Looking ahead to 2026, the demand growth rate for lithium carbonate in the new energy vehicle sector is still expected to maintain above 20% due to the continuous increase in the battery capacity of each vehicle.
Since mid-June, the futures price of lithium carbonate has continued to rise, breaking through 100,000 RMB/ton at its peak, with a cumulative increase of more than 30%. In the author's opinion, the core driver of this round of lithium carbonate price increase stems from the unexpected growth in demand. The market supply and demand pattern has shifted from surplus at the beginning of the year to balance, and it is expected to continue to maintain a tight balance in 2026.
The resilience of demand for new energy vehicles is highlighted
Despite the expected decline in subsidies for new energy vehicles in 2026, orders for lithium-ion battery cells remain strong. According to the China Association of Automobile Manufacturers, in October, the production and sales of new energy vehicles continued to grow rapidly, with new energy vehicle sales accounting for more than 50% of total car sales; production and sales that month reached 1.772 million and 1.715 million units, respectively, representing year-on-year increases of 21.1% and 20%. From January to October 2025, the cumulative production of new energy vehicles was 12.992 million units, a year-on-year increase of 33%, and the full-year production is expected to exceed 16.8 million units, with a year-on-year growth rate of over 30%.
The output of power cells has increased synchronously, entering a sustained growth channel from August. In October, the output of power cells reached 124.87GWh, a 10.9% increase compared to the previous month. It is expected that the month-on-month increase in November will still exceed 5%. From January to October, the cumulative output was 985.9GWh, a year-on-year increase of 44%. It is expected that the full-year output will exceed 1250GWh, with a year-on-year growth rate of over 43%. Looking ahead to 2026, benefiting from the continuous increase in the amount of electricity per vehicle, the demand growth rate for lithium carbonate in the new energy vehicle sector is still expected to maintain above 20%.
The industry of energy storage batteries is still very prosperous.
At the beginning of this year, the National Development and Reform Commission and the National Energy Administration jointly issued the "Notice on Deepening the Market-oriented Reform of the New Energy Feed-in Tariff and Promoting the High-quality Development of New Energy", marking the official transition of China's new energy tariff policy from government pricing to full marketization, and at the same time canceling the mandatory energy storage requirement for new energy power generation projects that has been in effect for 8 years. In order to further promote the local consumption of new energy power generation, on September 12, 2025, the two departments jointly issued the "Notice on Perfecting the Price Mechanism to Promote the Local Consumption of New Energy Power Generation", which aims to break the institutional and mechanism barriers to the local consumption of new energy power generation by improving the price formation mechanism and market transaction rules, and to promote the economic feasibility of energy storage projects.
Overall, the market is optimistic about the storage demand expected in 2026. The leading company in the storage sector, Yangguang Power Supply, estimated at the third-quarter earnings conference in 2025 that the global storage industry will maintain a high-speed growth of 40% to 50% in 2026. According to the global storage supply chain database of Infolink, the global storage battery cell shipments accumulated 410.45 GWh in the first three quarters of 2025, a year-on-year increase of 98.5%. The full-year shipment is expected to exceed 560 GWh and approach 600 GWh. It is preliminarily expected that the global storage battery cell shipment in 2026 will be close to 800 GWh, continuing to maintain a high growth momentum.
In addition, from the perspective of industry production capacity and output data, the prosperity of the energy storage battery industry is at a high level, and the production capacity has been maintained at a high level of more than 80% since August. According to the data from Shanghai Non-Ferrous Metals Network, from January to October 2025, the cumulative production of energy storage battery cells was 409.4GWh, an increase of 55% year-on-year; the output in October was 54.3GWh, a 3% increase month-on-month, and it is expected that the output in November will further increase to 57GWh, a 5% increase month-on-month. After calculation, the annual output of energy storage battery cells in 2025 is expected to exceed 520GWh, an increase of 53% year-on-year, corresponding to a consumption of more than 370,000 tons of lithium carbonate. If the growth rate of the energy storage industry exceeds 40% in 2026, the demand for lithium carbonate in this field is expected to be 523,000 tons, which will significantly improve the market supply and demand balance sheet.
Inventory continues to decline
Driven by strong demand, the lithium carbonate market has shown a continuous trend of inventory reduction. As of November 20th, the total lithium carbonate inventory was 118,420 tons, a decrease of 2,052 tons compared to the previous month; this is a cumulative reduction of 24,750 tons from the year's high point of 143,170 tons.
In the short term, the futures price of lithium carbonate may experience increased volatility due to market sentiment fluctuations and adjustments in exchange policies. In the medium to long term, with the unproven demand for energy storage, the tight supply and demand balance is expected to continue supporting the steady upward movement of lithium carbonate prices. It is important to note that during the price increase, the market's sensitivity to supply-side disruptions will increase, and continuous attention should be paid to relevant industry dynamics.
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