Lithium battery prices enter an upward trend: a rebalancing of industry cycles and value logic.

After several years of decline, the price of lithium iron phosphate (LFP) batteries began to rise in June 2025, increasing by nearly 30% within six months. This round of price increases was cost-driven, impacting the entire lithium battery industry ecosystem. The new energy supply chain underwent self-correction, with companies in specific sectors, such as large cylindrical battery manufacturers, accelerating their expansion. As industry pressure eased, demand from new energy vehicles and energy storage drove the market, leading to a rebound in LFP material prices after a significant correction. LFP batteries dominate in new energy vehicles and energy storage systems, with market demand growing rapidly.

After several years of industry downturn, lithium iron phosphate (LFP) prices began a six-month surge in June 2025. Data from Shanghai Steel Union shows that by mid-December 2025, the mainstream market price of power-type LFP had risen to 41,200 yuan, an increase of nearly 30% in six months.

This price increase is not an isolated phenomenon. From cathode materials to lithium salts, a cost-driven price surge is impacting the overall ecosystem of the lithium battery industry. Driven by favorable cost conditions, the new energy industry chain is undergoing a "self-correction," with companies in niche sectors such as large cylindrical batteries accelerating their expansion.

Three years of industry pressure are gradually being released, with both vehicle sales and inventory management progressing, driven by market demand.

Analysts point out that the current price increase of lithium iron phosphate (LFP) is an inevitable result of a deep adjustment in supply and demand after a three-year downturn in the industry. This is further driven by the dual demand from new energy vehicles and energy storage, with pent-up pressure gradually being released.

From the end of 2022 to August 2025, LFP material prices experienced a deep correction, declining by more than 80%, putting overall profitability pressure on the industry.

The industry turning point began in June 2025. With rising upstream raw material prices and a continued recovery in downstream demand, price increases gradually became an inevitable choice for companies to maintain normal operations. Recently, several leading new energy companies, including EVE Energy, Chuangming New Energy, BAK Battery, and Tianneng Group, have successively issued price increase notices, which will bring a new round of performance growth to companies in the industry.

Behind the apparent rise in raw material costs lies strong support from an unexpected surge in downstream market demand, which is the core driving force behind this round of lithium iron phosphate (LFP) price increases—the two core sectors of new energy vehicles and energy storage.

Compared to lead-acid batteries, LFP batteries have significant advantages in performance, economy, and environmental friendliness, and have become the mainstream technology in new energy vehicles, light-duty power systems, and energy storage systems, possessing strong irreplaceability. With the new national standards imposing higher requirements, the future market potential for LFP batteries is even more considerable.

In the power battery sector, LFP has already established a dominant position. From January to November 2025, sales of LFP power batteries in my country surged by 66.9% year-on-year, with its market share climbing to 72.8%. This growth trend is highly synchronized with the strong performance of the new energy vehicle market, where domestic new energy vehicle production and sales both increased by over 31% year-on-year during the same period, directly driving the surge in power battery demand.

The demand growth in the energy storage market is even more rapid, becoming another important engine driving the demand for LFP. According to predictions from the Gaogong Industry Research Institute for Energy Storage, China's energy storage lithium battery shipments will grow by over 75% in 2025. It's worth noting that energy storage batteries almost exclusively utilize lithium iron phosphate (LFP) technology, directly driving demand for upstream materials. Data from relevant associations shows that LFP materials account for as much as 99.9% of the energy storage battery market, making it a crucial cornerstone material for building new power systems.

From "Price War" to "Value War": The Fever of Full Production of Large Cylindrical Batteries

The continued price recovery is driving the upstream and downstream battery industries away from cutthroat price competition and towards a new stage of development centered on value.

Industry-level collaborative breakthroughs have already taken shape. In November 2025, representatives from seven leading domestic lithium iron phosphate (LFP) battery companies gathered in Beijing to discuss the future direction of the industry. The China Chemical and Physical Power Sources Industry Association explicitly advocated at the meeting to rebuild the industry's pricing logic using the cost index as a core reference, fundamentally avoiding vicious competition and laying a solid foundation for the healthy development of the industry.

This direction has already led to positive signals in business operations. Industry analysts generally believe that the benefits of this round of industry recovery will be concentrated more on leading companies with technological advantages, cost control capabilities, and high-quality customer resources.

With the explosive growth in demand driven by both vehicle and energy storage needs, small and medium-sized battery systems are also following suit. Small-capacity, portable, and home energy storage systems are experiencing a new round of iterative growth. Take Chuangming New Energy, a leading established battery company and a major player in the cylindrical battery field, as an example. Recently, it announced a price adjustment for its large cylindrical lithium iron phosphate batteries, clarifying that prices for all its battery products will increase from December 1, 2025. Supporting this price adjustment is its continued high production capacity and order volume—the capacity utilization rate of its Mianyang production base has been consistently high, and its core product, the 32140 large cylindrical lithium iron phosphate battery, is achieving "full production and full sales." According to industry insiders close to the factory, the factory currently has a full order book, busy logistics, and its production line automation efficiency is among the highest in the industry. These details directly demonstrate the strong market demand for large cylindrical batteries.

In the competition among diverse battery technologies, market attention on large cylindrical batteries continues to rise. Industry data shows that global demand for large cylindrical batteries reached hundreds of GWh by 2025. Coupled with the continued growth momentum of small and medium-sized energy power systems, large cylindrical batteries will still have considerable growth potential in the coming years, becoming a crucial force driving the high-quality development of the battery industry.

Faced with rising material costs and differentiated market demand, companies with technological accumulation are building 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-effectiveness, while also featuring uniform heat dissipation and high safety. This battery can operate stably in a high-temperature range of 60℃, making it highly suitable for the small-power and user energy storage markets in Southeast Asia and tropical regions. This technological advantage directly translates into a market advantage. The company's products have been exported in batches to markets in the Middle East, Europe, and India, ranking among the top in the industry in overseas competition.

Future Outlook: Technology Diversification and Market Segmentation in Parallel

Currently, the battery industry chain is undergoing a period of dual transformation: structural adjustment and technological iteration. Besides large cylindrical batteries, multiple technological routes, including semi-solid-state, all-solid-state, and sodium-ion batteries, are developing in parallel and accelerating their breakthroughs.

For large cylindrical batteries, although they still face core challenges such as production efficiency and product consistency, their unique advantages in energy density and structural stability are leading to a continuous expansion of their application scenarios. They have deeply penetrated high-end electric vehicles, residential energy storage, and portable energy storage, and are beginning to emerge in emerging sectors such as eVTOL. With the continuous advancement of material system upgrades and production process optimization, large cylindrical batteries are expected to further unleash market potential and play a more crucial role in areas such as light vehicles and energy storage systems.

The industry's prosperity is also undergoing structural reshaping. Some securities analysts point out that the current price increase of lithium iron phosphate batteries has solid fundamental support, and the long-term development trend of the industry is positive. Other lithium battery company representatives stated that current downstream demand remains strong, and the price adjustment triggered by cost transmission is essentially a rational return to industry value.

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