Lithium Battery Prices Enter an Uptrend Channel: Rebalancing of Industrial Cycles and Value Logic

After years of an industry-wide downward cycle, the price of lithium iron phosphate has been on a continuous upward trend for six months starting from June 2025. Data from Shanghai Steelhome (25.720, +0.60, +2.39%) shows that as of mid-December 2025, the mainstream market price of power-oriented lithium iron phosphate had surged to RMB 41,200 per ton, representing a nearly 30% increase within half a year.

 

This price hike is by no means an isolated incident. A cost-driven wave of price increases, spanning from cathode materials to lithium salts, is reshaping the overall landscape of the lithium battery industry. Fueled by favorable cost-side dynamics, the new energy industry chain is undergoing a phase of self-calibration, with enterprises in niche segments such as large cylindrical batteries accelerating their deployment to capitalize on this trend.

 

 

Analysts point out that the current price rally of lithium iron phosphate is an inevitable outcome of the profound rebalancing of supply and demand following a three-year industry downturn. Fundamentally, it is underpinned by the dual demand drivers of the simultaneous expansion of new energy vehicles (NEVs) and energy storage sectors, which is gradually relieving the accumulated pressures across the industry.

 

From the end of 2022 to August 2025, the price of lithium iron phosphate materials plummeted by over 80%, placing significant profitability pressures on the entire industry.

 

The industry's turning point emerged in June 2025. As upstream raw material prices climbed and downstream demand continued to recover, price increases became an inevitable choice for enterprises to sustain normal operations. Recently, several leading new energy companies including EVE Energy (68.970, +3.21, +4.88%) (rights protection), Chuangming New Energy, BAK Battery, and Tianneng Group have successively issued price adjustment notices, which are expected to drive a new round of performance growth for industry players.

 

Beneath the surface of rising raw material costs lies the robust support from the better-than-expected boom in downstream market demand—the core driver of this lithium iron phosphate price surge, stemming from the two key sectors of NEVs and energy storage.

 

Compared with lead-acid batteries, lithium iron phosphate batteries offer distinct advantages in performance, cost-effectiveness, and environmental friendliness. They have now become the mainstream technical route in NEVs, light-duty power systems, and energy storage systems, boasting strong irreplaceability. With the implementation of new national standards imposing higher requirements, the future market space for lithium iron phosphate batteries is set to expand further.

 

In the power battery sector, lithium iron phosphate has long established its dominant position. From January to November 2025, sales of lithium iron phosphate power batteries in China skyrocketed by 66.9% year-on-year, with their market share climbing to 72.8%. This growth momentum is highly aligned with the strong performance of the NEV market—during the same period, domestic NEV production and sales both exceeded 31% year-on-year, directly fueling the surge in demand for power batteries.

 

Demand growth in the energy storage market has been even more robust, emerging as another crucial engine driving lithium iron phosphate demand. GGII (Gaogong Industry Research Institute) predicts that the shipment volume of energy storage lithium batteries in China will surge by over 75% in 2025. Notably, nearly 100% of energy storage batteries adopt the lithium iron phosphate technical route, creating a more direct pull on upstream material demand. Data from relevant industry associations shows that lithium iron phosphate materials account for as high as 99.9% of the energy storage battery sector, solidifying its role as a key material cornerstone for the construction of new power systems.

 

 

The sustained recovery in prices is driving upstream and terminal battery industries to gradually move away from cutthroat low-price competition and enter a new development phase centered on value creation.

 

Industry-wide collaborative efforts to break the deadlock have taken the lead. In November 2025, representatives from seven major domestic lithium iron phosphate enterprises gathered in Beijing to discuss the industry's future development direction. At the meeting, the China Chemical and Physical Power Industry Association explicitly advocated for reconstructing the industry's pricing logic with cost indices as the core reference, fundamentally avoiding vicious competition and laying a solid foundation for the healthy development of the industry.

 

This guiding direction has already translated into positive signals at the enterprise operation level. Industry analysts generally believe that the dividends of this round of industry recovery will be concentrated more in leading enterprises with technological advantages, cost control capabilities, and high-quality customer resources.

 

Amid the explosive dual demand from the vehicle and energy storage sectors, small and medium-sized battery systems are also keeping pace. Light-duty power systems, portable energy storage, and residential energy storage are ushering in a new round of iterative growth. Take Chuangming New Energy, a veteran battery manufacturer and a leading player in the cylindrical battery segment, as an example. Recently, the company issued a public notice on price adjustments for large cylindrical lithium iron phosphate batteries, explicitly stating that it would raise prices for its entire range of battery products starting from December 1, 2025. This price adjustment is supported by the sustained high prosperity of its production capacity and orders—the Mianyang production base has maintained a long-term high capacity utilization rate, with its core product, the 32140 large cylindrical lithium iron phosphate battery, achieving full production and full sales. According to industry insiders close to the plant, current order backlogs are substantial, logistics operations are bustling, and production line automation efficiency ranks among the industry's top tier. These details directly demonstrate the strong market demand for large cylindrical batteries.

 

Amid the competition among diverse battery technology routes, market attention on large cylindrical batteries has been continuously rising. Industry data shows that the global demand for large cylindrical batteries exceeded the 100 GWh mark in 2025. Coupled with the sustained growth momentum of small and medium-sized energy power systems, large cylindrical batteries are poised to enjoy considerable growth space in the coming years, emerging as a key driving force for the high-quality development of the battery industry.

 

Faced with rising material costs and fragmented market demand, enterprises with solid technological accumulation are building their competitiveness through product iteration and market positioning.

 

Taking Chuangming New Energy as an example, its 32140 lithium iron phosphate full-tab large cylindrical battery focuses on cost-performance ratio, while offering uniform heat dissipation and high safety. The battery can operate stably at a high temperature range of 60℃, making it highly suitable for light-duty power and residential energy storage markets in Southeast Asia and tropical regions. This technological advantage has been directly converted into market competitiveness. The company's products have been mass-exported to markets such as the Middle East, Europe, and India, positioning it among the industry's front-runners in overseas competition.

 

At present, the battery industry chain is in a period of dual transformation featuring structural adjustment and technological iteration. Beyond large cylindrical batteries, multiple technical routes including semi-solid-state, all-solid-state and sodium-ion batteries are also advancing in parallel and achieving accelerated breakthroughs.

 

For large cylindrical batteries, despite the core challenges they still face such as production efficiency and product consistency, they have been expanding their application scenarios by virtue of their unique advantages in energy density and structural stability. These batteries have deeply penetrated high-end electric vehicles, residential energy storage, portable energy storage and other fields, and have also emerged in emerging tracks such as eVTOL. With the continuous advancement of material system upgrading and production process optimization, large cylindrical batteries are expected to further unlock their market potential in light-duty vehicles, energy storage systems and other sectors, and play a more pivotal role.

 

The industry boom is also undergoing structural reshaping. Brokerage analysts point out that this round of lithium iron phosphate price increases is backed by solid fundamentals, and the industry’s long-term development trend remains positive. In addition, insiders from lithium battery enterprises indicate that downstream demand continues to stay robust, and the price adjustments triggered by cost pass-through are essentially a rational return of industry value.

 

Standing at the new starting point where the industry is moving towards high-quality development, the core competitiveness of enterprises will no longer be simply limited to production capacity scale and cost control capabilities, but will depend more on the comprehensive competition of technological innovation, capital strength and supply chain collaboration capabilities.