The explosive demand for energy storage and the acceleration of commercial vehicle electrification have driven the lithium battery industry into a new growth cycle. According to statistics from the Institute of Advanced Industrial Technology, there were over 282 publicly invested projects in the entire lithium battery industry chain in China throughout the year, with a total investment exceeding 820 billion yuan, a year-on-year increase of over 74%; 64 new planned projects for lithium batteries have been added, with a planned production capacity exceeding 1100GWh, a year-on-year increase of 105%. In this context, leading battery companies such as CATL and Zhongchuang Aviation have intensively launched expansion plans, while accelerating their penetration into upstream resource ends through equity binding and long-term contract orders, building a stable supply chain moat.

Faced with strong market demand and fierce industry competition, "deep equity binding+large-scale long-term agreement locking" has become the core strategy for battery manufacturers to ensure raw material supply. In the fourth quarter of 2025, CATL invested over 5 billion yuan to increase its capital in Jiangxi Shenghua, a lithium iron phosphate enterprise, and Tianhua New Energy, a lithium salt giant, respectively, further consolidating its resource control; Zhongchuang Aviation has teamed up with Huayou Holdings to strategically invest in Shengxin Lithium Energy and signed a long-term agreement from 2026 to 2030, locking in a total lithium salt production capacity of over 420000 tons. Compared to the shallow cooperation dominated by minority equity investment in 2021, this round of cooperation not only has a larger order scale and longer cycle, but also forms a dual binding loop of "capital+orders", highlighting the synergistic effect of the industrial chain.

Upstream lithium battery material companies are closely following the pace of expansion, with the most significant increase in investment in the fields of positive electrode materials and electrolytes. Benefiting from the dual wheel drive of energy storage and power battery demand, the utilization rate of lithium iron phosphate production capacity will climb to over 70% by 2025, and top enterprises will operate at full capacity. At the same time, the supply and demand of key materials such as lithium hexafluorophosphate and lithium carbonate are tightening, and there is a strong expectation of price increases. The pricing of materials generally adopts a floating mechanism of "raw materials+processing fees". The negotiation period for processing fees for long-term contract orders has been extended to 2-3 months, and the price of individual orders is 2000 yuan/ton higher than the long-term agreement price. The industry's profit model is gradually becoming clearer.

It is worth noting that the lithium iron phosphate industry is facing the dilemma of "increasing quantity and decreasing profit". Data shows that from the end of 2022 to August 2025, the price of lithium iron phosphate materials has dropped by 80.2%, and the entire industry has suffered continuous losses for over 36 months. The average debt ratio of six listed companies has reached 67.81%. Although orders from top companies have been scheduled until 2026, after deducting the cost of lithium carbonate, the product price is still lower than the average production cost. In this context, top manufacturers plan to raise the processing fee for the entire range of lithium iron phosphate by 3000 yuan/ton starting from 2026, in an attempt to alleviate cost pressures and reverse the industry's long-term loss situation.

The competition dimension of the lithium battery industry has upgraded from a single capacity and price competition to a supply chain ecological competition centered on core battery factories. Leading enterprises are conducting joint research and development with upstream material suppliers around cutting-edge technologies such as solid-state batteries and sodium batteries, forming technological barriers. The deep cooperation between CATL and Jiayuan Technology in copper foil for solid-state batteries and Rongbai Technology in the field of sodium electric materials is a typical example. It is widely believed in the industry that in the future, the industry will accelerate the concentration of top players with technology, scale, and supply chain synergy capabilities, forming several core industry group formations, and the industry reshuffle process will be comprehensively accelerated.Editor/Bian Wenjun