Against the backdrop of the global energy transition, lithium batteries, as the core components of new energy vehicles (NEVs) and energy storage systems (ESS), have become a key link in the global industrial chain. In 2026, the global lithium-ion battery industry chain has been hit by a new round of volatility: Zimbabwe’s lithium ore export ban triggered sharp fluctuations in lithium carbonate prices, while prices of key links such as electrolytes and cathode materials have fluctuated synchronously. Coupled with the outbreak of overseas demand, geopolitical conflicts, and supply-demand mismatches, the volatility of cell material prices is transmitting along the industrial chain, profoundly affecting the pricing logic and market pattern of lithium battery finished products worldwide. From the rebound of energy storage cell quotes above 0.35 yuan/Wh (about 0.048 USD/Wh) in China to the widening “scissors gap” between costs and selling prices of power batteries in Europe and North America, this price storm triggered by upstream materials is forcing the global lithium battery industry to re-examine its cost control and development models.
As the core cost carrier of lithium battery finished products, the transmission efficiency and amplitude of cell material price fluctuations directly determine the adjustment rhythm of lithium battery prices. It is reported that cell materials account for 70%-80% of the total cost of lithium batteries, among which the price changes of core varieties such as lithium carbonate, cathode materials, and electrolytes have the most significant impact on the finished product costs.
Since the beginning of 2026, global lithium resource supply has been severely disrupted by regional policies: in January, the “Lithium Triangle” (Chile, Bolivia, and Argentina) officially signed the Joint Resource Reserve Agreement, implementing a “quota bidding system” for lithium ore exports and setting a floor price of 25,000 US dollars/ton (about 180,000 yuan/ton), which directly anchored lithium prices at a high level and broke the previous market supply-demand pricing model. In late February, Zimbabwe suddenly announced a comprehensive suspension of all lithium ore and lithium concentrate exports, including in-transit goods, allowing only enterprises with local mining licenses and approved deep processing capacity to obtain export permits, a move aimed at retaining high-value-added links in the country.
These policy changes have triggered a global lithium price shock. The price of battery-grade lithium carbonate in China’s futures market soared to nearly 190,000 yuan/ton (about 26,000 US dollars/ton), a surge of more than 170% from the low of 70,000 yuan/ton (about 9,700 US dollars/ton) in October 2025. In the week of March 2-6, it fluctuated sharply, with a maximum single-day drop of 11,500 yuan/ton (about 1,590 US dollars/ton) and a maximum weekly price difference of 18,500 yuan/ton (about 2,560 US dollars/ton), eventually falling by 17,200 yuan/ton (about 2,370 US dollars/ton) by the weekend. This high-frequency volatility has brought enormous challenges to cost accounting for lithium battery enterprises around the world, especially those highly dependent on imported lithium resources. Meanwhile, the escalation of geopolitical conflicts in the Middle East in March has pushed up logistics costs: the freight rate of lithium concentrate from Africa has soared nearly three times, and the rise in natural gas prices has increased the production costs of ore-based lithium extraction enterprises, with a per-ton cost increase of several thousand yuan, further amplifying the cost pressure on the industrial chain.
Beyond lithium carbonate, other cell materials have also shown differentiated fluctuations, exacerbating the cost pressure on lithium battery finished products globally. In the cathode material sector, since March, 5/6/8-series NCM cathode materials and power/energy storage-type LFP materials have fluctuated downward worldwide. The 5-series NCM cathode materials fell by 4,800 yuan/ton (about 660 US dollars/ton) in a week, and the price of power-type LFP materials fell by 4,100 yuan/ton (about 565 US dollars/ton) from the beginning to the end of the week, once again being overtaken by power-type lithium manganate materials, forming a long-term seesaw pattern. In the electrolyte sector, the price of domestic lithium hexafluorophosphate (LiPF6) has continued to decline, and the prices of ternary and LFP electrolytes have fallen synchronously, but the cost pressure from the previous rise in core electrolyte materials is still being transmitted.
For auxiliary materials, the price of anhydrous iron phosphate has risen slightly, the prices of electrolytic copper and aluminum have first risen and then fallen, and the prices of cobalt sulfate and ternary precursors have declined slightly, presenting an overall pattern of “volatility in core varieties and slight fluctuations in auxiliary materials”. This differentiated volatility makes it difficult for lithium battery enterprises around the world to hedge overall cost risks through price adjustments of a single material, further increasing pricing difficulty.
Notably, the transmission of cell material price fluctuations to lithium battery finished products is not immediate and synchronous, but has obvious lag and differentiation, leading to a game dilemma among all links of the global industrial chain. According to industry insiders, it only takes about 10 days for the price increase of raw materials such as LiPF6 and lithium carbonate to transmit to the cathode and electrolyte links, but it takes 1 month for cathode and electrolyte manufacturers to pass on the costs to the battery link, and it may take up to 3 months for battery manufacturers to pass on the costs to the power and energy storage terminals. This transmission lag has forced midstream and downstream enterprises to bear part of the cost pressure: in the past four months, the cost of cells has increased by as much as 30% globally, but the increase in selling prices is generally less than 20%, and the “scissors gap” between costs and selling prices continues to expand, putting many battery enterprises in a predicament of profit pressure.
Yang Hongxin, Chairman of Honeycomb Energy, publicly stated that the biggest uncertainty in the company’s 2026 profit target comes from the rise in upstream raw materials, and enterprises cannot quickly pass on all costs to downstream customers, so they have to absorb part of the pressure themselves. This situation is even more prominent in emerging markets such as Southeast Asia and Latin America, where local battery enterprises have weaker cost-bearing capacity and are more vulnerable to material price fluctuations.
The impact of material price fluctuations on lithium battery finished product prices varies significantly across different application scenarios and regions globally, with the energy storage sector being the most sensitive. Since 2026, energy storage cells have ushered in a new round of price increases, driven by both the rise in upstream materials and the global supply-demand imbalance. As the mainstream model, the quotation of 314Ah energy storage cells by leading manufacturers has approached 0.4 yuan/Wh (about 0.055 US dollars/Wh) in China, a significant increase from 0.31-0.34 yuan/Wh (about 0.043-0.047 US dollars/Wh) in the fourth quarter of 2025, and the theoretical cost of cells has risen from 0.28 yuan/Wh (about 0.039 US dollars/Wh) in the second half of last year to about 0.37 yuan/Wh (about 0.051 US dollars/Wh) currently, an increase of more than 30% in just a few months.
Globally, the demand for energy storage has exploded: the European and Middle Eastern markets have seen a surge in demand, and the demand for data center energy storage in the United States is growing rapidly, accounting for 52% of global energy storage demand. At the same time, the 314Ah cell is in the transition to 500+Ah large-capacity cells, and battery enterprises generally no longer expand production on a large scale, with new production capacity not expected to be released on a large scale until the second half of 2026, forming a phased supply gap, which makes the transmission of material price fluctuations to energy storage cell prices more direct.
In contrast, the price transmission in the power battery sector is more moderate, which is closely related to the competitive pattern of the global NEV market and regional policy constraints. Currently, the global NEV market competition is becoming increasingly fierce, and automakers are highly sensitive to power battery prices, adopting long-term agreement price locking and centralized procurement to suppress price increases. An insider from a new energy heavy-duty truck enterprise in East China said that they are currently suppressing price increases from battery suppliers through negotiations, but admitted that if the raw material price rise continues, the increase in cell prices will be inevitable.
In Europe, affected by the new Battery Regulation, automakers pay more attention to the carbon footprint of batteries, which also restricts the price transmission space of battery enterprises. In the United States, the IRA Act requires localized supply chains for energy storage system core equipment, which has led to a significant increase in the price of locally produced Chinese cells to about 80 US dollars/kWh, while the price of Japanese and South Korean cells in the U.S. market is as high as 160 US dollars/kWh (including subsidies), and the price of energy storage cabinets exported from China to the U.S. has risen to 100 US dollars/kWh. In addition, competition among power battery enterprises further restricts price transmission: some enterprises choose to absorb part of the material costs themselves to maintain market share, resulting in the increase in power battery prices being much lower than the increase in material costs. However, with the continuous volatility of material prices, the profit pressure on power battery enterprises is increasing, and some small and medium-sized manufacturers have shown signs of production capacity contraction, which is expected to further increase the concentration of the global industry, with the CR5 market share of power batteries reaching 85% globally.
Faced with the continuous volatility of cell material prices, all links of the global lithium battery industrial chain are actively taking countermeasures to break the pricing dilemma and promote the industry to return to rational development. The pace of long-term agreement locking between upstream material enterprises and downstream battery enterprises has accelerated significantly, showing the characteristics of “larger scale and longer duration”.
Since 2025, leading LFP manufacturers have had their production capacity intensively locked by downstream battery factories, with publicly disclosed orders totaling 9.3694 million tons and a maximum cooperation period extending to 2031; Tianci Materials, a leading electrolyte enterprise, has also successively obtained long-term orders from Chunen New Energy, Gotion High-Tech and other enterprises, with a total supply scale of 2.945 million tons. Long-term agreement orders, through the model of exchanging quantity for price, can not only help battery enterprises lock in stable supply and control costs, but also provide stable demand support for material enterprises, alleviating the operational risks caused by price fluctuations. Globally, the proportion of long-term orders in the resource sector has risen to more than 60%, becoming an important means for enterprises to lock in costs.
Technological innovation and integrated industrial chain layout have become the core starting points for enterprises to resist the impact of material price fluctuations. In the material link, high-end products such as high-compaction density LFP, 5μm ultra-thin and high-strength separators, and 4.5μm copper foil have premium space due to technological advantages and have become the focus of enterprise layout; in the cell link, large-capacity cells are accelerating penetration: 314Ah cells have become the mainstream in the global energy storage field, and ultra-500Ah large cells are being promoted for mass production, which can effectively hedge the impact of material price fluctuations with the advantages of low unit manufacturing cost and long cycle life.
Meanwhile, new technologies such as solid-state batteries and sodium-ion batteries are accelerating their landing: 2026 is the “first year of mass production” of solid-state batteries, with global shipments of 50GWh; sodium-ion batteries have entered the first year of large-scale application, with shipments of 27GWh, mainly used in energy storage, low-speed vehicles and other fields, and lithium-sodium hybrid technology has become an innovative solution, which will become an important constraint on lithium price fluctuations in the long run.
In addition, the global industrial chain is accelerating its restructuring under the influence of regional policies. The IRA Act in the United States and the new Battery Regulation in the European Union are promoting the localization of the lithium battery industrial chain, and the proportion of overseas production capacity of Chinese enterprises has risen to 25%, mainly distributed in Europe, Southeast Asia and Mexico.
Emerging markets such as Southeast Asia, the Middle East and Latin America have exploded, accounting for more than 12% of global demand, becoming a new growth pole for the lithium battery industry. Chinese lithium battery equipment exports are accelerating, with the overseas market share of winding and formation equipment reaching more than 40%, and the global industrial chain pattern is gradually shifting from “concentrated in China” to “global distribution”.
Looking ahead, the volatility of global cell material prices will remain a normal state in 2026: the supply of lithium resources will still be affected by the policies of resource-rich countries such as the “Lithium Triangle” and Zimbabwe, and geopolitical conflicts may further disrupt the supply chain; the global demand for lithium batteries will continue to grow, driven by NEVs and energy storage, with the global total shipments expected to reach 2.5TWh, a year-on-year increase of 25%. For the global lithium battery industry, how to adapt to the new pattern of material price fluctuations, strengthen international cooperation, optimize the supply chain layout, and reduce cost pressure through technological innovation will be the key to breaking the pricing dilemma and achieving sustainable development. The era of “low-cost competition” in the lithium battery industry has gradually ended, and the industry is moving towards a “value competition” stage dominated by technology, quality and supply chain stability.
