The Battery Chronicle Briefing #1: 2025 Recap and Q1 2026 Analysis

Key Takeaways

• Global EV sales topped 20 million units in 2025
• Lithium‑ion demand exceeded 1.5 TWh across all applications
• CATL operated near full capacity while Korean rivals ran at ~50%
• Western battery startups like Northvolt and Li‑Cycle collapsed in 2025
• China announced nearly 1 TWh of new battery capacity in early 2026

Pulse Analysis

2025 marked an unprecedented surge in battery demand, driven primarily by a record 20 million plug‑in electric vehicles sold worldwide. This demand translated into over 1.5 TWh of lithium‑ion consumption, spanning automotive, grid‑scale storage, and consumer electronics. Yet the rapid expansion exposed a stark scale gap: only manufacturers capable of mass production could capture market share, while smaller players struggled to secure financing and supply contracts. The result was a wave of failures among Western startups that had previously attracted billions in venture capital.

Chinese incumbent CATL leveraged its domestic market dominance and aggressive R&D spending to operate near full production capacity, outpacing the Korean Big 3, which collectively ran at roughly 50% utilization. CATL’s fiscal 2025 results highlighted a growing profit margin and a strategic shift that pushed its domestic market share above 50%. Meanwhile, the Korean firms faced overcapacity and slower adoption of next‑generation chemistries, prompting a pivot toward lithium‑iron‑phosphate (LFP) solutions for energy‑storage applications. The contrasting fortunes underscore how government policy, supply‑chain control, and scale economics are reshaping the global battery landscape.

Looking ahead, China’s announcement of nearly 1 TWh of new capacity in Q1 2026 signals an aggressive push to fill anticipated storage demand and to hedge against a domestic EV market that cannot absorb all existing output. With total committed capacity now exceeding projected global needs through 2035, the industry faces a potential oversupply dilemma that could depress prices and intensify consolidation. Policymakers in the EU and US are responding with regulations such as the EU Battery Passport and US graphite tariffs, aiming to secure supply chains and promote recycling. Stakeholders must monitor how these regulatory frameworks, combined with the capacity surplus, will influence investment decisions and technology adoption in the coming years.