China Power Battery Output Rising, EV Demand Improving but Competition Intensifies

Overview

This report is a Jefferies monthly chart pack on the China power-battery industry. It mainly covers May 2026 output, shipments, installations, inventories, prices and competitive structure, and combines it with ICCSINO's July 2026 production-schedule outlook for major battery companies. The core narrative is that improved EV demand is driving a sequential recovery in power-battery metrics, LFP output and medium-to-long-term growth remain relatively strong, while ESS sequential momentum is weak, prices are expected to stabilize, and top-tier company shares are diverging.

Core views

Jefferies' key views include: first, July scheduling suggests major power-battery players are showing moderate sequential growth rather than a sharp seasonal rebound, with LFP performance remaining stronger than NCM; second, stronger EV demand in May lifted shipments and installations, with NCM contributing more to sequential output recovery while LFP still has faster year-over-year growth; third, battery and key material prices are broadly stable overall, with only cathode and electrolyte expected to rise modestly; fourth, the competitive landscape is becoming more dispersed, with CATL under pressure in NCM and EV-related shares, while LGES, Sunwoda, Gotion High-Tech and Eve Energy benefit in certain subsegments.

Analysis framework

The report uses a monthly data-tracking framework, combining China power-battery output, shipments, installations, segmented material structure, application mix and share data released by CABIA with ICCSINO's company scheduling and price samples, and uses sequential changes, year-over-year changes, cumulative 5M26 year-over-year, and share changes to assess demand momentum, inventory pressure, price trends and competitive structure.

Methodology notes

• Industry monthly trackingOutput-shipments-installations-inventory framework

  Judges demand and supply rhythm by jointly using output, shipments, installations and the shipment-to-installation inventory ratio.

  The report combines production-side, sales-side and installation-side data, with particular attention to the signal that the EV battery shipment-to-installation inventory ratio has come down from a high level but remains above the historical average.

• Competition analysisMarket-share decomposition

  Breaks down battery-company share by dimensions such as LFP/NCM, PV/CV, EV/ESS.

  The report not only tracks total share, but analyzes share shifts for CATL, BYD, CALB, Gotion High-Tech, Eve Energy, Sunwoda and LGES across material systems and application scenes.

• Price and profitability watchBattery and material price trend

  Assesses margin pressure by examining changes in battery prices and upstream material prices.

  ICCSINO samples indicate that in July 2026, LFP and NCM battery prices are expected to remain broadly stable sequentially, while cathode and electrolyte prices are expected to rise 1.8%-3.2% and anode and separator prices are expected to remain stable.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• CATL / Contemporary Amperex Technology-A

  Core leader and share-monitoring target

  Strengths

  5M26 expected sequential LFP/NCM battery output growth of about +67%/+25% year-over-year; still has share support in some dimensions such as PV.

  Weaknesses

  Total share declined 0.5 percentage points sequentially in May 2026, with NCM share down 8.2 percentage points sequentially; CV share still faces competition from lower-tier players.

  Comparison

  Compared with LGES, Sunwoda, Gotion High-Tech and Eve Energy, CATL's share changes are more scrutinized in some subsegments.

  Risks

  Intensifying competition, declining NCM share, inventories above average, and margin pressure under stable pricing.

• BYD

  Representative of LFP scheduling growth in the vehicle and battery chain

  Strengths

  BYD's July 2026 LFP scheduling is expected to rise about 12% sequentially, making it one of the most prominent growers among major players.

  Weaknesses

  The report notes BYD as one of the main year-over-year share losers in 5M26.

  Comparison

  STRONG in July LFP scheduling versus most peers, but share trend is less favorable than some share-gaining players.

  Risks

  More fragmented competitive structure, share loss, and volatility in EV end-market demand.

• Gotion High-Tech

  Beneficiary in LFP and CV share segments

  Strengths

  July 2026 LFP scheduling is expected to rise about 1.5%-4.2% sequentially; cumulative 5M26 LFP output expected to rise about +91% year-over-year, and share gains were seen in the CV segment.

  Weaknesses

  NCM battery output is expected to decline, with uneven performance in material mix.

  Comparison

  Performs well with Eve Energy in the CV segment, but is weaker than Eve Energy in NCM.

  Risks

  Declining NCM, competitive pressure under stable pricing, and competition from lower-tier players.

• Eve Energy

  LFP growth and NCM resilience candidate

  Strengths

  Expected cumulative 5M26 LFP output growth of about +76% year-over-year and NCM output expected to rise about +170% year-over-year; achieved share gains in the CV segment.

  Weaknesses

  July 2026 NCM scheduling is expected to decline 4.8% sequentially, and the report says CV share is still under year-over-year share-loss pressure.

  Comparison

  NCM year-over-year growth is better than Gotion and CALB, but short-term scheduling is weaker than CATL/CALB.

  Risks

  Short-term NCM scheduling pullback, share volatility, and intensified industry competition.

• LGES

  Global and China EV battery competitor

  Strengths

  Among the largest sequential share gains in May 2026, mainly driven by the PV segment.

  Weaknesses

  The report does not provide detailed evidence of LGES's China profitability or pricing advantage.

  Comparison

  Shares with Sunwoda as one of the firms with relatively noticeable sequential share gains in May.

  Risks

  Intense competition in China and local peers' price and supply-chain advantages.

• Sunwoda

  China power-battery share-gaining company

  Strengths

  Clear sequential share gains in May 2026, mainly from the PV segment.

  Weaknesses

  Still listed in 5M26 as one of the main year-over-year share losers, indicating that the improvement may need to be verified for persistence.

  Comparison

  Short-term share improvement similar to LGES, but mid-term share trend remains unstable.

  Risks

  Sustainability of share gains, customer mix, and price competition.

• LFP batteries

  Core technology route with faster growth

  Strengths

  LFP output in May 2026 rose about +62% year-over-year and cumulative 5M26 about +56%; in July, most major players' LFP scheduling increased sequentially.

  Weaknesses

  Sequential growth in May was only modest, around +2%, with weaker short-term elasticity than NCM.

  Comparison

  Faster year-over-year growth than NCM, but in some months sequential improvement was led by NCM.

  Risks

  Stable prices, volatility in material costs, and margin pressure from capacity expansion.

• ESS batteries

  Energy storage demand chain

  Strengths

  ESS shipments in May 2026 rose about +53% year-over-year, with cumulative 5M26 year-over-year about +88%; domestic cumulative 5M26 year-over-year +110%.

  Weaknesses

  Sequentially in May 2026, ESS shipments were roughly flat, while exports declined 19% sequentially.

  Comparison

  Higher year-over-year growth than EV batteries, but weaker short-term sequential momentum than EV batteries.

  Risks

  Volatility in overseas orders, sequential decline in exports, and potential domestic growth slowdown.

Key data

• May 2026 China power-battery outputSequential +4%, year-over-year growth remains above 55%; cumulative 5M26 year-over-year about +52%Sequential improvement was mainly led by NCM, while LFP still has a faster year-over-year growth rate than NCM.
• May 2026 LFP power-battery outputSequential about +2%, year-over-year about +62%; cumulative 5M26 year-over-year about +56%LFP remains the faster-growing chemistry.
• May 2026 NCM power-battery outputYear-over-year about +31%; cumulative 5M26 year-over-year about +37%The report believes sequential improvement may be related to improved overseas EV sales.
• May 2026 China power-battery shipmentsSequential +11%, year-over-year +47%; cumulative 5M26 year-over-year +48.5%EV battery shipments were the main driver of sequential growth; ESS battery shipments were roughly flat sequentially.
• May 2026 EV battery shipmentsSequential +16.6%, year-over-year +45%; cumulative 5M26 year-over-year about +35%Domestic EV battery shipments rose +20.5% sequentially, while exports were broadly flat.
• May 2026 EV battery installationsSequential +15%, year-over-year about +26%; cumulative 5M26 year-over-year +7%LFP installations recovered to +6% year-over-year, while NCM installations accelerated to +13% year-over-year.
• EV battery shipment/installation inventory ratio1.7xLower than earlier, but still above the 1.3x average, indicating inventory de-gassing pressure has not fully normalized.
• May 2026 ESS battery shipmentsYear-over-year about +53%; cumulative 5M26 year-over-year about +88%Domestic ESS shipments show cumulative 5M26 year-over-year +110%, while overseas ESS shipments show cumulative 5M26 year-over-year +28%.
• July 2026 scheduling outlookMost major players show higher sequential LFP scheduling, with BYD about +12%Eve, Gotion and CALB are expected to rise about 1.5%-4.2% sequentially; excluding BYD, July scheduling does not show pronounced seasonality versus last year.
• July 2026 price outlookLFP and NCM battery prices expected to remain stable sequentiallyCathode and electrolyte prices are expected to rise 1.8%-3.2% sequentially, while anode and separator are expected to remain stable.

Impact & implications

From an investment perspective, the report sends a constructive industry signal: improved EV demand supports the rebound in power-battery shipments and installations, and sustained LFP scheduling supports short-term earnings visibility, while stable prices help margin clarity in the near term. However, because inventory remains above average, ESS lacks sequential acceleration, some upstream material prices are rising, and top-tier shares are diverging, investors need to distinguish companies benefiting from structural growth and share gains from those facing share pressure or margin pressure from limited pass-through.

Risks

• If EV-end demand improvement is not sustainable, the recovery in power-battery shipments and installations could weaken.
• The shipment-to-installation inventory ratio remains 1.7x, above the 1.3x average, so inventory digestion pressure persists.
• Competition in the power-battery market is intensifying, and share dispersion among leading companies could pressure pricing and margins.
• Cathode and electrolyte prices are expected to rise; if battery prices remain stable, this could compress battery makers' gross margins.
• ESS exports were down 19% sequentially in May 2026, and overseas storage demand remains volatile.
• The report has a potential investment-banking conflict-of-interest disclosure; investors should treat it as one input, not the sole basis for decisions.

What to watch

• Whether July 2026 actual scheduling materializes, especially LFP/NCM sub-line changes for BYD, CATL, Eve, Gotion and CALB.
• Whether the EV battery shipment-to-installation inventory ratio can continue to fall from 1.7x toward the 1.3x average.
• Whether CATL continues to lose share in NCM, EV and CV subsegments.
• Whether the share gains of LGES, Sunwoda, Gotion High-Tech and Eve Energy are sustainable.
• Whether LFP and NCM prices can stay stable, and how rises in cathode and electrolyte prices affect battery-cell margins.
• Sequential changes in domestic and overseas ESS shipments, especially whether export returns to growth.
• Whether Chinese NEV sales growth can continue improving from the low 3.5% level in 5M26.