China's Lithium Battery Demand to Decline Sharply in Early 2026

Slowing EV Sales and Weakening Exports Drive Demand Drop

The demand for lithium batteries in China is anticipated to experience a significant decline in early 2026, primarily due to the slowdown in electric vehicle (EV) sales in the domestic market and the weakening of battery exports. Cui Dongshu, Secretary-General of the China Passenger Car Association (CPCA), stated that the demand for new energy batteries will plummet drastically from late 2025 to early 2026.

Impact of Slowing EV Sales

The slowdown in EV sales in China is a major factor contributing to the expected decline in lithium battery demand. As the world's largest EV market, any significant changes in China's EV sales trends have far-reaching implications for the global lithium battery industry. The reduction in demand is likely to affect not only domestic battery manufacturers but also international companies with operations in China.

Global Implications

The anticipated decline in China's lithium battery demand will have significant implications for the global battery supply chain. As China is a major player in both the production and consumption of lithium batteries, any downturn in its demand is likely to impact global market dynamics. This could lead to adjustments in production capacities and pricing strategies across the industry.