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SMM, September 18: This week, domestic scrap battery prices were basically stable, with limited overall fluctuations. At the start of the week, lead prices fell sharply, and smelters generally lowered their purchase prices by 50-100 yuan/mt. Suppliers sold in panic, and scrap battery raw materials arrived at plants in concentrated volumes. Mid-week, lead prices stabilized, panic selling subsided, and arrivals returned to normal. At the end of the week, after the US Fed's rate hike landed, lead prices rebounded and reclaimed the 16,000 level. Mainstream quotations for scrap batteries turned stable, with price-guaranteeing smelters extending their guarantees and only a few rebounding by 50-100 yuan/mt. Suppliers' selling sentiment diverged, with about half turning to hold back from selling and adopting a wait-and-see stance. Overall, smelter arrivals this week showed a "pulse at the start of the week, returning to normal after mid-week" pattern. Additionally, after the concentrated arrival of raw materials, many smelters' raw material inventories were already full, and the pace of purchasing and price adjustments slowed down. Recyclers maintained a fast-in, fast-out buying and selling model from the start of the week to mid-week. After lead prices rebounded at the end of the week, sentiment diverged, with about half turning to hold back from selling and waiting for further price increases. Downstream, some battery plants had already completed their dual-festival stockpiling at low lead prices mid-week. In the short term, scrap battery prices are expected to stabilize along with lead prices or see slight upward movement. Key areas to watch include the sustainability of the lead price rebound, smelters' purchasing and price adjustments after inventory digestion, the extent of supply release amid recyclers' reluctance to sell, and the pace at which downstream battery plants begin winter stockpiling.

Recently, end-use consumption in the lead-acid battery market has remained relatively stable. Dealers continued to receive earlier orders, and e-bike and automotive battery enterprises have successively ended their battery sales promotions, with battery selling prices rising. Additionally, the slow delivery issue at some e-bike lead-acid battery producers persists, and the promotional atmosphere in the battery wholesale market is gradually fading. On the producer side, due to the decline in lead prices, most downstream enterprises have been stockpiling lead ingots, and spot market transactions have improved significantly. Besides purchasing spot cargo, some downstream enterprises have pre-purchased October lead ingots, fulfilling stockpiling expectations for the Mid-Autumn Festival and National Day holidays.

According to SMM data, the weekly comprehensive operating rate of lead-acid battery producers across five provinces in China stood at 72.05% during September 11-17, 2026, up 1.65 percentage points WoW. Since September, lead-acid battery producers have seen steady production growth, with weekly operating rates trending higher. On one hand, seasonal improvement in end-user demand in the lead-acid battery market has driven producers to ramp up production. On the other hand, from August to September, e-bike and automotive battery enterprises widely implemented sales promotions on finished batteries, with some enterprises continuing promotions into early September. Dealer procurement increased, and producers ramped up production to deliver earlier orders. Operating rates at medium and large enterprises gradually rose to 80-100%.

SMM, September 18: On September 15, the Ministry of Industry and Information Technology (MIIT) and the National Development and Reform Commission (NDRC) jointly issued the "15th Five-Year Plan for the Development of the Electronic Information Manufacturing Industry." Most market attention was drawn to two headline figures—revenue of large-scale enterprises exceeding 30 trillion yuan by 2030 and R&D intensity of 3.5%. But in SMM's view, what carries real information for the sodium-ion battery industry chain is the passage of fewer than 100 words in the "new-type battery" column:   ...R&D and industrialisation of low-cost, long-life sodium-ion batteries. Six words, with the emphasis on "low-cost." This is not a modifier; it is a positioning. I. Why "low-cost, long-life" rather than "high specific energy" or "high safety" The adjectives the plan attaches to the three technology routes—lithium batteries, solid-state batteries, and sodium-ion batteries—are telling: lithium batteries get "high safety," solid-state gets "high specific energy," and only sodium-ion batteries receive the less glamorous-sounding "low-cost, long-life." SMM believes this is precisely the plan's most honest pricing of sodium-ion batteries: the energy density ceiling of sodium-ion batteries is lower than that of LFP, and current technology has no claim to the "high specific energy" narrative; the thermal stability of sodium-ion batteries is inherently far superior to that of liquid lithium batteries, but this is not its scarcest selling point at present; the only card it can bring to market competition is cost per kWh benchmarked against LFP—and this is exactly the fundamental reason the plan uses the word "low-cost." In other words, the plan has already written sodium-ion batteries' competitor into its adjectives. Its competitor has never been solid-state; it is LFP. II. The consumption tax exemption is an "economic insurance policy," but the policy has an expiry date Whether sodium-ion batteries can survive independently of subsidies before the policy window closes at the end of 2028 is the most pressing question for the industry chain right now. This question can be broken down into two accounts. The first account: tax. According to the battery consumption tax framework previously announced by three ministries, lithium-ion batteries have been subject to a 2% tax rate since September 1, 2026, rising to 4% from September 1, 2027; sodium-ion batteries, solid-state batteries, fuel cells, and other categories are exempt until December 31, 2028. Consumption tax is a price-inclusive tax and is directly counted into costs. For China's lithium battery manufacturing segment, where margins are already thin, this is a new variable that must be absorbed; for sodium-ion batteries, however, the tax exemption window covers exactly the critical ramp-up stage from GWh-level delivery to scale-up. The second calculation: lithium prices. According to SMM data, the SMM battery-grade lithium carbonate index fell from 159,137 yuan/mt on September 1 to 133,148 yuan/mt on September 17, a drop of about 16.3% in half a month; over the same period, the lowest spot lithium carbonate price fell from 158,000 yuan/mt to 128,000 yuan/mt, with the high-low spread widening to more than 10,000 yuan/mt at one point. Based on roughly 550 mt of lithium carbonate consumed per GWh of LFP, every 10,000 yuan/mt change in lithium prices corresponds to a change of about 5.5–6 yuan/kWh in LFP battery cell cost; this round's pullback of about 26,000 yuan/mt theoretically frees up cost space of about 14–16 yuan/kWh for LFP battery cells. When these two calculations are considered together, the conclusion is not "stable":   The cost dividend that consumption tax exemption gives sodium-ion batteries and the cost space that this round of lithium price declines returns to LFP (14–16 yuan/kWh) are of the same order of magnitude. The judgment SMM wants to emphasize is this: the economics of sodium-ion batteries have never been a "sure win," but rather a race that requires continuous catching up—every step lithium prices move downward, sodium-ion batteries must rely on material cost reductions to push their cost curve down another step. This is also the fundamental reason why the plan places "low cost" ahead of "long life": the moat for sodium-ion batteries can only be dug from materials, not borrowed from policy. III. Hard carbon is the real ceiling for sodium-ion batteries If one looks only at policy, the path for sodium-ion batteries is already clear; but when SMM's production data are laid out, a harder constraint emerges. First, look at growth rates. According to SMM statistics, anode growth is clearly faster than cathode growth, indicating that the localisation of hard carbon is accelerating—shifting from reliance on imported coconut shell-based raw materials toward diversified precursor routes such as bamboo-based biomass. Next, look at unit consumption and supply. 1 GWh of sodium-ion battery requires about 1,500 mt of hard carbon anode, while global annual supply of coconut shell-based hard carbon is less than 80,000 mt. Although the plan does not single out anode materials, SMM believes that whether sodium-ion batteries can deliver on "low cost" ultimately depends on whether hard carbon can deliver on "low cost"—the slope of the hard carbon cost curve determines whether sodium-ion battery cell costs can move further down from the current level of about 0.5 yuan/Wh during 2027–2028. The growth gap between cathode and anode also means that this year's capacity deployment is centered on the anode side. In the next stage, the most critical variable in the sodium-ion battery industry chain is not which battery cell manufacturer has signed another energy storage order, but the pace at which hard carbon unit prices move downward. IV. The Market Has Already Voted—Polyanion Cathodes Dominate Overwhelmingly A further breakdown of SMM's production structure reveals that the divergence in sodium-ion battery technology routes has already become very pronounced. In August 2026, the polyanion route accounted for nearly 90% of production. This is no accident. Polyanion cathodes (typically derivatives such as sodium vanadium phosphate and sodium iron phosphate) are clearly superior to layered oxides in terms of cycle life, wide operating temperature range, and thermal stability; layered oxides, on the other hand, offer energy density closer to that of LFP, but their shorter cycle life constrains their application in high-frequency scenarios such as energy storage. The overwhelming dominance of the polyanion route directly corresponds to the downstream choice of energy storage, rather than power batteries. At this point, it can be stated more bluntly: the six words "low cost, long life" in the plan have, in fact, already been voted on by the market through its production structure. Polyanion cathodes paired with hard carbon anodes are the concrete embodiment of those six words. V. An Account No One Is Calculating Today, but Must Be Calculated After 2028 In the section on supporting industry chains, the plan proposes continuously improving the retirement and recycling system for lithium batteries and PV modules, and promoting high-value, standardized circular utilization of battery materials. This line carries two layers of implications for sodium-ion batteries, both more far-reaching than they appear. In the short term, it is structurally bearish. Lithium-ion batteries have been included in the scope of consumption tax for the first time, but the concurrent standardization of the recycling system will bring more stable supply of secondary lithium and secondary nickel-cobalt—in the medium term, recycled materials will gradually become the marginal variable in primary supply and influence the lithium price center through the pace of release. This is not good news for sodium-ion batteries, because their relative advantage was originally premised on lithium price uncertainty. In the long term, it is a residual value risk. Sodium-ion batteries contain no lithium, cobalt, or nickel, and in theory are not backed by recycling value—but this also means they lack residual value protection. When the first wave of large-scale sodium-ion battery products begins to retire, residual value handling will become a cost in the full life cycle levelized cost of electricity for sodium-ion batteries that no one is calculating today but must be calculated by then. This account will ultimately fall on operators, turnkey integrators, or recycling enterprises, and it is almost never considered in current project feasibility study reports. SMM reminds: the full life cycle cost assessment of sodium-ion batteries needs to be discussed more seriously than one-time procurement costs. This is the true meaning of the word "low cost" in the plan beyond the policy window—low cost cannot be judged solely by ex-works price; retirement costs must also be considered. VI. SMM's View Based on the policy text, price data, and production structure, SMM offers four judgments on the sodium-ion battery-related statements in the "15th Five-Year Plan": First, what the policy provides is a "technology roadmap," not a "capacity target."The plan does not set installation targets for sodium-ion batteries; instead, it embeds the positioning of "low cost and long life" in its descriptive language. This means that over the next three years, the main investment focus for sodium-ion batteries will be on the materials side (hard carbon anode, polyanion cathode). Second, "low cost" is benchmarked against the per-kWh cost of LFP. The competitor for sodium-ion batteries has never been the high-end capacity of solid-state or liquid lithium batteries, but rather the cost curve of LFP in energy storage and power applications. The wording of the plan has already made this clear. Third, lithium prices matter in the short term, while hard carbon matters in the medium term. The marginal variable for sodium-ion batteries remains the price of lithium carbonate—it determines the strength of their relative cost advantages; the medium-term variable is the capacity and cost curve of hard carbon anode—it determines whether absolute costs can fall below those of LFP. Fourth, the tax exemption window is not a permanent safeguard. December 31, 2028 is the deadline for the consumption tax exemption. Before that date, sodium-ion batteries must push their cost curve down to a level where they can compete independently—once the exemption is withdrawn, the structural weakness of lacking residual value support from recycling will be magnified. The real test for sodium-ion batteries lies not in the period of policy protection, but after the policy is withdrawn. Risk warning: The pace of policy implementation, fluctuations in lithium carbonate prices, the progress of hard carbon anode capacity release, and whether the follow-up consumption tax policy will be extended may all deviate from the above judgments.       SMM New Energy Research Team Wang Cong 021-51666838 Feng Disheng 021-51666714 Lyu Yanlin 021-20707875

In mid-September 2026, CAAM and the China Passenger Car Association successively released relevant data on China's auto market for August 2026. CAAM noted that in August, auto consumption subsidies continued to expand in multiple regions, automaker sales promotions were active, and auto production and sales rose MoM while edging down YoY. The Chinese market remained under pressure, with monthly sales posting a YoY decline of over 20% for the fifth consecutive month. Exports maintained rapid growth, with monthly exports exceeding 1 million units for the third consecutive month.......SMM has compiled the relevant data on the auto and battery markets in August for readers' reference. Automobiles CAAM: August auto production and sales both rose MoM; January-August auto production and sales both surpassed 20 million units In August, auto production and sales reached 2.684 million and 2.712 million units, respectively, up 4.3% and 4.9% MoM, respectively, and down 4.7% and 5.1% YoY, respectively. In January-August, auto production and sales reached 20.255 million and 20.315 million units, respectively, both down 3.8% YoY. CAAM: August NEV production and sales both rose YoY; NEV sales accounted for 52.4% of total new vehicle sales in the first eight months In August, the monthly sales share of NEVs hit another record high. NEV production and sales reached 1.653 million and 1.643 million units, respectively, up 18.9% and 17.8% YoY, respectively. NEV sales accounted for 60.6% of total new vehicle sales. In January-August, NEV production and sales reached 10.668 million and 10.65 million units, respectively, up 10.8% and 10.7% YoY, respectively, with NEV sales accounting for 52.4% of total new vehicle sales. CAAM: Auto exports exceeded 1 million units for the third consecutive month; NEV export share exceeded 50% for the third consecutive month In August, auto exports reached 1.01 million units, down 3.2% MoM and up 65.3% YoY . In January-August, auto exports reached 7.153 million units, up 66.7% YoY. In August, NEV exports reached 526,000 units, down 5% MoM and up 1.3x YoY ; conventional fuel vehicle exports reached 485,000 units, down 1.1% MoM and up 25.2% YoY. In January-August, NEV exports reached 3.435 million units, up 1.2x YoY; conventional fuel vehicle exports reached 3.718 million units, up 34.7% YoY. In terms of export structure, NEV exports accounted for over 50% of total auto exports for the third consecutive month. Regarding the auto market in August, CAAM noted that in August, auto consumption subsidies continued to escalate in multiple regions, automaker sales promotions were active, and auto production and sales rose MoM while edging down slightly YoY. In the Chinese market, pressure persisted, with monthly sales posting a YoY decline exceeding 20% for five consecutive months. Exports maintained rapid growth, with monthly exports surpassing 1 million units for three consecutive months, serving as a key growth driver stabilizing the industry. NEVs continued to consolidate their dominant position, with their monthly sales share reaching a new high. Recently, the State Council executive meeting deployed efforts to address account receivables, explicitly calling for vigorous rectification of the problem of large enterprises delaying payments to small and medium-sized enterprises and for improving industry payment rules. Relevant government departments have actively carried out actions in regulating payment practices, quality improvement, and automakers' go-global conduct. The ongoing deepening of auto industry governance will push the industry from pursuing scale and speed toward quality and safety, supporting the healthy and sustainable development of the sector. The CPCA also released data on the August passenger vehicle market. In August 2026, retail sales of passenger vehicles in China reached 1.541 million units, down 23.6% YoY and up 5.5% MoM. Cumulative retail sales in the first eight months of this year reached 11.716 million units, down 20.8% YoY. In August, the Chinese passenger vehicle market exhibited a trend of "weak overall recovery, strengthening MoM momentum, and extreme structural divergence," with the tail end of the off-season "consolidating at lows and building momentum" as structural industry adjustment deepened further. The CPCA forecast team's prediction index for July was 19%, the satisfaction rating for July assessed in mid-August was 17%, and our prediction index for August is 12%, a historically low level. The satisfaction rating expected to be released in mid-September should improve. On the passenger NEV front, production of passenger NEVs reached 1.528 million units in August, up 19.2% YoY and up 5.0% MoM. Cumulative passenger NEV production reached 9.758 million units in January-August, up 9.8% YoY. In terms of NEV exports, passenger NEV exports reached 518,000 units in August, up 154.7% YoY, down 5.0% MoM. They accounted for 58.4% of passenger vehicle exports, up 18 percentage points compared to the same period last year. Among them, pure electric vehicles accounted for 63.4% of NEV exports (66.0% in the same period last year), and A00+A0-class pure electric vehicles, as the core focus, accounted for 56.5% of pure electric exports (45.2% in the same period last year). With the emergence of Chinese NEVs' scale advantages and expanding market demand, Chinese-made new energy brand products are increasingly going global, with their recognition outside China continuing to rise. Among them, narrow-range plug-in hybrids accounted for 32.9% of new energy exports (31.7% in the same period last year), and range-extended vehicles accounted for 3.7% of new energy exports (2.2% in the same period last year). Although there has been some external interference from other countries recently, the number of domestic narrow-range plug-in hybrids exported to developing countries is growing rapidly, with bright prospects. The CPCA stated that in August, the domestic passenger vehicle market showed an operating trend of "weak overall recovery, strengthening MoM momentum, and extreme structural differentiation," with the tail end of the off-season "consolidating at lows and building strength," and the industry's structural adjustment further deepening. In August 2026, auto market retail sales rebounded 5.5% MoM, the result of multiple intertwined and resonating factors, including high oil price suppression, weak macro conditions, rising policy expectations, and the boost from the Chengdu Auto Show. Geopolitical conflicts continued to disrupt shipping through the Strait of Hormuz, pushing international oil prices to consolidate at highs. In 2026, domestic gasoline prices have been raised by more than 1,720 yuan/mt cumulatively, with an increase of 180 yuan since late July in particular, significantly raising the cost of using internal combustion engine vehicles, and domestic demand for ICE passenger vehicles continued to shrink sharply. In August, the manufacturing PMI rebounded 0.6% MoM to 49.8%, still below the 50 mark, with marginal end-user domestic demand recovering but with limited strength. In early-to-mid August, high-temperature holidays suppressed end-user showroom traffic; in late August, the Chengdu Auto Show drove a recovery in market heat; and month-end sales pushes boosted the recovery in daily average retail sales, with end-user orders and showroom traffic showing a pattern of low first, high later. In addition, after the implementation of the new national standard for new energy safety, compliant products were intensively iterated and launched, and the rising technical threshold pushed the industry from "price involution" to "value competition." Coupled with the July Politburo meeting's clear call for stronger fiscal efforts and the continued implementation of policies to expand domestic demand and boost consumption, bottom support was provided for the auto market. Therefore, this round of market decline was a phased structural fluctuation, not a trend deterioration of the industry. Overall, the August 2026 passenger vehicle market showed five distinct characteristics: First, total volume recovered MoM but remained under pressure YoY, with structural differentiation amplified to an extreme. "Deep cooling of fuel vehicles and strong leadership of new energy" became the main market theme, and high oil prices continued to accelerate the pace of "oil-to-electric substitution." Second, fuel vehicles contracted across the board, with August fuel vehicle retail sales down more than 40% YoY, a nearly halved decline, while conventional hybrid models were relatively resilient. Third, the new energy penetration rate continued to break new highs, with August new energy retail sales at 1.005 million units, down 10.1% YoY and up 5.7% MoM, and the penetration rate reaching 65.2%, another record high. Fourth, exports continued to play a bottom-supporting role, effectively stabilizing automakers' wholesale volumes and capacity. In August, producer wholesale volume was 2.353 million units, down only 5.3% YoY and up 4.5% MoM, with the wholesale YoY growth rate 18.3 percentage points higher than retail. Fifth, industry inventory continued to decline, high oil prices significantly impacted fuel vehicles, dealers faced great survival pressure and lacked confidence, and under the domestic pattern of "weak wholesale and weak retail," the channel side remained under pressure. Power battery update From January to August, China's cumulative production of power and ESS batteries reached 1,523.9 GWh, up 57.0% YoY. In August, China's combined production of power and ESS batteries was 237.0 GWh, up 8.8% MoM and 69.8% YoY. From January to August, China's cumulative production of power and ESS batteries was 1,523.9 GWh, up 57.0% YoY. From January to August, China's cumulative exports of power and ESS batteries reached 259.0 GWh, up 49.6% YoY. In August, China's combined exports of power and ESS batteries were 42.4 GWh, up 20.4% MoM and 87.5% YoY, accounting for 19.0% of that month's sales. Of this, power battery exports were 24.7 GWh, making up 58.2% of total exports, up 3.1% MoM and 64.0% YoY; ESS battery exports were 17.7 GWh, making up 41.8% of total exports, up 57.2% MoM and 134.2% YoY. From January to August, China's cumulative exports of power and ESS batteries were 259.0 GWh, up 49.6% YoY, accounting for 18.7% of cumulative sales. Of this, cumulative power battery exports were 171.4 GWh, making up 66.2% of total exports, up 53.7% YoY; cumulative ESS battery exports were 87.6 GWh, making up 33.8% of total exports, up 42.2% YoY. From January to August, China's cumulative domestic power battery installations reached 489.1 GWh, up 17.0% YoY. In August, China's domestic power battery installations were 79.0 GWh, up 5.9% MoM and 26.3% YoY. Of this, ternary battery installations were 11.0 GWh, accounting for 14.0% of total installations, down 1.0% MoM but up 0.9% YoY; LFP battery installations were 67.6 GWh, accounting for 85.6% of total installations, up 7.0% MoM and 31.0% YoY. From January to August, China's cumulative domestic power battery installations were 489.1 GWh, up 17.0% YoY. Of this, cumulative ternary battery installations were 85.6 GWh, accounting for 17.5% of total installations, up 10.6% YoY; cumulative LFP battery installations were 402.7 GWh, accounting for 82.3% of total installations, up 18.3% YoY. Leap Motor's monthly deliveries surpassed 100,000 again in August; BYD's overseas sales continued to hit new highs. At the start of the month, the August report cards for new-energy vehicle startups were released, with Leap Motor showing unstoppable momentum as its monthly deliveries once again exceeded 100,000 units!Specifically: In August, Leap Motor delivered 103,129 units globally, up 80.7% YoY, surpassing the 100,000-unit mark in monthly deliveries once again ; based on recent comparable end-user registration figures, Leap Motor ranked among the top four global passenger NEV brands and the top three Chinese passenger NEV brands. From January to August 2026, Leap Motor delivered a total of 560,883 new vehicles. After exceeding 100,000 monthly deliveries for two consecutive months, Leap Motor moved closer to its previously set annual delivery target, with target completion reaching 56.09%. Meanwhile, according to an article on the company's official WeChat account, in H1 2026, Leap Motor achieved revenue of 38.11 billion yuan, a record high for the same period; net profit reached 210 million yuan, extending its profitability streak with profits for three consecutive half-year periods; Q2 gross margin rose QoQ to 12.6%, with operating quality improving quarter by quarter. XPeng Motors successfully held onto the No. 2 spot this time, with August deliveries reaching 39,107 units, up 4% YoY. According to the company's Q2 financial report, total revenue in Q2 2026 reached 19.74 billion yuan, up 8.0% YoY; vehicle deliveries totaled 103,295 units, up 64.8% QoQ; overall gross margin was 20.7%, up 3.4 percentage points YoY, with operating quality steadily improving. Li Auto, ranked third, delivered 37,679 new vehicles in August. As of August 31, 2026, Li Auto's cumulative deliveries reached 1,801,834 units. Li Auto stated that in H1 this year, it remained the top-selling Chinese brand in the NEV market for vehicles priced at 200,000 yuan and above. The Li Auto i6 ranked among the top three in sales across all car models priced above 200,000 yuan for seven consecutive months, and together with the Li Auto L6, it will help consolidate the company's leading position in the 200,000-300,000 yuan SUV market. As of August 31, 2026, Li Auto had 487 retail centers nationwide, covering 160 cities, and 533 after-sales repair centers and authorized service centers, covering 218 cities. Li Auto had put into use 4,162 Li Auto supercharging stations nationwide, with 22,939 charging piles. NIO delivered 35,836 new vehicles in August, up 14.5% YoY, ranking fifth among leading new energy vehicle startups. In the first eight months of 2026, NIO delivered a total of 262,893 new vehicles, up 57.9% YoY. Among these, the NIO brand delivered 160,670 new vehicles, up 64.5% YoY; the Onvo brand delivered 61,428 new vehicles, up 13.2% YoY; and the firefly brand delivered 40,795 new vehicles, up 180.3% YoY. As of now, NIO has cumulatively delivered 1,260,485 new vehicles. Xiaomi Auto's August deliveries continued to exceed 30,000 units. On September 7, Xiaomi CEO Lei Jun announced that Xiaomi Auto's cumulative deliveries had surpassed 800,000 units. BYD, as the leading domestic EV automaker, also posted impressive August delivery figures. Data shows BYD sold a total of 440,293 new vehicles in August, with overseas sales continuing to set new records, reaching 188,746 units, up 134.6% YoY. From January to August, BYD Group cumulatively sold 266,801 passenger vehicles and pickups, with cumulative overseas sales of 1,157,954 units. Regarding the August auto market, the China Automobile Dealers Association noted that August showed a low-then-high trend. The first third was weak due to high-temperature holidays and typhoon rainfall, while the middle third saw pent-up demand released and improved end-user traffic. In the final third, the Chengdu Auto Show opened with concentrated new vehicle pre-sales, and local subsidies provided support, slightly lifting market sentiment. However, compared to the same period last year, the overall market still declined, with the traditional off-season and extreme weather continuing to weigh, while the price war also intensified consumers' wait-and-see sentiment. Looking ahead to September, the China Automobile Dealers Association believes that driven by compensatory consumption demand release, concentrated new vehicle launches, and expectations for the traditional peak sales season, the September auto market is expected to recover mildly. However, insufficient end-use demand, the ongoing price war, and the high base from the same period last year will keep YoY performance under pressure. Looking ahead to September, the China Passenger Car Association estimates that due to the Mid-Autumn Festival falling early on September 25 this year, September will have 22 working days, one fewer than the same period last year. September marks the traditional September-October peak season, and end-user traffic is expected to continue recovering. From a macro perspective, the August manufacturing PMI rebounded MoM and CPI remained stable, with the economy showing "marginal demand recovery and low-level stabilization in aggregate," providing bottom support for the auto market recovery. However, September faces an ultra-high base from the same period last year—the buying rush in September 2025 before subsidies were discontinued in some regions drove monthly retail sales to a historic peak, and this high-base effect will further suppress the recovery this September. Since late July, cumulative gasoline price increases this year have exceeded 830 yuan/mt, while EVs' growing appeal continues to dampen willingness to buy internal combustion engine vehicles. Upstream raw material prices have pulled back somewhat, and with the industry's anti-involution consensus gradually deepening, upstream profits have surged. However, price pressure is being transmitted from upstream to the vehicle manufacturing end, and operating pressure on automakers continues to intensify. On the policy front, this year's trade-in subsidy policy continues to strengthen, with the number of subsidies expected to show a low-then-high trend. Many local governments will further ramp up measures in September, effectively boosting the September auto market. As the trend toward larger EVs becomes increasingly prominent, the cost-effectiveness of choosing large EVs for family self-driving trips is extremely high, and the National Day holiday travel in October is expected to further boost sales of large EVs. With the release of China's standards for assisted driving and L3 intelligent driving products, the intelligent driving section of the Road Traffic Safety Law has begun to be revised, overseas autonomous ride-hailing has reached a new level, and assisted intelligent driving is shifting from "novelty" to "standard feature," with low-cost, high-intelligence technology being the key to competition. Consumer expectations for intelligent driving technology highlights will continue to drive up attention and purchase intent for high-level intelligent driving models, potentially becoming new momentum driving structural growth in the new energy vehicle market. As anti-involution efforts continue to deepen, the CPCA expects that the auto market in September is likely to sustain its MoM recovery trend, and after the high base effect fades, the YoY decline will narrow significantly. From the perspective of passenger vehicle consumption characteristics, the current market exhibits three core features: First, high oil prices continue to suppress demand for internal combustion engine vehicles, "oil-to-electric substitution" is accelerating, the new energy penetration rate is fluctuating at highs above 65%, and the weight of vehicle operating costs in consumers' car purchase decisions continues to rise. Second, replacement demand is squeezing first-time purchase demand, with "consumption upgrading and consumption downgrading exits coexisting." Demand for B-class and above high-end models is robust, while A-class and A00-class economy EVs continue to shrink under the influence of complex factors. Third, new consumer demand driven by intelligent driving is taking shape, with consumer attention to AI intelligent driving functions rising rapidly, and technology experience becoming the third most important car purchase decision factor after driving range and charging infrastructure. Fourth, the trend toward full electrification in the A-class vehicle market is evident, and under high oil prices, improvements in single-vehicle fast charging technology will effectively boost sales of A-class EVs. Policy side Recently, official control over corporate payment terms has become increasingly stringent. The State Council Executive Meeting has deployed efforts to address accounts receivable, explicitly calling for vigorous rectification of the problem of large enterprises delaying payments to small and medium-sized enterprises and for improving industry payment rules. On September 14, the State Council Information Office held a routine policy briefing to introduce work related to strengthening the governance of payment collection difficulties for small and medium-sized enterprises. Vice Minister of Industry and Information Technology Ke Jixin stated that, based on surveys by industry institutions, the average payment terms of key automotive enterprises have improved, but it should also be noted that the current average payment terms of domestic automakers still fall short of the expectations of the vast number of small and medium-sized enterprises. For example, issues such as different starting points for calculating payment terms and unclear acceptance conditions all require persistent, long-term efforts and a nail-driving spirit to advance governance. Regarding the long payment terms in the automotive industry, he stated that in the next step, the MIIT will continue to consolidate existing achievements in payment term optimization, guide third-party institutions to establish a survey and evaluation mechanism for automaker payment term commitments, and carry out tiered assessments of payment term performance on a regular basis. At the same time, it will strengthen coordinated oversight, and for enterprises with large accounts payable, deliberate extension of payment terms, or a high number of complaints, it will conduct interviews and urge them to rectify.

SMM, September 17: In the new energy sector, "lithium hexafluorophosphate (LiPF₆)" is virtually a household name—it is the "soul raw material" of lithium battery electrolytes, and nothing can replace it. However, over the past two years, as the industrialisation of sodium-ion batteries has accelerated, its "sodium salt sibling"—sodium hexafluorophosphate (NaPF₆)—has begun to appear frequently in industry chain discussions. Also a member of the "hexafluorophosphate" family, NaPF₆ is younger and more niche than LiPF₆, yet it is expected to replicate or even surpass LiPF₆'s industrial standing. 1. First, understand what it is: "sodium + phosphorus + fluorine" in white crystals Sodium hexafluorophosphate (NaPF₆), with a molecular weight of 167.95, appears as a white crystalline powder. It is readily soluble in anhydrous hydrogen fluoride (HF) but decomposes rapidly upon contact with water, releasing irritating gases such as PF₅ and HF. Its structure can be broken down into two parts**—Na⁺ (sodium ion) and PF₆⁻ (hexafluorophosphate anion)**. The PF₆⁻ is an octahedral anion composed of one phosphorus atom and six fluorine atoms, with stable chemical properties and a uniform charge distribution, making it an excellent electrolyte anion. This combination of a "sodium salt + large, weakly coordinating anion" allows NaPF₆ to readily dissociate Na⁺ in organic solvents, providing charge carriers for battery charge and discharge—this is the fundamental reason it can serve as a core raw material for electrolytes. 2. How it is made: almost the "same production line" as lithium hexafluorophosphate The industrial synthesis route for NaPF₆ is highly homologous to that of LiPF₆. Currently, the mainstream method in China uses a two-step HF solvent process: Step-1, produce PF₅: React phosphorus pentachloride (PCl₅) with anhydrous hydrogen fluoride (HF) in a reactor to generate phosphorus pentafluoride (PF₅) gas and hydrogen chloride (HCl) as a by-product.   PCl₅ + 5HF → PF₅↑ + 5HCl↑ Step-2, synthesise NaPF₆: Pass PF₅ gas into an anhydrous HF solvent containing dissolved sodium fluoride (NaF), and carry out the reaction, crystallisation, and separation under low-temperature conditions to ultimately obtain high-purity NaPF₆ crystals.   PF₅ + NaF → NaPF₆ (reaction in HF solvent) This route features mature technology and high product purity (up to 99.99% or higher). Theoretically, producing 1 mt of NaPF₆ requires 0.25 mt of NaF; after accounting for industrial yield, the actual unit consumption is approximately 0.26–0.3 mt. 3. Why it matters: the "indispensable" core electrolyte for sodium-ion battery electrolytes The working principle of sodium-ion batteries is similar to that of lithium-ion batteries—relying on the intercalation/deintercalation of Na⁺ between the anode and cathode to achieve charge and discharge. However, Na⁺ has a larger radius than Li⁺ (0.102 nm vs 0.076 nm), placing higher demands on the electrolyte's ionic conductivity, degree of dissociation, and chemical stability. Among the various sodium salt electrolyte candidates (NaPF₆, NaFSI, etc.), NaPF₆ has become the current mainstream sodium-ion battery electrolyte solution due to its combined advantages of "process homology with LiPF₆, high conductivity, wide electrochemical window, and good low-temperature performance." IV. The "High Barriers" of Battery-Grade NaPF₆: Why There Are Few New Players Unlike laboratory reagents, battery-grade NaPF₆ has nearly stringent purity requirements: Main content ≥ 99.9%, with total impurities controlled within 1,000 ppm Free acid (HF) ≤ 50 ppm; excessive levels can corrode battery current collectors Moisture ≤ 50 ppm; decomposition upon contact with water produces HF, a core cause of battery leakage and swelling Metal impurities such as calcium, magnesium, and iron ≤ 1 ppm; otherwise, they can deposit and damage the SEI film during cycling Particle morphology, tap density, and other parameters need to be adapted to downstream electrolyte formulations Behind these specifications lie complex purification processes, stringent anhydrous and dust-free production environments, and a downstream client certification cycle of 6 to 12 months—constituting a dual "technology + client" barrier that is difficult for new players to quickly overcome. Additionally, current demand for sodium-ion batteries remains limited, and leading LiPF6 enterprises have not been rapid in advancing their layout in this area. V. Future Outlook: Two Key Variables Beyond Strategic Positioning Value SMM's view: From 2026 to 2028, NaPF₆ will still account for 70%–80% of the sodium-ion battery electrolyte market share, but two key variables warrant attention: Substitution risk: NaFSI (sodium bis(fluorosulfonyl)imide) has advantages in high-voltage and high-temperature scenarios. In the future, a "NaPF₆ + NaFSI" composite electrolyte may become mainstream, but NaF will remain a core upstream demand segment; Conclusion From a white crystal with a molecular weight of 167.95 to a key material for future sodium-ion batteries, NaPF₆ is replicating the story of LiPF₆ in the lithium battery era. Understanding it means understanding the three core elements of the sodium-ion battery industry chain: "cost + technology + competitive landscape."     SMM New Energy Research Team Wang Cong 021-51666838 Feng Disheng 021-51666714 Lyu Yanlin 021-20707875

SMM, September 17: This week, artificial graphite anode prices remained stable. Cost support stayed firm, with raw material petroleum coke and needle coke prices edging up slightly, while graphitisation tolling fees stabilized at highs after several earlier rounds of increases. The supply-demand balance remained tight, and with the "September peak season" arriving, anode production schedules rose steadily, though the destocking process continued to advance. However, battery makers still pushed for lower prices through a "volume-for-price" strategy, which to some extent capped the upside room for artificial graphite prices. Natural graphite remained in the doldrums, with end-use demand still showing no notable growth, while prices lingered near cost levels for an extended period, leaving buyers and sellers in a stalemate. Looking ahead, for artificial graphite, cost support is expected to remain relatively solid, and end-use demand will continue to be released, so artificial graphite prices are expected to retain upward momentum. However, under the impact of consumption tax policies, some end-use demand has already been released ahead of schedule, so the upside room for prices is expected to be limited. Natural graphite is unlikely to see a turnaround in the short term and is expected to consolidate at lows. SMM New Energy Research Team Wang Cong 021-51666838 Ma Rui 021-51595780 Feng Disheng 021-51666714 Lyu Yanlin 021-20707875 Zhang Haohan 021-51666752 Wang Zihan 021-51666914 Wang Jie 021-51595902 Chen Bolin 021-51666836 Xu Yang 021-51666760 Xu Mengqi 021-20707868 Hu Xuejie 021-20707858 Yang Le 021-51595898 Wang Zhaoyu 021-51666827 Li Yisha 021-51666730 Huang Chencong 021-51595860 Lin Ziya 021-5166-6902

SMM, September 17: This week, raw material coke prices for anode use trended upward, with the industry average price of oil-based green needle coke rising to 7,550 yuan/mt and the industry average price of low-sulphur petroleum coke raised to 4,780.5 yuan/mt. Cost side, internal divergence emerged: oil slurry stayed firm, while residual oil shot up before pulling back, though the overall price center remained high. Demand side, anode material entered the "September peak season," with production schedules continuing to climb and active inquiries, but acceptance of high prices was limited, with purchases mainly driven by essential restocking. In summary, driven by both demand and cost sides, raw material coke prices for anode use edged up this week, with limited gains. Looking ahead, with anode material peak-season production schedules staying high and raw material prices such as oil slurry remaining firm, if crude oil does not pull back significantly, raw material coke prices for anode use are expected to stay relatively firm. SMM New Energy Research Team Wang Cong 021-51666838 Ma Rui 021-51595780 Feng Disheng 021-51666714 Lyu Yanlin 021-20707875 Zhang Haohan 021-51666752 Wang Zihan 021-51666914 Wang Jie 021-51595902 Chen Bolin 021-51666836 Xu Yang 021-51666760 Xu Mengqi 021-20707868 Hu Xuejie 021-20707858 Yang Le 021-51595898 Wang Zhaoyu 021-51666827 Li Yisha 021-51666730 Huang Chencong 021-51595860 Lin Ziya 021-5166-6902

SMM, September 17: This week, electrolyte prices remained largely stable. The average prices of electrolyte for ternary power batteries, LFP batteries, and LMO batteries were 32,750 yuan/mt, 32,150 yuan/mt, and 24,350 yuan/mt, respectively. On the cost side, LiPF6 prices were largely stable this week. Producers still showed some willingness to raise prices, based on expectations of subsequent demand growth and relatively limited new production. However, lithium carbonate prices, a key raw material, fell notably recently, weakening cost support. Additionally, electrolyte enterprises faced difficulties passing costs downstream, making rapid price hikes hard to implement. In the short term, prices are expected to remain largely stable. Additive VC prices stayed firm at highs. Although previously suspended enterprises have resumed production, the impact on overall supply was relatively small. The supply-demand tightness persisted, and prices continued to fluctuate at highs. Solvent prices rose further. Affected by geopolitical conflicts in the Middle East, upstream material prices such as propylene oxide continued to rise, and cost pressure drove solvent prices higher. Overall, some raw material prices for electrolyte rose this week, but price transmission takes time. Cost changes have yet to be absorbed, and electrolyte prices remained largely stable. Looking ahead, driven by the traditional September-October peak season, downstream demand is expected to grow to a certain extent, boosting demand for electrolyte and its raw materials, supporting raw material prices, and gradually transmitting to electrolyte prices.                                     SMM New Energy Research Team Wang Cong 021-51666838 Ma Rui 021-51595780 Feng Disheng 021-51666714 Lyu Yanlin 021-20707875 Xu Mengqi 021-20707868 Hu Xuejie 021-20707858 Chen Bolin 021-51666836 Wang Yizhou 021-51595909

Cooperation signings and order momentum in the energy storage sector continue to climb. In H1 this year alone, Chinese energy storage enterprises added more than 130 new signed orders, with cumulative contracted capacity exceeding 800 GWh. Entering Q3, multiple companies across the energy storage industry chain have successively disclosed major cooperation and performance progress. Within just three days, EVE signed two important cooperation agreements. On September 9, EVE announced that it had recently signed a strategic cooperation agreement with China Railway Beijing Group, under which the two parties agreed on energy storage project cooperation of no less than 5 GWh over the next three years. On September 7, EVE reached a strategic cooperation with Zhongcheng Energy, covering cooperation intentions in energy storage equipment, sodium-ion battery energy storage, and other areas. Since the beginning of this year, EVE has publicly disclosed more than 10 energy storage orders totaling over 230 GWh, making it one of the battery producers leading the energy storage sector in order volume this year. Also in early September, Goldwind Science&Technology disclosed during its 2026 interim results roadshow that in H1 this year, its energy storage business shipments in the Chinese market grew 47% YoY, with successful bids for multiple gigawatt-scale energy storage projects. In international markets, new signed orders grew 66% YoY, and shipments grew 200% YoY. Recently, Gotion High-tech also announced that it had secured a 6 GWh core energy storage order for Saudi Arabia's first batch of large-scale battery energy storage projects, and will provide full energy storage solutions for three major local energy storage sites. According to Sunwoda, its AIDC energy storage business orders grew nearly 30-fold YoY in H1, with its product portfolio fully adapted to SST, HVDC, and UPS application requirements in IDC/AIDC scenarios. Market heat is intense The global energy storage market is now entering a period of breakneck high-speed growth. Industry data shows that in H1 this year, global ESS battery shipments reached 467 GWh, up over 90% YoY. Of this, utility-scale battery cell shipments, including industrial and commercial ESS, were approximately 407 GWh, up about 92% YoY. Global residential ESS battery cell shipments exceeded 53 GWh, up about 113% YoY. Industry institutions expect total global ESS battery cell shipments to exceed 1,000 GWh for full-year 2026. Frontline battery producers are feeling this wave of surging market heat most directly. Taking EVE as an example, in H1 this year, the company's total ESS battery shipments reached 44.46 GWh, up 54.88% YoY. EVE disclosed that its current energy storage orders on hand already exceed its existing capacity, and it expects energy storage shipments to grow significantly next year. According to J.P. Morgan forecasts, EVE's ESS shipments are expected to grow 40-50% in 2027, mainly driven by gradually increasing demand from top-tier clients outside China. During the recent "Green Leadership, Integrated Innovation - 2026 New Energy Battery Industry Chain Survey" conducted by CBEA, multiple enterprises reported that energy storage, especially in markets outside China, is accelerating rapidly. Hu Ming, Deputy General Manager of YIFI Laser's Product Market Center, said that YIFI Laser's business outside China has grown very rapidly this year. "Robust demand in Europe's industrial and commercial ESS, residential ESS, and portable energy storage sectors is driving equipment demand for battery and module PACK expansion." According to Chi Tongsheng, Chairman of Dejin New Energy, the company focuses on large-capacity, long-cycle-life, high-safety LFP prismatic aluminum-shell large-format cells, and its ESS battery orders are already scheduled into next year. "Our LFP energy storage products have seen very rapid export growth in recent years, and now cover more than 50 countries and regions worldwide, including Europe, North America, and Southeast Asia." Growth in the European and US energy storage markets is particularly pronounced. The release of rigid demand for peak shaving and the full realization of residential ESS economics are the two core drivers of the current high-speed growth in European energy storage market demand. Surveyed enterprises analyzed to CBEA that the Middle East situation has impacted global energy markets. Since the outbreak of the conflict, natural gas and oil prices have risen, increasing Europe's additional spending on fossil fuel imports and further strengthening the rigid demand attributes of residential and industrial and commercial ESS. The main driver of demand growth in the North American energy storage market is the increase in electricity consumption brought by the development of AI data centers (AIDC). According to industry institution analysis, the reshoring of US manufacturing and the batch grid connection of AIDC have created power shortages, amplifying the need for US power grid expansion. The passage of the OBBB bill has accelerated energy storage demand release through installation rushes, and giants such as Nvidia have clarified AIDC energy storage allocation plans, opening up long-term upside. Utility-scale energy storage competition intensifies Currently, many mainstream battery producers have significantly tilted their production lines toward the energy storage sector. According to industry institution statistics, based on plans as of August 2026, global ESS battery cell existing capacity by year-end is expected to reach 1.2 TWh to 1.5 TWh, and total planned industry capacity may exceed 2 TWh. ESS batteries have become the most active segment for capacity expansion in the entire lithium battery industry chain. It is understood that since the beginning of this year, EVE has successively announced multiple capacity expansion projects in Jingmen, Hubei; Huizhou, Guangdong; Qidong, Jiangsu; Shanghang, Fujian; and other locations, with cumulative total investment exceeding 23 billion yuan and planned new energy storage and power battery capacity exceeding 230 GWh, of which about 60% is planned for ESS battery cell production. In sharp contrast to the rapid expansion of capacity scale is the extreme structural divergence within the industry. According to industry statistics, premium capacity at top-tier ESS battery producers is nearly fully utilized, while utilization rates at low and mid-end production lines are below 50%, and the industry-wide weighted capacity utilization rate is only about 65%. Overall, the ESS battery market currently presents a supply-demand mismatch, but high-end capacity remains in undersupply. "Premium ESS battery cells from top-tier producers are still extremely hard to secure. 314Ah is in short supply, 587Ah is in short supply, 628Ah is in short supply, and 790Ah is also in short supply." A Chinese battery producer said that 314Ah cell orders in the industry are now generally scheduled into 2027, 587Ah and 628Ah large cells are accelerating their entry into the utility-scale energy storage sector, and the larger-capacity 790Ah cells are currently very scarce, with only a few top-tier battery enterprises able to achieve mass production. In the technology race for large-capacity ESS battery cells, innovation competition among Chinese producers continues to escalate. For example, CATL's 587Ah large ESS battery cell has achieved large-scale delivery. EVE's 628Ah cell is one of the world's first 600Ah+ large-capacity ESS cells to achieve large-scale commercial deployment, and R&D on its next-generation 702Ah ESS cell is progressing steadily. REPT Battero's 392Ah Wending® large-capacity ESS cell has now achieved stable batch delivery worldwide. Sunwoda's 684Ah and 588Ah ESS cell products have both entered the batch supply stage. CBEA also noted that in April this year, Goldwind Science&Technology's Changzhou energy storage assembly plant rolled out its first GoldStack3.0 L6000 system equipped with 628Ah cells, with a planned annual production line capacity of 7 GWh. Goldwind Science&Technology disclosed that orders based on this product total approximately 5 GWh, and the company's production schedule is already booked through year-end. It is clear that the energy storage market is undergoing a profound dual transformation of capacity reshuffle and technological upgrading. Only enterprises with mass production capability for premium cells and the ability to meet delivery standards for high-end global projects can truly convert capacity advantages into tangible orders and performance, driving the entire industry toward higher-level competition in technology quality and global delivery capability.

According to a release from Hunan Zhongke Shinzoom Co., Ltd., on 10 September, the main structure of the integrated office building (carbonisation workshop office building) for Phase I of Zhongke Shinzoom's lithium-ion battery anode material integrated base project in Oman was topped out. This building, standing in the Sohar Free Trade Zone, will lay a solid foundation for subsequent completion, delivery, and commissioning. As introduced, the Oman project, a key anchor in Zhongke Shinzoom's global expansion, is planned to have an annual capacity of 200,000 mt and will be advanced in two phases. The first stage of Phase I is planned to be gradually completed and put into production by 2027, precisely aligning with global clients' capacity expansion needs outside China and reserving ample flexibility for market delivery. Leveraging the benefits of Oman's free trade agreements, the project can more smoothly reach markets outside China and navigate trade barriers; combined with local petrochemical and wind and solar power resource endowments, its cost advantages continue to be strengthened. Following the path of "local manufacturing, global delivery," the project will seize the window period in the construction of the lithium battery industry chain outside China, expand its international footprint, and increase its global share. The topping out of this office building marks the project's transition from single-point civil construction to a new stage of multi-discipline parallel advancement. Next, the focus will be on key processes such as secondary structures, decoration, and mechanical and electrical installation, continuously strengthening quality, safety, and schedule control to ensure high-quality completion and high-efficiency commissioning, enabling project periods to be converted into delivery capability more quickly and capacity deployment to realize market value more rapidly. According to public information, in June 2025, Sinosteel New Materials (300035), through its wholly-owned subsidiary Hunan Zhongke Shinzoom Hong Kong as the main entity, established a project company in Oman to invest in the construction of an integrated base project with an annual capacity of 200,000 mt of lithium-ion battery anode material. The total planned investment for the project does not exceed 8 billion yuan (final amount subject to actual investment), and it will be constructed in two parts, each with a planned capacity of 100,000 mt/year and an expected construction period of 36 months.

Recently, Shanxi Xiang'an Energy Technology Co., Ltd. released the draft environmental impact assessment report for public comment on its project with an annual output of 30,000 mt of sodium-ion battery materials. The project is located in the Fuyang Industrial Park within the Xiangyuan Economic and Technological Development Zone in Changzhi City, Shanxi Province. The main part of the project and associated utilities include the construction of two production lines for sodium-ion battery cathode materials and one production line for anode materials, supported by pure water preparation, air compression, nitrogen generation, dehumidification, and cooling water circulation systems. The processes adopted include: pretreatment (mixing + sand milling + iron removal + spray drying), sagger loading, leveling, grid insertion + sintering, and final treatment (jet milling + batch mixing + sieving + packaging). Once operational, the project will produce 25,000 mt of sodium-ion battery cathode materials and 5,000 mt of anode materials annually. The total investment is 534 million yuan, with environmental protection investment of 3.64 million yuan, accounting for 0.68%. According to available information, Shanxi Xiang'an Energy Technology Co., Ltd. was established in September 2025. Its business scope includes energy storage technical services; manufacturing of primary equipment for new energy; R&D of new material technologies; battery manufacturing; battery sales; and sales of primary equipment for new energy. The company is 51% owned by Nanjing Ruishang New Energy Technology Co., Ltd. and 49% owned by Ben'an Energy Technology Jiangsu Co., Ltd.

According to Capchem (300037), the environmental impact assessment for the Phase II battery chemicals project of Chongqing Capchem New Materials Co., Ltd. has been announced for the first time. The announcement shows that the project is the Phase II battery chemicals project of Chongqing Capchem, located at No. 5 Huanan Bazhi Road, Yanjia Subdistrict, Changshou District, Chongqing. The total site area is 168 mu, and the expansion project will be constructed on reserved land within the plant area. The construction content and scale are as follows: Phase II will expand Building 1, Building 6, and the tank farm, and construct a new Class A Building 2, Warehouse 3, and a temporary parking lot for tanker turnaround. Upon completion, the project will add capacity of 200,000 mt/year for lithium-ion battery electrolyte, 50,000 mt/year for sodium-ion battery electrolyte, and 6,000 mt/year for ethylene carbonate (EC). The project developer, Chongqing Capchem New Materials Co., Ltd., is a wholly owned subsidiary of Capchem, established in January 2022 with registered capital of 200 million yuan. The company's first-phase 100,000 mt lithium-ion battery electrolyte project commenced production in mid-April 2025. In addition, Capchem Technology USA Inc. (hereinafter referred to as "Capchem USA") recently held a groundbreaking ceremony for its lithium battery electrolyte production site in Ironton, Lawrence County, Ohio, US. The groundbreaking marks the entry of Capchem's internationalization strategy into the substantive construction phase in North America, adding a key anchor to its global production network. Capchem has been deeply engaged in the industry for more than 30 years and has established a presence in Asia and Europe. The Capchem USA Ohio project is the company's first large-scale battery chemicals production site in North America, aimed at serving power battery, energy storage, and consumer electronics clients in the region with local production and local delivery, better meeting global clients' requirements for safe and stable supply chains, and supporting the upgrading of North America's new energy industry and global energy diversification. For next-generation battery technology, Capchem has launched a long-life sodium-ion battery electrolyte and achieved large-scale delivery, while solid-state electrolyte material R&D continues to advance with planned kt-level capacity, forming a synergistic development pattern of "liquid-based primary, solid-state supplementary" and continuously achieving cost-performance breakthroughs from the technology end.

Since the beginning of this year, a new round of reshuffling in the lithium battery industry chain has continued to deepen. In August this year, the bankruptcy reorganization cases of lithium battery company Soundon New Energy Technology Co., Ltd. (hereinafter referred to as Soundon New Energy) and Sichuan Mulun New Material Technology Co., Ltd. (hereinafter referred to as Mulun New Material) saw new progress. On August 14, the Xiangtan Intermediate People's Court ruled to terminate Soundon New Energy's reorganization procedure and declared it bankrupt. With that, Soundon New Energy's reorganization, which had lasted two years and two months, was declared a failure. Soundon New Energy was established on December 2, 2011, with its headquarters in Xiangtan, Hunan Province. It was set up with investment from the Sound Group and is a core lithium battery enterprise in which ST Qihuan (000826) holds a stake. It focuses on the pouch lithium battery technology route, with business covering the entire industrial ecosystem including power batteries, ESS batteries, cathode materials, and battery recycling. In 2018, the company's revenue was 1.75 billion yuan, and its ternary pouch power battery installations reached 541.4 MWh, ranking fifth nationwide, with planned capacity of 6 GWh. However, its operations then deteriorated sharply: as of December 31, 2023, total assets were 6.574 billion yuan, net assets were 2.782 billion yuan, and liabilities were 3.793 billion yuan. In 2023, revenue was 262 million yuan and net profit was -524 million yuan. In 2023, it was also subject to administrative regulatory measures by the Hubei Securities Regulatory Bureau for occupying ST Qihuan's funds and failing to repay them on time, and was recorded in the securities and futures market credit archives. Under the dual pressure of a broken capital chain and damaged credibility, Soundon New Energy was unable to repay its due debts and applied to the court for bankruptcy reorganization twice, in December 2023 and May 2024. On June 5, 2024, the Xiangtan Intermediate People's Court ruled to accept the bankruptcy reorganization applications filed by BTR (920185) and Yuyao Haitai Trading against Soundon New Energy, and on July 30 of the same year designated Hunan Hongyi Law Firm and Beijing DeHeng (Changsha) Law Firm to jointly serve as administrators. At the second creditors' meeting in October 2025, the draft reorganization plan was approved only by the employee claims group, while the priority claims group, ordinary claims group, and investor group all rejected it. On May 20, 2026, Soundon New Energy issued a notice scheduling the third creditors' meeting in the bankruptcy reorganization case for June 4 to review and verify the claim filing and review report and to vote on the draft reorganization plan for a second time. The court and administrators ultimately confirmed that Soundon New Energy's total valid claims amounted to approximately 4.01 billion yuan. According to Sichuan Shuliheng Bankruptcy Liquidation Firm, the first creditors' meeting in the Mulun New Material bankruptcy reorganization case was held on August 4. Mulun New Material was established in November 2017 with registered capital of 76 million yuan, and its legal representative is Lei Jianming. At its inception, it was mainly engaged in the production and sale of graphite electrodes, and later gradually expanded into graphitisation production for new energy anode materials. The first phase of the first lithium battery anode material project in Panzhihua, Sichuan, which it invested in and built, went into production in May 2021. The project has a planned annual capacity of 30,000 mt, with the first phase producing 8,000 mt per year, achieving a "zero" breakthrough in graphitisation processing of lithium battery anode materials in the Panxi region. On July 3, 2025, creditor Yang Chunjie filed a pre-reorganization application with the Panzhihua Intermediate People's Court on the grounds that Mulun New Material was unable to repay its due debts but still had value and possibility of rescue. On October 24, 2025, the court decided to formally initiate the pre-reorganization procedure, and through random designation by the court, the Panzhihua branch of Sichuan Shuliheng Bankruptcy Liquidation Firm Co., Ltd. was appointed as the interim administrator. The balance sheet shows that as of February 28, 2025, the company's total assets were 57.1656 million yuan, total liabilities were 105 million yuan, and owners' equity was -48.1781 million yuan. On March 26, 2026, the Panzhihua Intermediate People's Court ruled that the Renhe District People's Court should hear the bankruptcy reorganization case. On June 9, the Renhe District People's Court formally filed the case, and on June 16, the Renhe District People's Court designated the aforementioned Panzhihua branch as the administrator. The smooth convening of the first creditors' meeting marked that Mulun New Material's bankruptcy reorganization work has entered a substantive advancement stage. The bankruptcies of Soundon New Energy and Mulun New Material are not isolated cases. Since the beginning of this year, many companies in the battery industry chain have fallen into bankruptcy crises, affecting everything from battery manufacturers to materials and recycling companies: In January, the Changxing County Court in Zhejiang ruled to accept the bankruptcy liquidation case of JEVE New Energy Technology (Huzhou) Co., Ltd. and appointed an administrator. The company was established in September 2021 and is a member enterprise of Fosun Holding Group, wholly owned by Tianjin JEVE Power Industry Co., Ltd. It is mainly engaged in the R&D and manufacturing of new energy batteries and automotive parts. The company began construction in stages starting in 2021, but by the time of bankruptcy, it had not yet been fully completed and had not officially gone into production. In March, Tianjin Baishun Songtao Power Battery Technology Development Co., Ltd. saw a new bankruptcy review case filed. This enterprise, established in 2012, had planned to build a power battery industrial base in Tianjin Airport with a total investment of 10 billion yuan and sales of 10 billion yuan. However, around 2017, a debt crisis erupted in concentrated fashion, and its core production equipment was auctioned off by the court twice. Multiple publicly listed firms including Easpring Technology, Nebula Electronics, PTL, and Shenzhen Senior Technology Material were drawn into payment disputes. In April, Jiangxi Special Electric Motor (002176) announced its participation in the bankruptcy reorganization investment of Zhaoqing Aoyou Power Battery Co., Ltd. (referred to as Aoyou Power). After the reorganization is completed, Aoyou Power will become a controlling subsidiary of Jiangxi Special Electric Motor and be included in its consolidated statements, and will be used for the production of non-power batteries and ESS batteries. Aoyou Power was originally a new energy power battery manufacturer, mainly engaged in the R&D and production of lithium-ion power batteries, ESS battery systems, and related modules. Due to changes in the market environment and a broken capital chain, it had been shut down for a long time with large liabilities, and in 2025 the Zhaoqing Intermediate People's Court ruled to accept its bankruptcy reorganization and appointed an administrator. In June, Jiangxi Province Keneng Weida ESS Battery System Co., Ltd. was ruled by the court to accept bankruptcy liquidation. The company was established in December 2016 and is a wholly owned subsidiary of Jiangxi Keneng ESS Battery System Co., Ltd. (jointly funded by Beijing Guoneng Battery and Kelu Electronics), mainly engaged in the development of lithium-ion batteries, new energy battery systems, and ESS. After its establishment, the company leased factory buildings in the Chengdong Industrial Park of Fenyi County, Xinyu City, Jiangxi Province for lithium battery production, and began production in early 2019. In November of the same year, it was forced to halt production due to reduced market orders and other reasons. Although attempts were later made to restart, production could not be resumed due to intensifying industry competition. As of March 31, 2026, the company's asset-liability ratio was as high as 121.5%. Even Narada Power, a veteran energy storage company with 30 years of history, was not spared. In July, creditors applied for pre-reorganization and reorganization of ST Narada (300068) on the grounds that it was unable to repay its due debts. Narada Power started with lead-acid batteries, initially producing industrial energy storage lead-acid batteries and providing backup power supplies for communications companies. In 2001, it registered and established Shanghai Narada Ruibao Energy Technology Co., Ltd. in Shanghai, entering the lithium battery industry. In 2010, it was listed on the ChiNext board, and in November of the same year, it exclusively supplied ESS batteries for China's first large-scale practical energy storage project, the Zhejiang Dongfushan New Energy Project, entering the renewable energy storage industry and becoming a pioneer in China's new-type energy storage sector. In 2020, it launched the strategic transformation of "abandoning lead and shifting to lithium," and in 2023 it ranked fourth globally in ESS system integrator shipments in the Chinese market, and invested in building two major energy storage bases in Yangzhou and Jiuquan. However, the transition to lithium batteries requires enormous capital investment and a long period of painful adjustment. The lead-acid battery business declined, while the lithium battery business had not yet fully matured. The company is currently facing a predicament of massive financial losses and a large amount of due debts that cannot be repaid. ST Narada's announcement on July 6 showed that a total of 163 accounts of the company and its subsidiaries had been frozen, with the total amount of funds subject to freezing applications at approximately 3.067 billion yuan. In addition, the lithium battery territory of central state-owned enterprise giant Sinochem International (600500) is also accelerating its collapse. In 2025, its power battery subsidiary Huaian Junsheng New Energy Technology Co., Ltd. entered bankruptcy proceedings and was transferred to Xingtai (Hebei) Lithium Battery Technology Co., Ltd. In 2026, the ternary cathode material company Ningxia Sinochem Lithium Battery Materials Co., Ltd. completed bankruptcy reorganization and was transferred to Shaoxing Hailan New Materials Co., Ltd. The battery recycling company Hebei Sinochem Lithium Battery Technology Co., Ltd. was ruled by the court to enter bankruptcy proceedings, and the first creditors' meeting was held on July 10. The administrator is currently publicly recruiting interested investors. This reshuffling of the lithium battery industry is not confined to China. In July, VARTA, a German battery manufacturer with a century of history, filed for pre-bankruptcy proceedings under self-administration, and its factory in Nördlingen, Germany will be shut down in autumn 2026. The most critical blow to VARTA came from Apple. In May this year, a VARTA spokesperson confirmed that Apple would not renew its battery supply contract. In the same month, Limatech, a French aviation battery startup, was ruled by the court to be liquidated. The company mainly developed LFP batteries, and due to the Middle East war, its core financing cooperation was suspended, breaking its capital chain and making it unable to continue operations. In May, another LFP battery manufacturer, Morrow Batteries, formally initiated bankruptcy proceedings. This Norwegian battery company owns Europe's first LFP gigafactory, with shareholders including Siemens Financial Services, ABB, and other well-known institutions. The Norwegian Prime Minister personally cut the ribbon for its 1 GWh factory. Morrow had originally planned to build a gigafactory cluster with annual capacity of up to 43 GWh. However, the global battery market oversupply led to enormous price pressure, rising capital costs, and a more cautious investment market, and the company was unable to obtain new financing before running out of funds. In April, battery recycling company Ascend Elements initiated bankruptcy protection proceedings due to exhausted funds and an unfinished project. It is reported that the company had raised 12 rounds of financing since its establishment, attracting investment from Honda, SK Group, Qatar Investment Authority, Temasek, and others, with cumulative financing exceeding $1.1 billion. In March, French lithium refining startup Viridian Lithium was placed into judicial liquidation. The company had been included in the first batch of strategic project lists by the European Commission, and had originally planned to build Europe's first lithium refinery in Lauterbourg in the Alsace region of France to produce battery-grade lithium hydroxide. According to recent foreign media reports, of the 60 critical minerals strategic projects released by the EU, 23 jointly sent an "urgent call to action" to European Commission President von der Leyen in August, saying they could barely hold on. Taken together, the surface reasons for these lithium battery industry chain companies falling into reorganization or bankruptcy crises are mostly "inability to repay due debts and broken capital chains," but a broken capital chain is never the cause; it is the result. The deeper reason is the shift from rapid expansion to surplus-driven exit from the market, with several forces striking back simultaneously: aggressive early expansion, price wars, tightening financing, and failed transformations. First, global supply-demand imbalance, overcapacity and spreading price wars, and loss of clients and orders. The global battery market is structurally oversupplied, and price wars follow like a shadow. When lithium batteries were booming, capital poured in, and upstream and downstream players concentrated on expanding capacity. When the tide receded, as industry supply and demand shifted, price wars spread rapidly. Small and medium-sized enterprises already struggle to secure stable orders. Some companies have high client concentration, and once an order is lost, revenue falls off a cliff. At the same time, raw materials such as lithium and cobalt have seen sharp rises and falls, and amid price wars, many enterprises "lose money on every unit they produce." Second, the aftereffects of early expansion: once financing tightens, cash flow is the first to collapse. The battery industry chain is a typical asset-heavy sector: large investment, slow returns, and long cycles. Lithium battery industry chain companies frequently plan bases worth tens of billions of yuan, tying up large amounts of capital in capacity and projects. As the financing environment tightens and capital costs rise, once follow-up financing cannot keep pace, cash flow immediately blows up. Without sustained financing capability, it is also difficult to cross the commercialization threshold. Scale was once a moat, but now it may become a dam of debt. Third, the pains of strategic transformation: old businesses are bleeding, new businesses have not yet taken off, and companies fall into debt crises. Some companies crossed over into lithium batteries, creating large amounts of goodwill and enormous investment during the transformation period. When old businesses decline and new businesses have not yet ramped up, cash flow gaps are most likely to appear. At the same time, technology routes are iterating at an accelerating pace: the shift between ternary and LFP, and the continuous iteration of new technologies such as solid-state batteries, sodium-ion batteries, high-nickel, and silicon-based anodes. Companies that bet on the wrong route or lack sufficient R&D strength are left behind by technological iteration. Conclusion: This is not the individual failure of a few companies, but a brutal screening as the lithium battery industry moves from a phase of rapid expansion into a stage of high-quality development. In the first half, companies took off on tailwinds, secured positions through scale, and accelerated with capital. In the second half, it is no longer just about who runs fastest, but about who survives longest. To successfully navigate the cycle, core technology, resources and capital, client quality, and capacity utilization rate must all be strengthened.

SMM, September 11: This week, domestic scrap battery prices rose first and then fell, with limited overall fluctuations. After the pulse of concentrated shipments by recyclers last week faded, scrap battery recycling volume fell 10%-20% WoW this week. Recyclers mostly adopted a fast-in, fast-out, low-inventory operating strategy, with neutral market sentiment and trading in line with market conditions. An SMM survey shows that 80% of surveyed recyclers expect scrap battery retirement volume in September to rebound seasonally by 10%-30% from August, but actual recycling growth since September has been insufficient and weak YoY, with the industry showing signs of "underperforming in the peak season." Smelters' raw material arrivals briefly improved at the start of the week before returning to stable levels; downstream battery enterprises mainly relied on long-term contracts and just-in-time procurement, with September peak season stockpiling yet to pick up. Scrap battery prices are expected to remain rangebound in the short term. Going forward, the focus will be on mid-September battery makers' stockpiling implementation, the transmission effect of lead prices on downstream raw material costs, and the pace of recovery in scrap battery retirement volume.