Sinolink: High prosperity continues in lithium battery peak-season production scheduling; 15th Five-Year Plan promotes new technology development.

Sinolink released a research report stating that since September 2026, the lithium battery sector as a whole has shown a trend of adjustment and divergence, with production scheduling across the entire supply chain remaining at a high level but share price performance relatively weak, and most sub-segments failing to sustain their rebound momentum. That month, lithium battery copper foil recorded a monthly gain/loss of 9%, becoming the only sub-sector within the sector with a notable increase. This month, trading in the new energy and technology growth sectors showed significant divergence. In the current period, most sectors are at the mid-to-high percentile of their 3-year historical range, with valuations for LFP cathodes, lithium battery copper foil, and new energy vehicles exceeding 80%. In 2026, lithium batteries are expected to welcome a main upward wave in volume and price alongside new technology breakthroughs, with prosperity across the supply chain blooming in multiple directions. Core focus should be on leading and strong second-tier battery cell manufacturers, price-increasing materials such as separators, steel/aluminum foil, anodes, and VC, as well as new technology companies in solid-state and sodium-ion batteries. Sinolink's main views are as follows: New Energy Vehicles: Europe's high prosperity continued in August, China continued to improve, US demand under pressure In August 2026, the global new energy vehicle market continued its growth trend, with performance across regions continuing to diverge. The European market maintained stable growth momentum, China's market sales continued to recover and grow, while the US market saw an intensified year-on-year decline, with demand recovery still relatively weak. According to data from the China Passenger Car Association and others, in August, new energy vehicle sales in China/ten European countries/US reached 1.42 million/610,000/110,000 units respectively, with year-on-year growth rates of +16%/+35%/-36%, and penetration rates of 64%/53%/8%. China's August sales grew 16% year-on-year, continuing the trend from June, mainly driven by the full implementation of the auto trade-in policy, launches of new models by automakers, and the continuous increase in new energy penetration rates. Europe's sales growth continued to exceed expectations, mainly driven by the continuation of subsidy policies in multiple countries and demand release during the policy window period. The US declined 36% year-on-year in August, affected by policy uncertainty and subsidy phase-outs, with demand recovery still relatively weak. Energy Storage: Domestic installations slowed in August, US utility-scale storage grid connection pace fluctuated In August 2026, China added 13GWh of new energy storage installations, +3% year-on-year and -36% month-on-month, beginning to slow after continuous recovery in June and July; cumulative installations from January to August reached 98GWh, +53% year-on-year, with the cumulative growth rate continuing to significantly exceed the full-year forecast, as both the resilience of domestic energy storage demand and the pace of project implementation exceeded expectations. In the US, August utility-scale storage grid-connected capacity was 2GWh, -38% year-on-year and -23% month-on-month, mainly affected by the high base from the concentrated commissioning of large long-duration storage projects in June; the number of grid-connected projects was roughly equivalent, but the scale of individual projects and average storage duration declined. Cumulative grid-connected capacity from January to August was 23GWh, -7% year-on-year, still below the full-year forecast growth rate of +33%, and the sustainability of subsequent recovery still needs to be observed. Lithium Battery Production Scheduling: October production scheduling continues at high prosperity, +0%~5% month-on-month, +35%~59% year-on-year Pre-scheduled production for batteries/cathodes/anodes/separators/electrolytes increased by 54%/54%/48%/49%/59% year-on-year respectively, with electrolytes having the highest cumulative year-on-year growth at 59%, and both batteries and cathodes exceeding 50% cumulative year-on-year. Overall, October lithium battery supply chain production scheduling continued to grow on the high base of September, but the month-on-month growth rate slowed overall, mainly due to material shortages. Lithium Battery Prices: In September, lithium battery supply chain prices continued structural divergence, overall showing "lithium salts and cathodes weakening, electrolyte auxiliary materials rising" In upstream resource products, lithium carbonate fell significantly as maintenance ended and supply rapidly recovered; lithium hydroxide was dragged down by declining lithium salts and weakening medium-to-high nickel demand; electrolytic cobalt also declined due to weak demand. Midstream cathodes were under overall pressure, with ternary materials dragged down by declining raw materials and order reductions, while LFP was mainly affected by the rapid decline in lithium carbonate. Electrolytes strengthened overall, with peak-season demand and cost transmission supporting prices; DMC had the largest increase, with lithium hexafluorophosphate and LiFSI rising simultaneously. Copper foil supply and demand were relatively tight, with processing fees continuing to rise. Overall, in September, weakening lithium salts and cathodes coexisted with local supply-demand tightness in electrolytes and steel foil. New Technologies: Policy guidance catalyzes solid-state and high-performance new technology directions On September 28, the "15th Five-Year Plan for the Development of New Battery Industry" issued by seven departments anchored the large-scale application of all-solid-state batteries by 2030, clarifying a route with lithium batteries as the mainstay and sodium-ion/flow batteries as coordinated alternatives. The industry's main theme is shifting from capacity expansion to technological upgrading, with rising barriers accelerating industry concentration, benefiting leading players as well as directions such as solid-state, energy storage, sodium-ion, and high-end materials and equipment. Risk Warnings New energy vehicle demand falling short of expectations, energy storage market demand falling short of expectations, risks of European and US policy sanctions, etc.