The Zhitong Finance App learned that CITIC Securities released a research report saying that looking ahead to 2027, the overall boom in the lithium battery industry is expected to rise. On the demand side, benefiting from the increase in the electric capacity and pure electric ratio of bicycles in China, the rise in global oil prices and the new vehicle cycle, the high global demand for power batteries is expected to continue; in addition, factors such as rich revenue models and new application fields such as AIDC continue to improve the installed economy of energy storage, and global energy storage has ushered in a stage of development where domestic and foreign demand resonates and rises. On the supply side, the new expansion of production in the battery and midstream materials sector mainly focuses on high-end products and overseas production capacity. The bank expects further improvement in supply and demand in 2027, the overall price of the industrial chain will rise steadily, and high-end products are expected to seize higher technical premiums. Furthermore, the acceleration of industrialization of new types of batteries such as solid-state and sodium-electric batteries is expected to bring investment opportunities in batteries, materials, and equipment. Focus on high-quality leading enterprises in the supply chain with a higher degree of technological differentiation and stronger cost control capabilities.
CITIC Securities's main views are as follows:
New energy vehicles: The penetration rate of electrification continues to increase, and the amount of electricity charged by bicycles continues to grow.
Domestic market: According to data from the China Automobile Association, China's wholesale sales volume of NEVs from January to September 2026 was 12.47 million units, +11.4% year over year. Excluding export sales, the year-on-year decline was about 10%, mainly affected by the increase in car purchase costs due to factors such as rising purchase taxes and raw material prices. From the perspective of penetration rate, the penetration rate of domestic new energy wholesale has increased steadily. In May-September, the penetration rates were 56.9%/58.4%/60.4%/60.6%/61.7%, respectively. The bank expects to reach 60% in 2026. As users pursue range, the battery capacity of domestic NEV bicycles has increased significantly. As of September 2026, the electric charge capacity of new energy pure electric passenger vehicles/hybrid passenger vehicles in China was 43/63.8 kWh, respectively, +46.3%/+13.5% compared to the same period. The bank expects that the increase in the ratio of charged bicycles to pure electric models will further stimulate demand for power batteries.
Overseas markets: According to Marklines data, sales of new energy vehicles in nine European countries from January to August 2026 were 2.57 million units, +35.3% over the same period last year. Since March 2026, due to the US-Iran conflict, crude oil prices have soared and remained high, directly stimulating overseas NEV sales. Combined with the overseas new vehicle cycle that began in 2025, the bank expects European NEV sales to maintain a growth rate of more than 35% in 2026.
Energy storage: Global demand continues to be high, and AIDC is expected to open up incremental space.
Stimulated by energy transformation and economic improvement, global energy storage installed demand ushered in rapid growth, mainly reflected in continued improvements in the domestic economy, continued resilience in US demand, new contributions from AIDC, and accelerated development of large European reserves.
1) Domestic market: With the cancellation of compulsory storage in Document No. 136, the domestic energy storage business model changed from policy-driven to market-driven, and from new energy allocation and storage to independent energy storage, market-based demand opened up the ceiling. According to the WeChat account of Carbon Cable Energy Storage, the WeChat account of the Entropy Research Institute, and CNESA (Zhongguancun Energy Storage Industry Technology Alliance, China Energy Storage Alliance) data, the scale of domestic energy storage registration, bid winning, and grid connection in 2025 was 1595/462/190 GWh respectively, which is very popular. The bank expects domestic energy storage installations to increase by 30%-40% year-on-year in 2027, maintaining rapid growth;
2) US market: According to Wood Mackenzie data, US energy storage will add 51.0 GWh of installed capacity in 2025, +40% compared to the same period last year. Compared with traditional IDC, power fluctuations of computing power cards within AIDC are more common, posing higher challenges to power grids. Grid-structured energy storage can achieve functions such as grid smoothing and power backup. Currently, Fluence and Artes have taken the lead in landing some orders. The bank is optimistic about the gradual release of AIDC storage demand. The installed capacity of US energy storage is expected to increase 30% year-on-year in 2027;
3) European market: According to SolarPower Europe data, Europe added 29.7 GWh of energy storage capacity in 2025, +36.2% over the same period; by region, the share of Eastern Europe Bulgaria increased rapidly in 2025. Currently, Germany, Poland, Spain, the United Kingdom, Hungary and other countries have successively introduced energy storage subsidy policies to promote household storage, commercial storage, and large storage equipment. The bank expects Europe's installed energy storage capacity to increase by 50% year on year in 2027;
4) Emerging markets: Currently, the installed base is still low, but benefiting from large-scale project delivery and the increased penetration rate of distributed energy storage, the bank expects the development of emerging markets to accelerate in 2027, with an 80% year-on-year increase in installed capacity.
Batteries: Demand resilience is expected to continue, and overseas shares will continue to rise.
On the demand side, the bank expects global demand for lithium batteries to reach 3180/3960 GWh in 2026/2027, respectively, and will maintain a growth rate of about 25% in 2027. By the end of 26Q2, according to various company announcements, the inventory size of battery sample companies had increased, mainly due to peak season preparation. The number of inventory turnover days was still low. The fixed assets of the industry and the scale of projects under construction were +28.3% compared to the same period, which is quite moderate. All export tax rebates for lithium batteries will be abolished in 2027, and are expected to further drive the pace of export grabbing in the short term; in terms of profit impact, under an extremely pessimistic scenario, it is expected that the cancellation of export tax rebates will affect the net interest rate of battery companies' export business by about 5.1%, but the bank believes that the actual impact may be small due to the price reduction of upstream raw materials and the long market response window. In terms of share, Chinese companies have further increased their share in the global power battery market, and they also have an absolute leading edge in the energy storage market.
Lithium battery materials: Profitability is further improved, and technological innovation drives growth.
At the business level, since 2025Q3, midstream lithium battery materials operations have continued to recover: 2026Q2 lithium battery midstream material revenue has increased by about 30% or more year-on-year, and overall profitability has improved dramatically. Among them, lithium-related aspects such as cathodes and electrolytes have been repaired significantly. The improvement in midstream operations has, on the one hand, benefited from the continued rise in downstream demand and on the other hand, the industry's supply and demand pattern has improved markedly. The share of leading companies in most sectors is relatively stable, and the share of leading companies in some sectors has even increased even further. Price pressure is generally less than in the previous two years. From a capital expenditure perspective, supply growth in the materials sector in 2026 is mainly concentrated on leading companies. The bottom companies are limited in capacity expansion under financing restrictions and their own profit constraints. The bank determines that supply in the lithium battery industry is expected to be further cleared.
New scenario: Solid-state and sodium electricity are being iterated at an accelerated pace, and battery recycling is expected to start the pace of discharge.
The emergence of new scenarios is driving the industrialization of solid-state batteries and sodium batteries: semi-solid-state batteries have been used on a large scale in the consumer and energy storage markets. On the power side, semi-solid/all-solid state breakthroughs are expected in 2027. Furthermore, the acceleration of solid-state battery industrialization is expected to spawn technological innovation in core incremental links such as solid electrolytes, as well as opportunities for iterative upgrading in other areas such as cathodes, anodes, diaphragms, fluid collectors, and auxiliary materials. Finally, as decommissioned batteries continue to be released and regulations become stricter, the bank believes that the inflection point in the battery recycling industry will also accelerate.
Risk factors:
Demand for new energy vehicles fell short of expectations; energy storage capacity fell short of expectations; increased industry competition and the risk of deteriorating pattern; anti-globalization intensified, overseas business expansion fell short of expectations; risk of large fluctuations in upstream raw material prices; new technology customer verification and production capacity investment fell short of expectations; China's NEV industry policy changed beyond expectations.
Investment Strategy: Looking ahead to 2027, the overall supply and demand of the lithium battery industry is expected to continue to improve
On the demand side, benefiting from large domestic battery demand+the share of pure electric models and high overseas fuel prices and model cycles, the boom in global power battery demand is expected to continue; in addition, factors such as rich revenue models and new application fields such as AIDC will continue to improve the installed economy of energy storage, and global energy storage will usher in a stage of development where domestic and foreign demand resonates and rises.
The expansion of production in the supply-side, battery and midstream materials sectors is mainly focused on high-end products and overseas markets. The bank expects further improvement in industry supply and demand in 2027, a steady recovery in industrial chain prices, and high-end products are expected to seize higher technological premiums. Furthermore, the acceleration of solid-state battery industrialization is expected to bring investment opportunities in batteries, materials, and equipment.
Focus on high-quality leading enterprises in the supply chain with a higher degree of technological differentiation and stronger cost control capabilities. 1) New energy vehicles and energy storage application end; 2) Tri-electric and lithium battery midstream links.