Automakers are dispatching personnel to battery plants to "secure cells," with XPeng's CEO He Xiaopeng candidly stating he has "drunk with all the battery manufacturers' bosses." An investigation into the year-end "battery shortage" for carmakers reveals that power battery supply tightness has eased, while energy storage batteries remain scarce.
"Our popular models are experiencing slow deliveries because we are waiting for batteries from CATL," an insider from a new energy vehicle company recently disclosed.
It is understood that due to tight supply from first and second-tier battery manufacturers, from September to November 2025, some automakers sent personnel directly to battery companies to "compete for batteries."
Industry insiders indicate that this round of tight supply is primarily driven by robust demand and constrained supply, particularly due to the rapid expansion of the energy storage battery market, where production schedules remain at high levels. By the end of 2025, the supply tightness for power batteries had already eased; however, shortages in energy storage batteries are expected to persist, with "first and second-tier energy storage cell manufacturers operating at full capacity with strong sales."
Influenced by multiple factors, a chain reaction has formed throughout the lithium battery industry chain, with cathode materials, anode materials, wet-process separators, and copper foil all experiencing price increases or facing expectations of hikes.
Battery supply shortages have led to delayed vehicle deliveries, although the year-end tightness has already eased.
"In the last week or two, I have had drinks with the bosses of all our battery suppliers!" This remark from He Xiaopeng, Chairman of XPeng Motors, on the evening of November 6th, reflects the tense situation in power battery supply.
It has been learned that affected by insufficient battery supply, deliveries for several new energy models have been slow, and production ramp-up speeds have been difficult to increase, impacting models such as the Li Auto i6, the new NIO ES8, and the 2026 AITO M7.
Among these, a representative from Li Auto confirmed to reporters, "The delivery of the i6 has indeed been slowed due to battery delivery issues."
In November, rumors suggested that purchasing personnel from several automakers gathered at the sales office of CATL's headquarters to "secure the door" and lock in battery capacity. CATL has not commented on these reports.
However, a researcher from an institute, Ms. Huang, confirmed that from September to November this year, there were indeed instances of automakers "scrambling for batteries," and this was not limited to CATL. "CATL's capacity tightness is certainly the most severe, but other companies with high-quality cells, such as Eve Energy Co., Ltd., also have order books filled to capacity."
It has been noted that since the second half of 2025, multiple automakers have signed cooperation agreements with CATL, with collaboration periods lasting 5 or 10 years.
In July, CATL reached a deepened strategic cooperation agreement with Geely Automobile; in September, it signed a 5-year comprehensive strategic cooperation agreement with Li Auto; in October, it established a 5-year long-term strategic cooperation with Dongfeng Commercial Vehicle and signed a long-term strategic agreement with JAC Group; in November, it signed a 10-year strategic cooperation with GAC Group; and in December, it signed a 10-year deepened cooperation agreement with VOYAH.
In these collaborations, "supply chain" was repeatedly emphasized. JAC Group and VOYAH specifically stated the need for "more stable supply" and to "reduce risks such as supply chain tension and delivery delays caused by industry fluctuations."
Mr. Li, an professional in the new energy industry, stated that the traditional peak season for the auto market occurs annually around "September and October." Combined with subsidies available until the last month and the anticipated reduction of the purchase tax exemption in 2026, automakers are preparing for year-end sales pushes and pre-Chinese New Year inventory building, leading to increased demand for power batteries.
However, Ms. Huang noted that by the end of 2025, the tight supply situation for power batteries had eased. "The first quarter is a low season for the auto market. Before the Spring Festival, automakers focus mainly on clearing inventory. After meeting the demand for the year-end sales push, their procurement demand for power batteries will contract. Particularly for second-tier battery companies, power battery production schedules for January 2026 have generally been adjusted downward."
Regarding power battery prices for the coming year, a professional from the battery industry indicated that prices may not necessarily rise across the board in 2026. "Automakers will still face intense price competition and significant cost pressures in 2026. When negotiating with less dominant battery manufacturers, they will demand price reductions. Battery manufacturers are also unwilling to fully absorb the costs of rising raw material prices."
Compared to power batteries, the shortage of energy storage batteries is more severe.
On December 25th, the board secretary's office of Sunwoda Electronic Co., Ltd. stated, "The phenomenon of customers 'scrambling for batteries' is more common in the energy storage battery sector. Power battery customers typically have dedicated production lines, so there isn't competition for capacity."
Ms. Huang expressed that whether the supply-demand imbalance for energy storage batteries will ease remains to be seen around April 2026. "First and second-tier energy storage cell manufacturers are operating at full capacity with strong sales, some even needing to seek OEM production. Currently, some customers placing orders for energy storage cells even need to pay deposits, with delivery timelines extending to April next year."
Furthermore, according to DD时代智库, most battery companies currently have energy storage orders scheduled until the end of the first quarter of 2026. Companies focused on the energy storage track are still operating at full capacity, with orders for large-scale storage products scheduled into the first half of 2026, and energy storage cell prices continuing to rise.
A representative from ternary lithium cathode leader Ronbay Technology believes that policy announcements have also stimulated market expectations for energy storage batteries. Early in 2025, the National Development and Reform Commission clearly abolished the "mandatory energy storage allocation" requirement, marking the entry of independent energy storage into a new phase of rapid development.
The NDRC also set a target for China's new-type energy storage installed capacity to reach over 180 million kilowatts by 2027, driving approximately 250 billion yuan in direct project investment.
Recently, CALB predicted at a partner conference that global battery demand will exceed 2.5 TWh in 2026, with energy storage demand expected to reach 1 TWh, representing a projected year-on-year increase of over 60%.
Against this backdrop, the energy storage business has become a second growth curve for battery companies.
In the first half of 2025, CATL's energy storage battery system revenue reached 28.4 billion yuan, accounting for nearly 16% of total revenue, with a gross margin of 25.52%; Eve Energy's energy storage battery revenue reached 10.298 billion yuan, accounting for 36.56% of total revenue, with a gross margin of 12.03%; Gotion High-tech's energy storage battery system revenue reached 4.56 billion yuan, accounting for 23.5% of total revenue, with a gross margin of 19.35%.
Leading automakers are also vigorously developing their energy storage businesses. In the first half of 2025, BYD ranked third globally in energy storage system shipments and fifth in energy storage cell shipments.
Supply and demand dynamics are driving price increases across the entire lithium battery industry chain, with some company stock prices surging over 600% year-to-date.
Looking upstream at the supply side, multiple lithium battery industry professionals indicated that besides strong demand, raw material supply is another reason for the capacity tightness at first and second-tier battery companies.
The representative from Ronbay Technology added that lithium iron phosphate batteries are experiencing high growth, with large cells and long cycle life energy storage being the development trend, which places higher demands on material performance. A representative from Sinomine Resource Group noted that some lithium mines closed during the previous round of production cuts have not yet resumed operations.
In the second half of this year, lithium carbonate futures prices continued to rise. On December 25th, prices exceeded 120,000 yuan per ton, more than doubling from the low in July with an increase exceeding 100%; spot prices exceeded 110,000 yuan per ton, rising over 80% from the year's low of 60,000 yuan per ton.
This has triggered a chain reaction, leading to price increases across the entire lithium battery industry chain. Investigations reveal that cathode and anode materials, wet-process separators, copper foil, and key additives are all experiencing price hikes or face expectations of increases.
An insider from lithium salt producer Yahua Industrial Group stated that the company's product pricing follows a formula, with some price factors linked to third-party website quotes and others to futures prices, hence the current upward trend. "Currently, most long-term supply agreements in the lithium industry lock in volume but not price."
Anode material leader BTR New Material Group stated, "The general trend of price increases is recognized by everyone, as raw material costs are rising, increasing product costs. BTR is striving for price increases, but it's unclear whether specific hikes have been implemented yet."
Furthermore, high demand has also led to increases in processing fees.
On December 1st, cathode material supplier Hunan Yuneng New Energy Technology announced that, effective January 1st, 2026, the processing fee for all its lithium phosphate products would increase by 3,000 yuan per ton.
The board secretary's office of copper foil leader Nuode Investment Co., Ltd. stated, "The pricing strategy for copper foil is the current copper price plus the processing fee. Factors affecting the processing fee mainly include supply and demand, as well as the technical difficulty and loss rate of the entire product. With demand rising significantly now, the processing fee has also increased somewhat."
The board secretary's office of lithium iron phosphate cathode supplier Lopal Tech Co., Ltd. said, "Our profit mainly comes from the processing fee. The processing fee is generally negotiated with customers. There is indeed talk within the industry about processing fee increases, and we are actively negotiating with customers."
Downstream battery companies have subsequently raised their prices. On December 9th, Suzhou Dejia Energy Technology Co., Ltd. announced that, effective December 16th, battery product selling prices would increase by 15% based on the current catalog price.
On December 24th, the board secretary's office of Farasis Energy (Gan Zhou) Co., Ltd. stated, "On a macro level, battery prices have indeed increased because raw material costs have risen; you certainly have to raise prices accordingly."
Gotion High-tech also stated that its quotations fluctuate with market changes and supply chain dynamics, and will be reasonably adjusted based on increases in raw material costs.
Stocks related to the lithium battery industry chain have also seen significant price increases. As of December 31st, shares of Tianqi Lithium Industries, Inc., Ganfeng Lithium Group Co., Ltd., and Chengxin Lithium Group Co., Ltd. had all risen over 100% from their April lows. Within the upstream industry chain, shares of Jiangxi Tiangong Technology Co., Ltd. had surged over 600% from their yearly low, while Shenzhen Huasheng Lithium Co., Ltd. saw gains exceeding 500%.
(This article does not constitute investment advice. Operate at your own risk based on this information.)
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