China Forecasts Sharp Decline in Domestic Lithium Battery Demand
China's passenger car association forecasts a significant drop in domestic lithium battery demand by early 2026 due to phased-out tax incentives for EVs. This will impact major manufacturers like CATL and EVE Energy, signaling a global market shift.
洞察:
In a recent announcement, Cui Dongshu cui dongshu, the secretary general of China's passenger car association, has forecasted a significant downturn in domestic demand for lithium batteries starting in early 2026. This projection is rooted in the anticipated phase-out of tax incentives for electric vehicle (EV) purchases, which is expected to lead to a sharp decline in green passenger vehicle sales by at least 30% compared to the fourth quarter of 2025. The contraction is set to impact major Chinese battery manufacturers such as Contemporary Amperex Technology Ltd and EVE Energy Co., Ltd , who are already grappling with slowing exports.
The end of these incentives is likely to trigger a substantial drop in commercial EV sales as well, following a year-end rush by buyers seeking to capitalize on remaining subsidies. As the global leader in battery technology manufacturing and exports, China is facing a structural shift in its domestic market that could have far-reaching implications.
