Saying Goodbye to "Wild Growth": Yu Cong Zeng, Tianren Zhang, and Liangbin Li Prescribe Solutions for China's Lithium Battery Industry

From ground level to low altitude, from liquid to solid, from domestic to global, the lithium battery industry is entering a new era of development.

Hua Xia Energy Network has observed that during the 2026 National Two Sessions, lithium batteries once again became a frequently mentioned keyword among representatives and committee members. But this time, the focus of discussion has quietly elevated: not just expanding size, but strengthening capabilities; not only talking about production volume, but also standards, data, and rule-making dominance; not just reflecting on past achievements, but focusing on new opportunities ahead.

Unlike the past few years of rapid capacity expansion narratives, this year’s discussions on the lithium battery industry at the Two Sessions reveal a tone of maturity and sobriety after cycles of growth and correction.

How can the dilemma of overcapacity be resolved? Under global trade barriers, what risks does China face in going overseas with lithium batteries? How to seize the commanding heights of next-generation application scenarios? Proposals and voices from multiple representatives and committee members provide precise insights into China’s lithium industry and point toward solutions.

Innovation and Standards: Competing for Global Lithium Battery Dominance

On the afternoon of March 4, during the first “Committee Member Channel” session of the Fourth Session of the 14th National Committee of the Chinese People’s Political Consultative Conference, CATL Chairman Zeng Yuqun said that from the “11th Five-Year Plan” to the “14th Five-Year Plan,” over the past years, the country has continuously promoted renewable energy development. “This strategic determination has provided a ‘compass’ for industry enterprises and practitioners.”

CATL Chairman Zeng Yuqun

Over the past two decades, China’s lithium battery industry has grown from nothing to something, from lagging behind to leading the charge. From a technical concept in a laboratory, it has developed into a vast industry chain covering mining, materials, batteries, applications, and recycling.

As a leading enterprise aligned with the times, CATL has invested over 80 billion yuan in R&D, with annual R&D spending exceeding 20 billion yuan in recent years; employing over 21,000 researchers; holding more than 50,000 patents; its products are sold in dozens of countries and regions worldwide, supporting over 20 million new energy vehicles, and serving more than 3,000 energy storage stations.

Behind these figures is the company’s relentless pursuit of technological innovation. Zeng Yuqun stated that the industry’s most important aspect is not just the layout of the supply chain and ecological chain, but “most importantly, persistent independent innovation. We cannot stay at the current model.”

So, how to break the existing pattern? Where should innovation focus? Zeng Yuqun identified five key areas: new materials, new chemical systems, new structural systems, new energy systems, and new manufacturing systems—namely intelligent manufacturing. He especially emphasized the need to “use more artificial intelligence methods” to increase R&D investment.

Additionally, Zeng Yuqun stressed that China’s products should be sold worldwide, and more importantly, “technology and standards” should be promoted globally.

However, after rapid advances in technology and standards, Chinese lithium batteries face the “iceberg” of global trade rule battles and non-market, irrational competition. Frequent US tariffs, the implementation of the EU’s “New Battery Law,” have brought compliance costs, data sovereignty, and full-chain traceability to the forefront, becoming obstacles for Chinese companies going abroad.

Deputy to the National People’s Congress and TianNeng Holding Group Chairman Zhang Tianren explicitly proposed establishing a Chinese version of the “Battery Act” covering multiple categories such as lithium batteries and lead-acid batteries, to break down industry data barriers, promote green and intelligent upgrades, and safeguard national industrial and data security.

TianNeng Holding Group Chairman Zhang Tianren

Zhang Tianren pointed out that although China has piloted the construction of an “battery ID” information system and some leading companies have established internal traceability systems, overall progress still faces significant shortcomings: top-level design is incomplete, cross-department coordination needs strengthening; participation across the entire industry chain varies, with some companies still in passive compliance; existing group standards lack authority and binding force, urgently needing upgrade to national or industry standards; digitalization of different battery categories is uneven, and international recognition mechanisms are lacking, posing substantial implementation challenges.

He suggested advancing solutions from four dimensions: improving coordination mechanisms, establishing a sound institutional system; accelerating standard development and deepening pilot applications; strengthening international engagement and leading rule-setting; integrating advantageous resources and focusing on collaborative breakthroughs.

In his view, “building a digital ID system for new energy batteries covering all categories and lifecycle stages is a strategic foundation related to high-quality industry development and the creation of new national competitive advantages.”

Technology and Scenarios: Grasping the New Opportunity of Solid-State Batteries

The competition over innovation and standards is a soft game, but the race for next-generation battery technology is a hard-core contest.

It is well known that the energy density and safety performance of liquid lithium batteries are approaching physical limits. The hope for further iteration lies in solid-state batteries.

“China’s solid-state battery industry has entered a critical stage from technological breakthroughs to exploring large-scale mass production,” said Deputy to the National People’s Congress and Delixi Group Chairman Hu Chengzhong. He noted that significant progress has been made in policy support, technological R&D, and industrialization.

Delixi Group Chairman Hu Chengzhong

Some institutions predict that China’s solid-state battery shipments could exceed 65 GWh by 2030, and further expand to over 300 GWh by 2035.

However, Hu Chengzhong is not blindly optimistic about the prospects. He directly pointed out several industry pain points: the investment intensity of full solid-state battery production lines is several times that of traditional lithium battery lines, with high equipment costs; product certification cycles take 2–3 years, far exceeding enterprise R&D iteration cycles; standards are inconsistent, and battery specifications are numerous, leading to rising adaptation costs.

Beyond high costs, slow certification, and chaotic standards, supply chain risks are also critical. Hu Chengzhong highlighted that the industry chain’s lack of coordination and weak autonomy—upstream reliance on imported ultra-high purity raw materials and high-end testing equipment, monopolized by Japanese, Korean, and US companies; midstream shortages of solid electrolyte capacity and high prices of core materials drive up manufacturing costs; downstream applications are highly concentrated in new energy vehicles, with insufficient market validation in other fields.

He offered five suggestions: accelerate the formulation and implementation of national standards for automotive solid-state batteries; focus on core technologies like electrolyte materials, interface modification, and dry electrode processes, supporting enterprises and research institutions to form innovation alliances; cultivate leading companies in the industry chain to create a collaborative ecosystem; optimize fiscal and financial policies to guide social capital into the solid-state battery industry; and carry out demonstration projects in key areas such as new energy vehicles, energy storage, and electric aviation.

In terms of application scenarios, low-altitude economy is one of the most promising. Some institutions predict that by 2035, China’s low-altitude economy market could reach 3.5 trillion yuan.

“Now is the window period for low-altitude flight from technological R&D to industrialization,” said Li Liangbin, Chairman of Ganfeng Lithium, a deputy to the National People’s Congress. He pointed out that propulsion systems for eVTOLs and large drones face far more demanding requirements than ground vehicles. This tests not only energy density and discharge rates but also the reliability of batteries under extreme conditions like thunderstorms, high altitudes, low temperatures, and high wind speeds.

Ganfeng Lithium Chairman Li Liangbin

Li Liangbin noted that while commercialized eVTOL batteries currently have energy densities above 300 Wh/kg, meeting initial demonstration needs, achieving economical urban air mobility requires further advancement. Existing standards cannot fully cover the harsh operating conditions of aircraft.

He proposed five measures: strengthen top-level design and planning coordination; enhance industry-university-research cooperation to accelerate high-performance battery R&D; establish a comprehensive industry standard system; provide fiscal, tax, financial, and talent policies to build an industrial ecosystem; ensure supply chain security and promote recycling of key elements.

Overcompetition and Overcapacity: Calling for a New Industry Ecosystem

High prosperity in the industry can sometimes mask cracks. Although signs of recovery in lithium batteries, especially in energy storage, are more evident compared to the first half of 2025, issues of overcompetition and excess capacity remain severe. Data shows that planned capacity for power batteries exceeds 150%, and for energy storage cells over 300%.

Zhang Tianren clearly stated, “Currently, there is a serious phenomenon of ‘everyone rushing in and scattering,’ with volatile raw material prices, which impacts the stable development of the entire industry.” If these problems are not properly addressed, the industry’s positive momentum could be shattered.

He sees this disorderly competition as a systemic risk: some companies monopolize upstream and downstream resources, forming industry chain monopolies, and bid in projects at prices below cost, creating a vicious cycle of “low-price dumping—profit decline—quality shrinkage”; others cut safety features, falsify parameters, or use inferior cells to reduce costs, posing major safety hazards.

Hua Xia Energy Network notes that over the past three years, energy storage system prices have plummeted by 80%, with some bids falling below industry cost thresholds. For example, the average price of 314 Ah cells was about 1 yuan/Wh in early 2023, dropping to as low as 0.28 yuan/Wh by mid-2025.

Zhang Tianren revealed that such price competition led to the exit of over 30 small and medium integrators in the first half of 2025, with profit margins of leading companies falling below 3%.

“This irrational competition forces some companies to compromise on cell quality, system integration, and safety redundancy, sacrificing reliability and safety to gain short-term market share, which severely hampers healthy and sustainable industry development,” he said.

Regarding solutions to industry “overcompetition,” Zhang Tianren proposed systematic measures: establish dynamic capacity regulation systems, with relevant government departments monitoring nationwide battery capacity, utilization, and market demand via big data, and issuing regular overcapacity warning indices; raise market entry thresholds, banning low-level capacity from entering; promote industry mergers and reorganizations to increase concentration; improve energy storage bidding systems by incorporating lifecycle costs, long-term reliability, safety redundancy, and other core value indicators into scoring, to cut off the “bad money drives out good” phenomenon from the demand side.

With explosive growth in energy storage and new energy vehicles, safety remains a top concern, frequently discussed by delegates and committee members at this year’s Two Sessions.

Deputy to the National People’s Congress and Taihe New Materials Group Chairman Song Xiquan emphasized that materials are the foundation of industry, and many safety hazards at the application end ultimately originate from the material source.

Taihe New Materials Group Chairman Song Xiquan

He called for further improvement of lithium battery safety standards and industry norms, promoting unified testing standards, especially clarifying key parameters like needle penetration tests, and establishing quantifiable, comparable testing systems. He also suggested setting up special science and technology innovation funds to promote demonstration applications of high-safety materials (such as high-performance aramid separators), achieving systematic breakthroughs in intrinsic safety technology at the cell level.

“Only by preventing thermal runaway from the material source can we fundamentally improve battery safety, extend passenger escape time, and ensure public confidence,” he said.

From the past pursuit of volume and installed capacity to now focusing on core technology, industry standards, and safety at all levels, China’s lithium industry is undergoing a profound “transformation.” The proposals from Two Sessions representatives and committee members are targeted remedies for current industry pains, maps for China to master the global new energy discourse, and the driving force to help Chinese lithium batteries emerge from their cocoon.

The transformation of China’s lithium industry is not achieved overnight, nor is it an easy path. Building a healthy industry ecosystem requires joint efforts from policy and enterprise sides. Moving from “scale-led” to “quality-led,” Chinese lithium industry players must maintain strategic resolve, abandon short-sighted profit chasing, and, from the perspective of the global energy revolution, contribute a more reliable, cleaner, and more economical Chinese solution to reshape the global new energy landscape.

Author’s note: Personal opinions are for reference only.