China warns of drop in demand for lithium batteries

Shanghai. Demand for Chinese lithium batteries will likely plummet in early 2026 due to the expected decline in sales of electric vehicles and a slowdown in exports of such components, the general secretary of the Chinese automobile dealers association, Cui Dongshu, said yesterday.

“Demand for batteries will drop sharply from the end of this year, so manufacturers should cut production and take a break to deal with fluctuations,” Cui said in a personal post on social media. China is a world leader in manufacturing and exporting battery technology, and is benefiting from the global rise of hybrid and gasoline-free vehicles, as well as modern power grids. Among the warned manufacturers are Contemporary Amperex Technology and EVE Energy.

In Cui’s opinion, sales of green cars will fall by at least 30 percent by early 2026, as tax incentives for their purchase are being eliminated.

In addition, sales of electric vehicles for commercial use will “definitely” plummet in early 2026, after buyers rushed to purchase fleets at the end of the year to obtain subsidies and tax breaks, he said.

“The loss of domestic demand is unlikely to be offset by exports,” he added.

Chinese exports of lithium batteries to the European Union, its largest foreign market, increased 4 percent in 2025 compared to the previous year, “and exports to the United States fell 9.5 percent, suggesting that the growing demand for cleaner energy storage due to the rise of artificial intelligence in that country is not increasing demand for Chinese lithium batteries,” the executive said.