Soochow: Strong lithium demand, good profitability, and rising volume of lithium carbonate sector.

Soochow releases a research report stating that the bank estimates global sales of new energy vehicles to reach 22.45 million units in 2026, a 6% increase compared to the previous year. Taking into account the increase in individual vehicle battery capacity, it is predicted that the demand for power batteries will reach 1,733 GWh, a 21.5% increase. It is also forecasted that the power demand will reach 2,039 GWh in 2027, an 18% increase compared to the previous year. The bank expects the global energy storage demand to increase by 73% in 2026, reaching 1,111 GWh, and to grow by 40% in 2027 to 1,572 GWh. The price of lithium carbonate industry chain is expected to rise, with the sector seeing overall growth. Key points by Soochow: 1. Global sales in 2026 are expected to increase by 6%, with a 20%+ increase in power battery demand, and a maintained growth of 15-20% in 2027. 2. Domestic sales in 2026 are under pressure, but strong growth in heavy trucks and exports are expected, with total sales reaching around 18.72 million units, a 14% year-on-year increase. 3. The energy storage market continues to show strong demand both domestically and internationally, with a projected growth of 37% in 2026 and a sustained 27% growth in 2027. 4. The second half of 2026 is expected to see an increase in industry chain prices, with overall growth in the sector. Investment recommendations focus on lithium battery industry leaders, as well as companies in the lithium materials sector such as Contemporary Amperex Technology, Ganfeng Lithium Group, and others. The report also highlights new technologies in energy materials and the potential for growth in the industry. Risk factors include increased competition, unexpected policy changes, lower-than-expected renewable energy installations, and insufficient raw material supplies.