Overview

Executive Summary

Executive Summary In the last 25 years, Chinaʼs battery industry has undergone an unprecedented transformation, evolving from a technical latecomer to a dominant global leader. Driven by strategic national policies, from the initial “863 Programˮ (national NEV technology roadmap) and successive Five-Year Plans to NEV subsidies, China has built a comprehensive advantage across the battery value chain, spanning materials, manufacturing, equipment, talent, and downstream integration. This section deep dives the origins, structure, and sustainability of Chinaʼs battery ecosystem. 2025 Highlights & Trends Policy Focus on Market Health and Battery Safety Removal of mandatory storage allocation exposes true economics, triggering short-term installation volatility, margin compression, and faster industry consolidation Anti-involution policy: Measures introduced to promoting “quality over quantityˮ, curbing “irrational competitionˮ. New era of battery safety set forth by Chinaʼs strict GB380312025 standards - "no fire, no explosion", effective July 2026.

Continued Supply Chain Dominance Scale: China produces 86% of all cells globally, with 3TWh of installed nameplate production capacity. Overcapacity and margin pressure: Intensified domestic competition accelerates overseas manufacturing localization. Export controls: New restrictions on rare earths, key battery materials, equipment technologies released in 2025, but implementation will be delayed to November 10, 2026 given USChina trade talks.

Capital Allocation Trends

Rapid Technology Innovation

Investment growth: Total publicly disclosed investment projects surpassed RMB 820 billion, with a year-on-year growth rate of over 74%

Sodium-ion scaling: Commercial deployments expanding across applications: EV, E2W, and ESS.

More selective investment: Capital concentrated in 3 high value segments Li-ion batteries, materials upgrades, next-gen technology)

Semi-solid commercialization: SAICʼs MG4 vehicle launched at $14.5k signals readiness for mainstream market. All-solid-state gaining momentum, but remains in development phase, earliest SOP expected 2026.

Extracted from the PDF; charts and images may read imperfectly.