-state battery surpassing 400 Wh/kg in energy density and its 2 GWh production line construction progressing on schedule.

Meanwhile, CATL‘s condensed-state battery and BYD’s sulfide-based all-solid-state battery have drawn industry-wide attention, with expected CLTC ranges exceeding 1,500 km and 1,000 km, respectively. Solid-state batteries are moving from the laboratory to the production line at an unprecedented pace.

Energy Storage Boom: Dual Engines of AI Computing and Green Power

Energy storage has become the primary growth engine for lithium battery demand. In Q1 2026, energy storage battery shipments accounted for 42.86% of China’s total battery output, a sharp increase of 9.26 percentage points over 2025; total energy storage lithium battery shipments reached 225 GWh, a staggering 139% year-on-year increase. In May, China‘s monthly lithium battery production scheduling hit a record 249 GWh, with energy storage cells accounting for 42.3% — the key driver of this record output.

The driving forces behind this growth are also evolving. According to the 2026 Energy Storage White Paper published by TÜV Rheinland, China’s energy storage sector is transitioning from policy-driven growth to market-led, high-quality development. Moreover, the rapid expansion of AI foundation model training and large-scale data center construction has generated enormous demand for backup and ancillary energy storage, bringing the sector into a new growth paradigm powered by both AI computing and green electricity storage.

Raw Materials and Supply Chain: Lithium Prices Rebound

The raw materials market is also sending positive signals. As of May 8, 2026, the average market price for battery-grade lithium carbonate stood at RMB 193,300 per ton, with cumulative gains of 11.67% over the previous two weeks. LFP cathode material for power batteries was quoted at RMB 65,700 per ton, up 11.83% over the same period. Tianqi Lithium stated at its shareholder meeting on May 20 that the global lithium supply-demand balance remains in a state of dynamic tightness in 2026, characterized by sustained demand growth interspersed with periodic supply disruptions.

Upstream material companies are also accelerating innovation. At CIBF2026, Cangzhou Mingzhu showcased an ultra-thin separator measuring just 4 microns in thickness, priced at only 1/20th of equivalent imported products. International giants like Arkema and Evonik presented one-stop service capabilities spanning resin, binder, and coating — signaling that upstream material suppliers are stepping from behind the scenes to play a more visible and value-adding role in the new energy ecosystem.

Policy Support: Regulatory Framework Strengthens

On the policy front, several landmark measures took effect. On April 1, 2026, the Interim Measures for the Management of Recycling and Comprehensive Utilization of Retired Power Batteries of New Energy Vehicles, jointly issued by MIIT and five other ministries, officially came into force — the first departmental regulation in China’s power battery recycling sector, establishing a legal framework for the sustainable disposal of retired batteries. Around the same time, the National Standardization Administration approved 23 mandatory national standard projects, including the Coding Regulations of Lithium-Ion Batteries, marking a significant step forward in industry standardization.

Conclusion

The message from CIBF2026 is clear: the lithium battery industry is undergoing a transformative period where technological iteration and market expansion are amplifying each other. With solid-state batteries accelerating toward commercialization, energy storage demand surging, and AI reshaping materials R&D, the competitive landscape of the new energy sector is being thoroughly reshaped.

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After two years of price wars and industry shake-ups, the lithium battery sector is making a strong comeback. Entering the second quarter of 2026, the industry is entering a new cycle of substantial “volume and price growth” in terms of capital market performance, corporate profitability, and cutting-edge technological breakthroughs.

Market Recovery: Double Growth in Performance and Production

According to the latest financial data, the total net profit attributable to the lithium battery industry reached 46.321 billion RMB in Q1 2026, a year-on-year surge of 118%. The upstream material sector showed the greatest elasticity, with profits in copper foil and LFP cathode materials increasing over tenfold.

The core driver of this growth is energy storage. Driven by the data center construction boom and renewable energy grid integration, energy storage battery production grew 115% year-on-year in Q1 2026, becoming a key pillar of lithium demand.

Tech Frontiers: Major Breakthroughs at Tsinghua and Shandong University

The most eye-catching news recently comes from academia. Professor Zhou Guangmin’s team at Tsinghua University published new results on lithium-sulfur batteries in Nature. By combining AI with quantum chemistry, they developed a lithium-sulfur battery with an energy density of 549 Wh/kg, promising to greatly extend the endurance of drones and aviation equipment.

Meanwhile, Professor Si Pengchao’s team at Shandong University made progress in wide-temperature fast charging, developing battery technology that operates in extreme temperatures ranging from -60°C to 80°C, addressing the pain points of electric vehicles in cold and hot climates.

Supply and Outlook: Lithium Prices Remain High

On the supply side, due to factors such as the Zimbabwe mining ban and modifications to Jiangxi mines, lithium carbonate prices remain at a high level (approximately 170,000 to 180,000 RMB per ton). Although Goldman Sachs predicts lithium prices may peak in the first half of 2026, the continued explosion in energy storage demand will provide strong support.

Conclusion

The lithium battery market in 2026 has moved past low-price involution and entered a phase of high-quality development driven by energy storage demand and high-end technology. For industry players, focusing on next-generation technologies like solid-state and lithium-sulfur batteries, along with securing upstream resources, will be key to future success.

Introduction:
As we enter mid-2026, the lithium battery industry is witnessing a significant divergence driven by energy storage demand, AI power needs, and supply chain restructuring. From record-breaking production data in China to next-gen battery breakthroughs, here are the key takeaways for the week.

1. Market Momentum: Record-breaking Q1 Data
Despite being a traditional off-season, the Chinese lithium battery market saw explosive growth in Q1 2026. According to GGII, total shipments reached 525 GWh, a year-on-year increase of 67% .

• Energy Storage is the star player, with shipments growing by 139% YoY.

• Production remains high. In May 2026, production schedules among top-20 battery makers hit 249 GWh (up 6% MoM), marking three consecutive months of record highs.

2. Global Supply Chain: M&A Heats Up
Chinese battery material giant Huayou Cobalt has proposed a $210 million acquisition of Atlantic Lithium to gain control of the Ewoyaa Lithium Project in Ghana. This move highlights the ongoing trend of Chinese capital securing hard rock assets in Africa to solidify the raw material supply chain for the EV boom.

3. Technology Trends: The Race for “10C” and Solid-State
The technological landscape is evolving faster than ever:

• Extreme Fast Charging: CATL recently unveiled its 3rd Generation “Shenxing” battery, achieving an 10C charging rate (10-80% in just 3 minutes and 44 seconds). They also launched the “Qilin Condensed Battery” with an energy density of 350 Wh/kg targeting 1,500 km range.

• Future Chemistries: Researchers at Tsinghua University have developed a “molecular building block” technology to unlock the potential of Lithium-Sulfur (Li-S) batteries, which is crucial for the low-altitude economy (drones) . Meanwhile, CUHK has developed a molecular coating to enhance Lithium Metal Battery stability, a key step toward safe, high-voltage EVs.

4. Price Outlook: The “Real” Rally?
After the crash of 2022, lithium prices are finally rallying. However, unlike the last cycle, supply is not responding quickly. No major new projects have been launched since 2024, and miners are maintaining a “value over volume” strategy. Major banks like J.P. Morgan and Morgan Stanley are now forecasting a structural deficit starting in 2026.

Introduction: Cyclical Upturn Exceeding Expectations

As the first quarter of 2026 concludes, the global lithium battery industry has delivered a surprising report card. After years of cyclical adjustments, the industry has reached an inflection point leading to a “cyclical upturn”. From raw materials to cell manufacturing, key players across the supply chain have not only achieved revenue growth but also demonstrated strong profitability resilience. Based on recent research reports and the latest moves by leading companies, we believe the lithium battery industry is at the starting point of a new phase of high-quality development.

Financial Review: Q1 Results Beat Expectations, Leaders Take the Lead

In the first quarter of this year, the overall performance of the lithium battery sector exceeded market expectations. Taking industry giant CATL as an example, its Q1 2026 report showed operating revenue of 129.131 billion RMB, a year-on-year increase of 52.45%, and a net profit attributable to parent company of 20.738 billion RMB, up 48.52% year-on-year. This high growth is not an isolated case. HuaTai Securities research points out that the year-on-year net profit growth of listed companies in lithium battery sample links all exceeded 40%, with some sectors like Lithium Iron Phosphate (LFP) cathodes and electrolytes seeing growth rates exceeding 200% due to price hikes and utilization rate improvements.

Tech Frontier: The Fast-Charging and Solid-State Battery “Arms Race”

Technological innovation is the core engine driving this cyclical upturn.

Gotion High-Tech’s 5th Generation Battery: In mid-May, Gotion High-Tech is set to release its 5th generation LFP all-scenario battery at the Global Technology Conference in Hefei. This technology achieves an energy density of up to 205Wh/kg, with the super-fast charging version reaching an astonishing speed of charging from 10% to 70% in under 4.5 minutes, and a long-life version supporting 30 years of energy storage applications. This technology covers all scenarios from passenger cars and commercial vehicles to low-altitude flying vehicles, marking another breakthrough for the LFP technology route.

Solid-State/Half-Solid-State Acceleration: Beyond liquid battery upgrades, solid-state battery industrialization is accelerating. CATL’s Condensed Battery and Qingtao Energy’s semi-solid batteries have entered the vehicle installation or mass production phase, signaling that next-generation battery technology is moving from the lab to the market.

Global Supply Chain: Overseas Giants and the “White Gold” Race

Looking at the global landscape, the competition and cooperation in the lithium battery industry are equally intense.

LG Energy Solution & BMW Massive Deal: Recently, LG Energy Solution confirmed it has secured a cylindrical battery project order worth approximately 10 trillion KRW (approximately 53 billion RMB). Industry consensus suggests this order will supply BMW’s next-generation electric vehicles. This 10-year supply agreement not only locks in massive future production capacity but also solidifies the core position of cylindrical batteries (46 series) in the high-end EV market.

Lithium Resource Game Continues: Although the current price of battery-grade lithium carbonate has stabilized around 170,000 RMB/ton, a significant rebound from last year’s lows, global automakers are still racing to lock upstream resources (known as “White Gold”). GM and Ford are investing in miners or signing long-term agreements to secure supply, highlighting the strategic importance of raw material security in industry competition.

Outlook: Optimistic for the Price Hike Cycle and May Production

In the short term, production schedules for May remain strong. According to ICC data from ICC, sample battery companies show a month-on-month increase of 8.1% in production schedules for May, indicating rising demand momentum. With robust energy storage demand and high oil prices stimulating overseas electrification, the supply and demand across the lithium battery chain are becoming tight. We are optimistic about this upward cycle driven by demand recovery and new technology advancements.

Since the beginning of 2026, the lithium battery industry chain has sustained high-level growth. In April, production schedules continued to climb month-on-month, and most companies delivered strong Q1 earnings. Driven by improved supply-demand dynamics and accelerating technology iteration, the lithium battery sector is entering a new phase of synchronized demand growth and structural optimization.

1. April Production Continues to Rise — “Off-Season, Not Dull”

According to market research tracking the top 20 battery producers in China, total lithium battery production scheduling in April 2026 reached approximately 235 GWh, up 7.3% month-on-month, with energy storage cells accounting for 41.3% of the total. Data from Xindian Lithium shows that domestic sample enterprises scheduled 151.1 GWh of battery production in April, a 3.8% month-on-month increase, driving a broad uptick across midstream materials: cathode production reached 195,000 tonnes (+1.1%), anode 176,000 tonnes (+6.7%), separator 2.11 billion m² (+0.7%), and electrolyte 115,000 tonnes (+8.0%). Preliminary schedules for May project 218.8 GWh, representing year-on-year growth of 63% and month-on-month growth of 6%, signaling strong downstream demand.

2. Strong Q1 Earnings Across the Board, Energy Storage Shines as Top Growth Engine

The rising industry momentum is clearly reflected in corporate quarterly reports. CATL, the industry leader, reported Q1 2026 revenue of RMB 129.13 billion, up 52.45% year-on-year, with net profit attributable to shareholders reaching RMB 20.74 billion, up 48.52%. The company’s combined power and energy storage battery shipments exceeded 200 GWh in Q1, with the energy storage share rising noticeably to 25%. Additionally, Tianqi Lithium achieved Q1 net profit of RMB 1.876 billion, surging 1699.12% year-on-year; EVE Energy projected Q1 net profit growth of 25%–35%. According to GGII, China’s Q1 2026 energy storage lithium battery shipments totaled 215 GWh, up 139% year-on-year, firmly establishing energy storage as the fastest-growing subsegment in the lithium battery industry.

3. Policy Support Strengthens as “Anti-Cutthroat Competition” Campaign Advances

On April 9, four government departments — the Ministry of Industry and Information Technology, the National Development and Reform Commission, the State Administration for Market Regulation, and the National Energy Administration — jointly convened a symposium for power and energy storage battery enterprises. The meeting called for continued efforts in capacity warning and regulation, standardizing price competition, shortening supplier payment cycles, reinforcing product quality oversight, and cracking down on intellectual property infringement and “externalizing cutthroat competition”. The ongoing anti-cutthroat-competition drive on the supply side is expected to further improve the industry’s supply-demand balance.

4. Solid-State Battery Mass Production Accelerates, Technology Iteration Enters a New Phase

At the 2026 Beijing International Auto Show, which has just opened, solid-state batteries took center stage. CATL’s semi-solid-state Qilin Battery is scheduled for mass production in the second half of 2026, with all-solid-state batteries planned for small-batch production in 2027. BYD showcased a vehicle equipped with sulfide-based all-solid-state battery technology, achieving an energy density of 480 Wh/kg, with vehicle integration targeted for 2027. Multiple automakers including Chery, GAC, SAIC, and FAW have set their all-solid-state battery mass production milestones between 2026 and 2027. Meanwhile, sodium-ion batteries have also reached a pivotal commercialization milestone: on April 27, CATL and Hyperstrong signed a 3-year, 60 GWh sodium-ion battery strategic cooperation agreement — the single largest commercial contract of its kind globally to date — marking the official transition of sodium-ion battery technology from the verification stage into large-scale deployment.

5. Lithium Prices Rise Amid Supply Tightness; Export Compliance Enters Implementation Phase

As of April 24, domestic battery-grade lithium carbonate averaged RMB 173,100 per tonne, up 10.12% over the past two weeks. Frequent overseas mining disruptions — including Zimbabwe’s export restrictions, Australian diesel supply concerns, and permit renewals at domestic lithium mining sites in Yichun, Jiangxi — combined with sustained downstream demand, are likely to keep lithium prices elevated in the near term. On the regulatory front, the EU’s new Battery Regulation has entered full enforcement in 2026, with requirements on carbon footprint declarations, battery passports, and air transport state-of-charge limits now fully in effect. Compliance has become a critical gateway for Chinese lithium battery products entering the European market, and export-oriented enterprises should prepare proactively.

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.

Since the beginning of 2026, the lithium battery industry has maintained strong momentum, driven by surging energy storage demand, accelerated solid-state battery industrialization, and the imminent mass production of sodium-ion batteries.

Energy Storage “One Cell Hard to Find”: Supply-Demand Mismatch Drives Up Prices

The energy storage market witnessed an unprecedented boom in Q1, defying traditional off-season patterns. According to GGII data, China’s energy storage lithium battery shipments reached 215 GWh in Q1 2026, up 139% year-on-year. Leading manufacturers are running at full capacity, with orders scheduled through late 2026 or even Q2 2027. The tight supply has pushed mainstream 314Ah LFP cell prices from 0.26~0.31 RMB/Wh at end-2025 to 0.36~0.39 RMB/Wh, representing a 25%~35% increase, with some manufacturers quoting above 0.4 RMB/Wh.

This rally is driven by a fundamental shift in market demand. Domestically, energy storage has transitioned from policy-mandated deployment to market-driven adoption. Globally, BloombergNEF projects a 33% growth in stationary storage deployments in 2026, with Europe, the Middle East, and Latin America serving as key growth engines.

Lithium Carbonate Prices Fluctuate Amid Supply-Demand Tug-of-War

Lithium carbonate prices have entered a broad fluctuation phase after an early-year surge, with spot prices stabilizing around 155,000 RMB/ton and futures contracts trading between 140,000 and 170,000 RMB/ton. Compared with the same period in 2025, the price center has clearly shifted upward, indicating the industry has gradually exited the trough phase. Deutsche Bank noted that China’s lithium carbonate spot prices averaged $21,695/ton in Q1 2026, up 71% quarter-on-quarter.

Solid-State Batteries Enter Mass Production “Final Sprint”

The solid-state battery sector has seen rapid developments. On April 16, Enpower Energy officially launched its 2 GWh solid-state battery advanced manufacturing base in Anhui Province, introducing the “Enpower Rock” series for premium electric motorcycles and battery-swapping applications. GAC’s incubated company Greater Bay Technology announced the successful production of its all-solid-state battery A-sample cells, targeting GWh-level mass production within 2026 with energy density reaching 260-500 Wh/kg.

In capital markets, Qingtao Energy submitted its Hong Kong IPO application in April, aiming to become the world’s first listed solid-state battery company with a valuation of 27.9 billion RMB. Industry consensus points to 2027 as the concentrated period for small-scale vehicle validation of all-solid-state batteries, with large-scale commercialization expected around 2030.

CATL and BYD in Technological “Showdown”

On April 21, CATL unveiled five new battery products across its entire chemical portfolio along with a comprehensive charging network solution at its “Super Tech Day” event. The third-generation Shenxing ultra-fast charging battery achieves 10% to 98% charge in just 6 minutes and 27 seconds; the third-generation Kirin battery exceeds 1,000 km range; and the Kirin Condensed battery brings aerospace battery technology to passenger vehicles for the first time, achieving up to 1,500 km range. CATL also announced that sodium-ion batteries will enter mass production in Q4 2026, having overcome four major industry bottlenecks.

Earlier in March, BYD launched its second-generation Blade Battery with flash-charging technology, achieving 10% to 97% charge in 9 minutes at room temperature and maximum range of 1,036 km, with plans to deploy 20,000 flash-charging stations by year-end.

Sodium-Ion Battery Era Accelerates Under Policy and Demand Tailwinds

High lithium prices have accelerated the shift toward sodium-based alternatives. CATL plans large-scale sodium battery deployment across battery swapping, passenger vehicles, commercial vehicles, and energy storage. BYD’s third-generation sodium battery has completed small-batch trial production for entry-level EVs and energy storage applications. Industry forecasts project global sodium battery installations exceeding 50 GWh in 2026, marking the beginning of a new “sodium-lithium parallel” energy paradigm.

Outlook

The lithium battery industry is currently in a “strong supply and demand” cycle. Robust energy storage growth, accelerating commercialization of solid-state and sodium-ion technologies, and consistent performance validation from leading companies provide solid fundamental support. Meanwhile, external factors such as export tax rebate policy adjustments, raw material price volatility, and geopolitical risks warrant close attention. Against the backdrop of global energy transition, the long-term prospects for the lithium battery industry remain highly promising.

Following a high-level joint symposium by four Chinese ministries in early April, the lithium battery industry is officially transitioning from disorderly expansion into a phase of high-quality development.

Policy “Combo” Reshapes the Landscape

On April 9, 2026, authorities explicitly called for resolute resistance against unfair competition. This “anti-involution” policy has quickly improved supply-demand dynamics. Consequently, the A-share lithium battery sector surged on April 10, with giants like CATL leading the rally as the ChiNext Index hit four-year highs.

The Shift: Energy Storage Takes the Baton

As EV market growth slows, Energy Storage Systems (ESS) have become the new growth engine. Giants like LG Energy Solution and SK On are retrofitting EV lines to produce LFP batteries for ESS, driven by demand from the North American grid and AI data centers.

In China, Eve Energy announced expansions totaling over 230GWh. Data shows that in Q1 2026, ESS battery sales surged over 110% YoY, far exceeding EV battery growth. ESS is moving from “sidekick” to “protagonist”.

Tech Breakthroughs & Outlook

To support extreme fast charging (EFC), Yuanchi New Energy released a 4.8V high-voltage LNMO battery, offering a “third answer” beyond LFP and NCM for 1000V architectures.

Meanwhile, with global lithium supply tightening and prices rebounding from lows, analysts predict over 60% growth in global ESS installations in 2026. The industry’s prosperity is clearly rebounding.

Conclusion: 2026 marks a watershed moment where quality trumps quantity. The competition is shifting from low-price bidding to technological innovation and capturing the high-margin energy storage market.

Executive Summary

As Q2 2026 unfolds, the lithium battery sector is at a pivotal juncture. Lithium prices are rebounding sharply with a clear supply deficit forecasted. Energy storage demand is overtaking EVs as the primary growth driver, while solid-state and sodium-ion battery technologies approach mass production milestones.

1. Lithium Price & Supply: The Turning Point

Battery-grade lithium carbonate prices have surged over 90% from last year’s lows. Morgan Stanley forecasts a global supply deficit of ~100k tons in H2 2026. Supply growth is constrained by mine suspensions and export controls, while demand is skyrocketing due to the global ESS boom. With inventories below one month’s demand, upward price pressure is significant.

2. Demand Engine: Energy Storage Takes the Lead

Energy storage cell shipments are projected to grow over 70% in 2026. Top-tier manufacturers are running at full capacity with extended

4. Sodium-Ion Batteries: Safety Breakthrough & Commercialization

Researchers at CAS achieved a major breakthrough in “thermal runaway-free” sodium-ionlead times. Driven by grid stability needs and AI data center backup, major players like EVE Energy are executing multi-billion dollar expansion plans. Meanwhile, export volume rose 63%, though average prices declined, signaling intensified competition.

3. Solid-State Batteries: Mass Production Window Opens

China’s MIIT white paper confirms the industry has entered the phase of scaled semi-solid production and all-solid-state pilot validation. Production lines from Qingtao Energy and GAC Aion are operational. Automakers like Chery and Geely aim for vehicle validation of all-solid-state batteries by late 2026/2027. Stricter safety regulations effective July 2026 will further accelerate the adoption of safer solid-state chemistries. cells. CATL’s “NaXin” brand is set for mass production this year, partnering with automakers like Changan. Cost parity with LFP batteries is expected by 2027, marking a key commercial inflection point.

5. Policy Shifts: Phase-out of Subsidies, Tighter Recycling

Export tax rebates for batteries are being further reduced starting April 2026, pushing the industry away from low-price competition. New recycling regulations mandate “Digital IDs” and integrated vehicle-battery scrapping protocols, effectively squeezing out informal recyclers and benefiting compliant, large-scale enterprises.

Outlook

The industry is pivoting from rapid expansion to high-quality development. Rising material costs and stricter policies test corporate resilience, while the ESS boom and technological iteration offer new avenues for differentiation. A multi-technology approach and closed-loop lifecycle management will define the future landscape.