With the release of a new document, the already vibrant lithium-battery industry has recently gained fresh momentum for growth.

On September 4, the Ministry of Industry and Information Technology and the State Administration for Market Regulation officially released the "Action Plan for Steady Growth in the Electronic Information Manufacturing Industry (2025–2026)," outlining the key targets for 2025 to 2026: The added value of manufacturing industries such as computers, communications, and other electronic equipment—defined as those above designated size—is expected to grow at an average rate of around 7%. Additionally, when combined with related sectors like lithium battery production, photovoltaics, and component manufacturing, the annual revenue growth of the entire electronic information manufacturing industry is projected to reach over 5% on average.

This indicates that lithium batteries remain one of the key drivers behind revenue growth in the electronic information manufacturing industry.

Since the beginning of this year, China's lithium-battery industry has witnessed a surge in demand. Consequently, leading companies have seen their capacity utilization rates rise, with production schedules gradually expanding. Meanwhile, several lithium-battery firms have announced ambitious expansion plans, projecting that capital expenditures will increase significantly year-on-year this year.

Industry insiders point out that the growth in new-energy vehicle sales, coupled with robust demand for energy storage, has strongly boosted downstream demand for lithium batteries. "We expect capacity utilization across all segments of the lithium battery industry chain to continue rising, and the profitability of both battery and materials segments is likely to keep improving," according to Huatai Securities.

  Where does the demand come from?

According to a comprehensive analysis from multiple industry sources, the incremental demand driving the current "lithium battery boom" primarily stems from power batteries and energy storage batteries.

This year, the significant growth in new energy vehicle sales has driven a sustained increase in demand for power batteries—the primary application area for lithium batteries.

According to a report released in July by market research firm Rho Motion, global sales of new-energy vehicles reached 9.1 million units in the first half of this year, representing a year-on-year increase of 28%. Notably, the Chinese market accounted for more than half of these sales, totaling 5.5 million units—a 32% rise compared to the same period last year. Meanwhile, a forecast released in August by the Passenger Car Market Information Joint Association under the China Automobile Dealers Association indicates that cumulative retail sales of new-energy vehicles in China are expected to hit 7.504 million units through the first eight months of this year, marking a robust 25% growth over the previous year.

The reason domestic sales of new energy vehicles continue to maintain a relatively high growth rate is twofold: on one hand, the improved performance of complete new-energy vehicles has boosted consumer enthusiasm; on the other hand, advancements in power battery technology and intensified industry competition have led to declining prices for these vehicles. Notably, when looking at specific segments, the rapid increase in electrification penetration among commercial vehicles and construction machinery has driven a remarkable surge—domestic sales of new-energy heavy-duty trucks surged by 179% year-on-year from January to July this year, reaching 96,000 units, making them a significant engine propelling the overall growth in new-energy vehicle sales.

Demand for energy storage batteries has exceeded expectations, also contributing to a certain degree of tight production capacity among leading lithium-battery companies.

Also from data by Rho Motion, global battery energy storage systems added 86.7 GWh of new installed capacity in the first half of this year, representing a year-on-year increase of 54%. A representative from a energy storage company told the reporter from the 21st Century Business Herald: "This figure actually exceeded industry expectations. On the domestic market, the implementation of 'Document No. 136' (the Notice on Deepening Market-Oriented Reform of New Energy Grid Parity Prices and Promoting High-Quality Development of New Energy) has shifted the country from mandatory storage requirements to market-driven competition. Meanwhile, with relatively mature profit models for energy storage already in place, this has spurred fresh market demand. Meanwhile, in overseas markets, large-scale storage projects have been successively launched in traditional European and American markets as well as emerging ones, further boosting the overall scale of energy storage installations."

In fact, another new variable also deserves attention: the anticipated upgrade in power battery technology is poised to unlock additional growth.

Recently, a brokerage firm released a research report stating that three key factors—policy support, market demand, and technological breakthroughs—are accelerating the commercialization of solid-state batteries.

According to a research report released by CICC, solid-state batteries hold significant advantages in terms of enhanced safety and higher energy density, making them well-positioned for broad applications across sectors such as new-energy vehicles, urban air mobility, and consumer electronics. "Solid-state batteries are expected to achieve large-scale production first in the eVTOL (electric vertical takeoff and landing) segment and consumer electronics, driving down costs through economies of scale before gradually rolling out for automotive applications in the powertrain sector."

A reporter from the 21st Century Business Herald noted that CATL, the lithium-battery giant, recently shared its latest insights into the pace of industrializing solid-state batteries. During its earnings conference call, the company stated: "Currently, the scientific challenges in the solid-state battery industry have largely been addressed, though some engineering issues remain. As a result, commercialization—including aspects like the supply chain—still has a ways to go."

  Gradually expanding production

“Currently, market demand remains robust, and the company is expanding its production capacity in response to market needs. As a result, this year’s CAPEX (capital expenditure) will see a moderate increase compared to last year.” At the recent earnings briefing, CATL stated that its capacity utilization rate for the first half of this year has remained at a relatively high level.

Financial reports show that CATL's battery system production capacity for the first half of this year reached 345 GWh, with output totaling 310 GWh, resulting in a capacity utilization rate of 89.86%. This figure represents an increase of more than 24 percentage points compared to the first half of 2024, and also marks a 13-percentage-point rise from the company's full-year capacity utilization rate in 2024.

Although not all lithium battery companies disclosed their capacity utilization rates in the 2025 interim reports, according to a review by reporters from the 21st Century Business Herald, companies such as CATL, EVE Energy, Xinwangda, and CALB have all shared updates on their capacity expansion progress. For instance, Xinwangda stated that in the first half of 2025, the company actively pursued both domestic and international capacity expansions, with new production facilities gradually coming online to meet growing customer order demands. Meanwhile, EVE Energy and CALB mentioned in their interim reports that their overseas manufacturing bases are currently under continuous construction.

According to industry statistics, in the first half of this year, several leading lithium-battery manufacturers explicitly announced expansion projects.

So far this year, CATL has announced the addition of several new production projects in Fujian, Shandong, Henan, and other regions. According to its semi-annual report, as of the first half of this year, CATL’s under-construction battery system capacity stands at 235 GWh, an increase of 16 GWh compared to the end of 2024.

On August 29, Guoxuan High-Tech announced that it will invest in building a new lithium-ion battery manufacturing base with an annual capacity of 20 GWh in Nanjing Liuhe and another new energy battery base with an annual capacity of 20 GWh in Wuhu, Anhui. The combined total investment for both projects will not exceed 8 billion yuan.

Additionally, EVE Energy, Ganfeng Lithium, and CALB's lithium battery projects all made construction progress in the first quarter of this year.

Behind the steady progress of leading lithium-battery manufacturers in expanding their production capacity lies the recovery in profitability observed across the entire A-share lithium-battery sector during the first half of this year.

Using the 106 lithium battery concept stocks listed in Wind's lithium battery sector as a sample, Zhongyuan Securities calculated that the sector achieved operating revenue of 1.13 trillion yuan in the first half of this year, representing a year-on-year increase of 13.78%. Meanwhile, net profits reached 67.951 billion yuan, up 28.07% from the same period last year.

It should be noted that, due to the intense competition that the lithium-battery industry experienced in recent years—leading to price pressures across the industrial chain—the performance of the lithium-battery sector declined in 2023 and 2024. Although performance showed some recovery in the first half of this year, segmentation within the industry has begun to diverge.

"Since 2025, the cathode, anode, and electrolyte segments have performed relatively well, while lithium mining and separator segments continue to face overall pressure on their earnings," according to an analysis by Zhongyuan Securities.