2025 will be a critical year for China's battery industry to undergo deep adjustments and achieve strategic transition. Its most significant feature is that against the background of stabilizing demand for new energy vehicles, the explosive growth of energy storage demand has driven the entire industry to "full production and full sales." This change, coupled with the improvement in the supply and demand structure, directly led to the re-emergence of the mismatch between supply and demand, driving the price of key materials such as lithium hexafluorophosphate to increase by more than 240% during the year, and triggered a wave of industrial chains locking in production capacity with long-term agreements.

The technical roadmap shows a pragmatic trend of "diversified competition and parallel development". Semi-solid-state batteries have started to be installed in vehicles for demonstration applications, all-solid-state batteries have entered an orderly engineering research stage, and sodium batteries have also been commercialized in specific scenarios, laying the foundation for industry changes in 2026.

In terms of policy environment, "anti-involution" has been implemented throughout the year, and policies and industries have coordinated, from regulating lithium mining to resisting low-price competition, promoting the industry's transformation from "price for volume" to "value return".

Looking forward to 2026, Veken Lithium Battery believes that a new upward cycle of lithium battery has begun, and it will usher in a comprehensive recovery and enter a profound transformation stage dominated by supply and demand rebalancing, technology-driven, policy norms and value return. It is expected that China's battery industry will show eight highlights worth looking forward to in 2026.

01Value returns, and the industry enters a "structural seller's market"

The fundamental adjustment of the supply and demand relationship is the core driving force for the industry's recovery in 2026. After experiencing the pain of overcapacity and price wars, the industry inventory cycle has bottomed out and entered a prosperous period of active inventory replenishment.

On the demand side, power batteries will benefit from the increase in the charge capacity of passenger cars and the continued increase in new scenarios, and will maintain steady growth; the energy storage market will usher in a resonance of domestic and foreign demand, driven by cost reduction, policy support, AIDC and other scenarios. On the supply side, due to the contraction of capital expenditures in the past two years and the current pressure on the profitability and cash flow conditions of lithium battery companies, the industry has a significant lack of motivation to expand production. This will push the industry from "buyer-led" to a "structural seller's market" dominated by the game of supply and demand. Key material links such as lithium iron phosphate and lithium hexafluorophosphate may be in tight supply, and prices will continue to rise.

As the value of the lithium battery industry returns, the industry's profit margin is expected to be further restored. According to statistics, in the first three quarters of 2025, the median net profit rate of 105 listed companies in Shenwan's secondary "battery" sector (after excluding 1 fuel cell company and mining company) was only 2.78%, a further decline from the same period in 2024. This means that more than half of the companies have meager profits, and revaluation and profit repair are imminent.

In 2026, the tight supply and demand situation will promote the rise of the contract processing model. The contradiction between the production capacity gap and limited production expansion of leading enterprises has intensified, while the newly entered small and medium-sized enterprises have left their production lines idle due to lack of orders. This mismatch between supply and demand will drive competition among leading companies to compete for foundries.

02 Energy storage leads the way, and scenarios explode

If new energy vehicles have dominated the battery industry in the past decade, then the key word in 2026 will be "scenario explosion", which will accelerate from unipolar drive to power + energy storage + low-altitude economy/humanoid robots and other multiple scenario resonances.

New energy vehicles are still the ballast of battery demand. The China Association of Automobile Manufacturers predicts that sales of new energy vehicles will be 19 million units in 2026, a year-on-year increase of 15.2%. The highlight of growth will come from the field of commercial vehicles, especially new energy heavy trucks. The national level has listed "promoting the large-scale application of new energy heavy trucks" as a key task in 2026, which will effectively increase the demand for batteries with higher energy density.

Energy storage will become the fastest growing field. SMM predicts that the growth rate of global energy storage battery demand is expected to reach about 50% in 2026, and its absolute increase may even exceed that of power batteries for the first time. The driving force comes from domestic capacity electricity price policies that will promote the economic inflection point of independent energy storage and new increases in AIDC distribution and storage contributions. In terms of products, 314Ah batteries are still the mainstream in China, and the replacement cycle for larger-capacity batteries is expected to start after 2027.

The two major fields of low-altitude economy and humanoid robots will gradually enter large-scale applications, and have begun to force battery technology to achieve breakthroughs in high energy density, high power and ultimate safety. Sino-Sino Aviation has established a leading advantage in this field. Its 9-series high-nickel/silicon system flight battery has an energy density of over 300Wh/kg and supports 6C fast charging. Its second-generation semi-solid large cylindrical battery has an energy density of 350Wh/kg. Its GOVY AirCab supporting GOVY AirCab has received thousands of intended orders and is scheduled to be mass-produced and delivered in the second half of 2026. It is expected to become another large-scale business case for Sino Aviation in the field of aviation-grade batteries and enhance its technological benchmark status.

03Safety dual national standards drive industrial upgrading

The implementation of multiple new battery policies in 2026 will profoundly reshape the lithium battery industry pattern from the three dimensions of safety technology, market competition and industrial chain coordination, bringing challenges and opportunities to enterprises.

"Safety Requirements for Power Batteries for Electric Vehicles" (GB38031-2025) will be implemented on July 1, 2026. For the first time, "no fire or explosion" after thermal runaway will be included in the mandatory requirements; "Safety Technical Specifications for Electric Bicycles" (GB 17761-2024) has been implemented in December 2025, clarifying the bottom line of acupuncture safety; the "Interim Measures for the Management of Recycling and Comprehensive Utilization of Waste Power Batteries for New Energy Vehicles" will be implemented on April 1, 2026, explicitly prohibiting the use of waste vehicle batteries in electric bicycles and other fields.

Under the superimposed effect of policies, industry reshuffle will be significantly accelerated. Taking the electric two-wheeled vehicle market as an example, the new national standard has completely blocked the circulation path of inferior batteries from the demand side, while the recycling ban has cleared up the source of irregular batteries from the supply side. This will directly create a huge stock replacement market, and companies with systematic security design capabilities will gain the upper hand.

For example, Phylion Power has been deeply involved in the field of light vehicle batteries for a long time, and its technical route is highly consistent with the high safety policy orientation. The company made a strong attack on January 22 and held the 2026 electric motorcycle technology new product launch conference, launching the new GT-Force high-conductivity ultra-distance technology and supporting products. Through material and structural innovation, this technology achieves a 33% increase in the overall package magnification, supports 5C discharge, has a battery life of over 100 kilometers and meets vehicle-level safety standards. The new battery product "Polaris" equipped with this technology covers a capacity of 32-50Ah and is suitable for all scenarios of 1-15 kilowatt hours; the FAR Ranger series lithium battery for electric motorcycles after PACK is launched in 74V50Ah and 100Ah super large single configurations in China. The "Ranger series" for overseas markets is adapted to global models with specifications such as "double 80" and "double 100", fully demonstrating the systematic capabilities of its technology and products with high safety, strong power, and wide adaptability.

04Solid-state batteries enter a critical stage of industrialization

2026 will be a key transition year for China's solid-state battery industry from "engineering verification" to "the eve of large-scale mass production", laying the foundation for large-scale commercialization in 2027-2030.

The policy driver is clear: at the national level, "accelerating the breakthrough of all-solid-state battery technology" has been listed as one of the key tasks in 2026, becoming the strongest baton for industrial development.

Intensive implementation of industrialization: The core signs are "pilot line verification" and "installation of the first batch of models". Many car companies such as GAC, Dongfeng, Changan, and FAW-Hongqi plan to implement prototype vehicle testing or small-volume vehicle installation verification of semi-solid or all-solid-state batteries in 2026. Battery companies such as Xinwangda completed the technological iteration from semi-solid to all-solid-state batteries in 2025. Its "Xin Bixiao" polymer all-solid-state battery has an energy density of over 400Wh/kg, a cycle life of over 1,200 weeks, and has passed the 200 degrees Celsius hot box safety test. In the future, it will continue to iteratively innovate in the direction of 520Wh/kg lithium metal super batteries.

Engineering becomes the focus: the focus of all-solid-state battery technology shifts from "material science" to "production engineering." Sulfide electrolytes are generally regarded as the mainstream technology route, but engineering bottlenecks such as chemical stability, cost, and solid-solid interface impedance remain core challenges. Industry consensus is that the large-scale application of all-solid-state batteries is expected to be between 2028 and 2030.

Equipment and processes are the first to benefit: The manufacturing of all-solid-state batteries requires the introduction of new processes such as dry electrodes, isostatic pressing, laser or pressure fusion welding, which brings pioneering opportunities to equipment companies. For example, the first dry electrode pilot line manufactured by High Energy Digital covers seven core processes and realizes one-stop production of "raw materials in → finished electrodes out", adapting to the needs of hundreds of megawatt dry electrode pilots, while supporting large-scale processing of positive electrodes, negative electrodes and electrolyte materials. The monthly production capacity can reach 24,000-30,000 square meters of electrodes; Guanhong Intelligent has achieved >30m/min in dry process High-speed, wide-width (≥500mm) double-sided composite film formation, and has assisted a customer to put into production a 0.2GWh polymer full dry production line; Carlo Verde's pressure fusion welding technology relies on its one-step method to complete over a hundred layers of metal current collectors and composite current collector welding within a hundred layers, with a yield rate higher than 99.9%. It has been tested by many leading battery companies and has been applied in mass production lines.

05 Concentration increased and the industrial chain prospered together

In 2026, the battery industry's pattern of "leadership, multi-power advancement" will become increasingly clear. The two giants CATL and BYD continue to lead the way. Second-tier companies rely on technology or market characteristics to accelerate the construction of differentiated advantages in segmented scenarios. Small and medium-sized enterprises that lack core technology and scale effects will continue to be marginalized, and industry competition will shift from "scale expansion" to "value creation."

Competition among enterprises will further escalate into a contest of industrial chain ecology. Leading companies will pay more attention to the resilience of the supply chain and lock in key resources and production capacity through long-term orders, strategic cooperation, joint ventures, and even promotion of vertical integration. A typical representative, CATL, made intensive arrangements in January 2026: it locked in a supply of 3.05 million tons of lithium iron phosphate with Rongbai Technology in the next five years, subscribed for 233 million shares of Fulin Precision Industry for 3.175 billion yuan, and agreed to purchase no less than 3 million tons of lithium iron phosphate products from it in the next three years.

06 “Anti-involution” deepens

"Anti-involution" will remain the core theme of the development of China's battery industry in 2026. This trend has deepened from initial industry initiatives to systematic policy regulation and industry self-discipline actions. The Ministry of Industry and Information Technology and other four departments jointly held an industry symposium in January 2026, and made it clear that they will standardize the competition order through measures such as strengthening cost surveys and price monitoring, strengthening production consistency inspections, and strengthening the leading role of standards, and guide the establishment of a market order with high quality, low prices, and fair competition.

Driven by both policies and markets, the clearance of low-end production capacity will be accelerated, and industry competition will usher in profound changes. Enterprises will focus more on building differentiated advantages through technological innovation, high-quality overseas expansion and the development of high value-added market segments.

The market layout of China Airlines is a typical manifestation of this trend. Among its supporting models, the entry-level market with prices below 100,000 yuan accounts for only 12.7%, while the main market with greater value space of 100,000-200,000 yuan accounts for 64.7%, and 200,000-300,000 yuan accounts for 16.9%, with active deployment in the range of 300,000-400,000 yuan and above. This reflects its differentiation strategy of avoiding the red ocean of competition and focusing on value creation.

07 Globalization from "policy dependence" to "global roots"

2026 will be a key watershed in the globalization process of China's battery industry. On January 8, the Ministry of Finance and the State Administration of Taxation jointly issued an announcement clarifying that starting from April 1, 2026, the export value-added tax rebate rate for battery products will be reduced from 9% to 6%, and will be canceled in 2027. This policy, coupled with the guidance of the Ministry of Industry and Information Technology on "reasonable, orderly and safe overseas layout", marks that the government is using its "visible hand" to force industrial upgrading and promote the industry to say goodbye to "low-price involution" and move towards high-quality development.

In this context, the overseas model of Chinese battery companies will be fundamentally restructured. The 1.0 model that simply "produces in China and sells globally" will have diminishing returns and will be replaced by the 2.0 model with "overseas construction and local operations" as its core, or even the higher-level 3.0 model of localization and ecological construction.

Generally speaking, the cancellation of tax rebate preferential treatment will directly squeeze the profits of enterprises that rely solely on price advantages for export in the short term, and may push up the demand for raw materials due to the "rush for exports". In the long term, industry differentiation will be accelerated. Leading companies that have completed or accelerated the deployment of overseas production capacity will be least affected. Their first-mover advantage will be further expanded, and ultimately a world-class battery company with truly sustainable global competitiveness will be forged.

08Sodium batteries will begin large-scale production

In 2026, sodium batteries will officially enter the large-scale production stage from the early stage of industrialization. Its core driving force lies in its outstanding resource endowment advantages and cost advantages.

In terms of market penetration path, the energy storage field will be the first market for sodium batteries to break through due to its high requirements on safety and cycle life; the automobile start-stop market needs to replace lead-acid batteries, and sodium batteries have significant low-temperature performance advantages, so they are commercially feasible; the light vehicle market such as electric two-wheelers is driven by the "new national standard" and has become a potential growth space for sodium batteries.

On the technical roadmap, the cathode materials of sodium batteries will form a tripartite structure of layered oxide, polyanionic, and Prussian blue, and the anode materials will be upgraded from hard carbon to soft carbon-hard carbon composite materials.

Leading companies such as CATL have announced that their "sodium new" batteries will be widely used in the four major fields of battery replacement, passenger cars, commercial vehicles, and energy storage in 2026. Zhongke Hainan and others have built GWh-level production lines and received batch orders. EV Lithium Energy will start the construction of its sodium energy headquarters at the end of 2025, focusing on the AIDC scenario, with a total investment of approximately 1 billion yuan and a planned annual production capacity of 2GWh.