Core Viewpoint - The Chinese lithium battery industry appears to be emerging from a recession, with a significant increase in revenue and positive growth in most segments [2][10]. Revenue Growth - In the first half of 2025, over 100 Chinese lithium battery companies reported a combined revenue of approximately 537.995 billion yuan, marking a year-on-year increase of 14.95%, a recovery from a 20.21% decline in the same period of 2024 [2][10]. - Among 15 sub-segments of the lithium battery industry, 12 experienced revenue growth, with 10 segments showing increases of over 10%. The fastest-growing segments were cobalt-nickel (67.88%), lithium battery copper/aluminum foil (37.22%), and anode materials (31.64%) [2][5]. Profitability Analysis - Despite revenue growth, the overall gross margin for Chinese lithium battery companies was approximately 18.24%, a decrease of 1.22% year-on-year. Eight sub-segments, including lithium resources and lithium battery separators, saw declines in profitability [5][6]. - There is a significant disparity in profitability among different sub-segments, with the lithium battery equipment sector's gross margin being 3.48 times that of the lithium copper/aluminum foil sector [6][8]. Market Conditions - The current market conditions remain challenging, with a global lithium-ion battery production capacity expected to reach 4,315 GWh in 2024, while the shipment volume is projected at 1,545 GWh, resulting in a capacity utilization rate of only 36% [10]. - By 2025, global lithium-ion battery production capacity is anticipated to grow to 5,732 GWh, with shipment volumes of 1,899.3 GWh and 5,127.3 GWh expected by 2030, indicating severe overcapacity in the lithium battery industry [10]. Price Trends - Following a peak in lithium carbonate prices in 2023, lithium battery prices have continued to decline due to falling costs and oversupply pressures. As of July 25, 2025, the prices for various battery types have dropped significantly compared to early 2023, with declines of 67% for lithium iron phosphate batteries and 64% for ternary battery cells [11][12].

Core Viewpoint - The global lithium battery industry is undergoing a significant transformation, moving away from a period of rapid growth to a phase of contraction, particularly as it approaches 2024, indicating an unprecedented downturn in the sector [1]. Industry Overview - Over the past two decades, China's lithium battery sector has achieved substantial breakthroughs in technology innovation, globalization, and industry investment, capturing a dominant global market share in various key areas, including approximately 70% of global power battery shipments and over 90% of energy storage battery shipments [1]. - The lithium battery industry is now facing a downturn, with a reported 11.87% decline in overall revenue for 108 Chinese lithium battery companies in 2024 compared to the previous year, alongside a staggering 67.27% drop in net profit [1][3]. Financial Performance - Key financial metrics for 2024 include: - Total assets: 29,092.41 million, up 6.17% year-on-year - Total liabilities: 16,721.07 million, up 7.31% year-on-year - Operating revenue: 13,028.84 million, down 11.87% year-on-year - Net profit attributable to shareholders: 651.92 million, down 67.27% year-on-year - Net financing cash flow: 210.20 million, down 81.91% year-on-year [3]. Market Dynamics - Major players in the industry, including CATL, Ganfeng Lithium, and Tianqi Lithium, are experiencing significant revenue declines, with CATL reporting a 9.7% drop in revenue for 2024, and other companies seeing declines of over 50% in their lithium product revenues [4][5]. - The global lithium battery landscape is shifting, with even leading companies facing severe impacts, as evidenced by the financial struggles of major Korean battery manufacturers and the bankruptcy filing of Ambri Inc. in the U.S. [5][6]. Investment Trends - The investment landscape is changing, with a notable halt or delay in large-scale lithium battery projects. Over 30 lithium battery business terminations have been reported in 2023 alone, involving investments exceeding 100 billion yuan [9]. - The global lithium battery industry is witnessing a retreat from previous aggressive expansion, with significant projects being canceled or postponed, such as LG Group's withdrawal from a planned electric vehicle battery ecosystem in Indonesia [9][10]. Future Outlook - The lithium battery industry is entering a new phase characterized by competition based on technological strength and operational efficiency rather than mere expansion. Companies that can demonstrate continuous innovation, effective capacity management, and strong financial health are likely to thrive in this evolving landscape [11].