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Executive Summary
Executive Summary In the last 25 years, China’s 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 Program” (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 China’s 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 quantity”, curbing “irrational competition”. New era of battery safety set forth by China’s strict GB38031-2025 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 US-China 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: SAIC’s 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.
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