According to Xincuo data, global energy storage battery shipments reached 640 GWh in 2025, a year-on-year increase of 82.9%. Domestic battery manufacturers shipped 621.5 GWh, up 82.8% year-on-year, while overseas battery manufacturers shipped 18.5 GWh, surging 85% year-on-year. Beginning in June 2025, a tight supply-demand balance for domestic energy storage cells initiated a price increase cycle, and since September, prices for materials like lithium hexafluorophosphate and lithium carbonate have started to climb. This trend of countering excessive competition is inevitable; the lithium battery materials sector has experienced weak performance and high debt-to-asset ratios in recent years. Compared to the continuously growing demand, the supply in the materials industry is relatively inelastic, highlighting the potential for non-linear profit growth among leading materials companies. GTHT's main views are as follows:
New energy vehicles are expanding steadily, while energy storage is experiencing explosive growth. 1) New Energy Vehicles: According to EVTank data, global sales of new energy vehicles reached 23.542 million units in 2025, a 29.1% year-on-year increase. China accounted for 70.3% of global sales, while Europe and the US sold 3.77 million and 1.6 million units, up 30.5% and 1.72% year-on-year, respectively. 2) Energy Storage: Xincuo data shows global energy storage battery shipments hit 640 GWh in 2025, growing 82.9% year-on-year. Domestic manufacturers shipped 621.5 GWh (up 82.8% YoY), and overseas manufacturers shipped 18.5 GWh (up 85% YoY).
Looking ahead to 2026, EVTank forecasts global new energy vehicle sales will reach 28.496 million units, increasing over 20% year-on-year. Xincuo Lithium Battery estimates energy storage battery shipments could reach 1,090 GWh, a 70% year-on-year increase.
Cell prices have risen first, underscoring the potential for non-linear profit growth in lithium battery materials. Faced with rapidly growing demand, the lithium battery industry is seeing an improvement in its supply-demand dynamics. Since 2025, battery companies like CATL have embarked on capacity expansion. Due to previous cyclical overcapacity, the materials segment endured a prolonged profit downturn, leading to deteriorating financial statements and high debt-to-asset ratios. Compared to the battery sector, lithium battery materials may face greater pressure on capital turnover and debt repayment during new capacity releases, making supply relatively inelastic. Starting June 2025, tight supply and demand for domestic energy storage cells triggered a price hike cycle, and material prices, including lithium hexafluorophosphate and lithium carbonate, have increased since September. GTHT believes the fundamental logic behind price increases is supply and demand; whoever dominates this dynamic holds the advantage. Strong downstream demand for cells allows price increases to be passed on to end customers; robust demand in the materials segment enhances profitability.
The 2026 demand cycle is expected to begin, with domestic and international policies further strengthening demand prospects. In 2026, domestic trade-in policies will continue, China and Europe have reached a consensus on electric vehicle trade, and Germany has reinstated EV purchase subsidies, providing continuous positive momentum for the auto market. According to incomplete CESA statistics, Chinese companies secured new overseas energy storage orders and partnerships totaling 353 GWh in 2025, a 94% year-on-year increase. From January to November 2025, new bidding volume for domestic new-type energy storage exceeded 400 GWh, up 75% year-on-year; demand across multiple regions is expected to surge simultaneously in 2026. In January 2026, the Ministry of Finance and the State Taxation Administration updated export tax rebate policies, announcing the cancellation of VAT export rebates for battery products starting in 2027, which may pull forward overseas new energy demand. The lithium battery industry is currently in a traditional off-season for end-demand, but as the peak season approaches, the demand cycle and inventory cycle are expected to resonate.
Investment recommendations favor the inevitable trend of countering excessive competition. Given the lithium battery materials sector's recent weak performance and high debt levels, coupled with relatively inelastic supply versus growing demand, investors should focus on the potential for non-linear profit growth among leading materials companies. Strategically, the advice is to prioritize "lithium" first, then "heavy assets": Lithium-related—lithium iron phosphate, lithium carbonate, lithium hexafluorophosphate, aluminum foil (benefiting from lithium-sodium battery cost convergence); Heavy asset-related—separators. Recommended stocks: Shenghuo Lithium Group (002240.SZ); Related stocks: Hunan Yuneng (301358.SZ), Tinci Materials (002709.SZ), Dingsheng New Materials (603876.SH), Enjie Co., Ltd. (002812.SZ), Senior Technology (300568.SZ), Foshan Plastics Technology (000973.SZ), etc. The report is also optimistic about battery leaders with strong supply-demand dynamics and pricing power, recommending: CATL (300750.SZ), EVE Energy Co., Ltd. (300014.SZ), and Gotion High-tech (002074.SZ).
Risk factors include new energy vehicle demand falling short of expectations and energy storage demand underperforming forecasts.
Comments