Core Viewpoint - The lithium battery industry is experiencing a new cycle of supply-demand tension, with a shift from energy storage to passenger vehicle batteries, leading to increased urgency in supply chain management and production capacity adjustments [3][5][33]. Group 1: Supply Chain Dynamics - The supply chain is under pressure as the demand for battery cells increases, prompting automakers to temporarily source cells from leading manufacturers like CATL to ensure timely deliveries [2][17]. - The overall battery production is operating at high levels, with the top 20 battery manufacturers increasing production by over 20% and an average industry utilization rate nearing 90% [9][8]. - The supply-demand balance is approaching a critical point, with rising prices across various materials, including lithium hexafluorophosphate and an increase in the production of negative electrode materials [4][6][24]. Group 2: Market Growth and Projections - The total shipment of lithium batteries in China is projected to reach 1,175 GWh in 2024, with over 780 GWh coming from power batteries and 335 GWh from energy storage batteries, indicating robust growth [19]. - The domestic automotive sales are expected to rise from 12.87 million units in 2024 to 16 million units in 2025, with the energy storage market also anticipated to continue its rapid growth [20]. - The first three quarters of 2025 have already seen power battery shipments of approximately 785 GWh, a year-on-year increase of 47%, while energy storage battery shipments have nearly doubled, with a 99% increase [19]. Group 3: Strategic Responses from Automakers - Automakers are adopting strategies to secure battery supply, including urgent procurement from leading manufacturers and forming joint ventures or partnerships to control battery production [17][18]. - The establishment of new battery companies and collaborations, such as those between Zhongchuang Xinhang and Leap Motor, reflects a strategic focus on battery supply control [17]. - The trend of automakers building their own battery production capabilities is gaining momentum, with companies like Beiqi and GAC entering the external market with their batteries [17]. Group 4: Future Challenges and Opportunities - The current supply chain tension is viewed as a structural pressure rather than a systemic capacity shortage, suggesting that the industry can adapt to the growing demand without facing a crisis similar to the 2020 chip shortage [21][22]. - The industry is expected to enter a new growth cycle, with a focus on supply chain collaboration and strategic partnerships to stabilize supply [29][30]. - The emergence of new markets and technologies, such as solid-state batteries and the growing importance of the after-market for electric vehicles, presents both challenges and opportunities for the industry [31][32].