Citi: China's battery 15th Five-Year Plan is a long-term positive, unlikely to drive a valuation re-rating in the short term.

Citi released a research report stating that under China's 15th Five-Year Plan, the focus of battery plans has shifted from capacity expansion to technology, quality, and green compliance, prioritizing solid-state batteries, longer energy storage cycle life, and carbon footprint traceability. Investor feedback indicates that Contemporary Amperex Technology (03750) and BYD COMPANY (01211) are able to benefit from the plan due to their aligned R&D pipelines, strong compliance capabilities, and reinforcement of their duopoly position; second-tier battery makers may face margin pressure and consolidation risks. The bank noted that vertically integrated automakers such as GEELY AUTO (00175) and Great Wall Motor (02333) have seen their in-house development strategies validated, while NEV brands that outsource batteries face mild cost headwinds and need to adjust their solid-state battery timelines. Although the plan is a long-term positive for the battery industry, the bank believes it is unlikely to drive a valuation re-rating of related stocks in the short term, given weak industry fundamentals, with September NEV retail sales expected to record a double-digit year-on-year decline.