Industry Value Chain

Policy Shifts are Driving Demand Front-Loading and a Manufacturing Race to Deliver Policy changes or pending policy implementations in China, US, and other regions have driven a front-loading of demand at various points throughout 2025. China: changes to its renewable power pricing mechanisms, co-located storage mandate, technology export controls, phase-out of export VAT rebate → rush of installations and procurement before implementation US sourcing rules now applying to production tax credit and BESS investment tax credit, abolishment of EV tax credit, successive tariff hikes → front-loading of orders and stockpiling before implementation Rest of World: having observed trade tensions rising and Chinaʼs anti-involution campaign intensifying, other regions are also accelerating procurement from China, especially BESS while costs remain extremely low. This has all fuelled a manufacturing race to deliver. Chinaʼs battery factories are operating at high utilisation while also upgrading lines for new cell technologies, which in turn prompts customers to secure more long-term supply. This behavior amplifies underlying demand growth and has led to elevated order volumes, especially for ESS battery cells and LFP CAM.

Source: Content & analysis provided by CRU Group Distinguished Partner). For more information, visit crugroup.com

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