EV Lithium Battery Demand Expected to Decline in 2026

KatadataOTO – Approaching the new year, the automotive industry is immediately faced with various challenges. For example, the demand for lithium batteries.

It is mentioned that sales of these power storage units are predicted to drop sharply in early 2026.

“Approaching 2026, battery demand will drop drastically starting at the end of this year,” said Cui Dongshu, Secretary General of the China Passenger Car Association to Reuters, Tuesday (30/12).

According to Dongshu, there are several reasons why the demand for lithium batteries could decline. Such as the decrease in sales of electric cars in the domestic market.

Photo: MG

This has a significant impact on the power storage industry. The effect could disrupt the lithium battery business.

“Battery manufacturers must reduce production and take a brief pause to cope with these fluctuations,” he continued.

Furthermore, it is said that the situation above will have many effects. Such as losses at lithium battery factories in China.

Including what will be experienced by Contemporary Amperex Technology (CATL). It will also affect Eve Energy.

On the other hand, Dongshu revealed that Electric Vehicle (EV) sales in China are predicted to fall by up to 30 percent in early 2026.

Considering that electric car purchase incentives are being gradually phased out by each provincial government.

Then, the commercial electric vehicle market is also projected to be disrupted. This is because many people will rush to buy EVs in December 2025 to take advantage of the window to still receive subsidies.

However, the decline is only occurring in the domestic market. Meanwhile, exports are actually showing an increase.

Obstacles Still Await

As previously reported by KatadataOTO, electric car consumers must be prepared to spend more in 2026. This is because the price of raw materials for lithium batteries is set to rise.

“The price increase is due to rising upstream raw material costs and a surge in demand driven by the convergence of the global energy transition,” reads a report from Carnewschina.