--- title: "CITIC Construction Investment | Vehicle storage resonance, raising the 2026 global lithium battery demand to 3163 GWh, the fundamental turning point has arrived" type: "News" locale: "en" url: "https://longbridge.com/en/news/283263446.md" description: "CITIC Construction Investment Securities research report indicates that global lithium battery demand is expected to be adjusted to 3163 GWh in 2026, an increase of 38.3% year-on-year. The main reasons include China's electric vehicle exports exceeding expectations, a surge in sales of new energy vehicles in Europe, and the economic viability of electric heavy trucks becoming apparent. It is expected that the upstream and downstream of lithium batteries will enter a prosperous cycle in the second quarter, with a particular focus on lithium carbonate and the energy storage market. China's new energy vehicle exports reached 904,000 units from January to March, a year-on-year increase of 126%. Sales of electric vehicles in Europe have also significantly increased, with an expected sales volume of 5.42 million units in 2026" datetime: "2026-04-19T11:45:01.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/283263446.md) - [en](https://longbridge.com/en/news/283263446.md) - [zh-HK](https://longbridge.com/zh-HK/news/283263446.md) --- # CITIC Construction Investment | Vehicle storage resonance, raising the 2026 global lithium battery demand to 3163 GWh, the fundamental turning point has arrived Ask AI · What policies and vehicle innovations are behind the explosion in electric vehicle sales in Europe? CITIC Construction Investment Securities Research Written by: Xu Lin, Zhu Yue In October last year and February this year, we continuously released reports emphasizing that lithium batteries are entering a cycle reversal moment. Since March this year, as vehicle storage demand continues to exceed expectations, we have further raised the global lithium battery demand for 2026 to 3163 GWh, a year-on-year increase of +38.3%, up from the previous expectation of 3031 GWh, which is about 13% higher than the current market consensus expectation of 2800-2900 GWh. The upward revision is mainly driven by: ① China's electric vehicle exports exceeding expectations; ② Europe's new energy vehicle sales exploding beyond expectations; ③ The economic viability of electric heavy trucks becoming evident beyond expectations. Additionally, if upstream raw material prices fluctuate moderately, there is also a significant chance to increase storage demand. It is expected that the upstream and downstream of lithium batteries will officially enter a prosperous cycle in Q2, with a positive outlook for lithium carbonate, energy storage household storage, and midstream materials. China's new energy vehicle exports exceeded expectations. From January to March, cumulative exports reached 904,000 units, a year-on-year increase of +126%; since 2026, the trend of high-end new energy vehicles has become significant, driving a substantial increase in battery capacity, effectively offsetting the impact of a year-on-year decline in domestic sales. The annual export sales growth rate is revised from 50% to 126%, corresponding to export demand of 250 GWh, exceeding expectations by about 90 GWh. Under optimistic expectations, the global passenger car lithium battery demand in 2026 is expected to reach 1558 GWh, a year-on-year increase of +26%. Electric vehicle sales in Europe and other overseas markets have exceeded expectations. In March, electric vehicle sales in nine European countries reached 413,100 units, a year-on-year increase of +43%. In the UK, France, and Germany, sales began to accelerate under continuous policy stimulation, while Italy and Spain have maintained strong high growth since 2026. With the dual support of vehicle models and policies, Europe's electric vehicle sales for 2026 have been revised from 5.15 million units to 5.42 million units, with a year-on-year increase revised from +29% to +35%. Excluding exports from China, the explosion in European sales could drive an increase of about 15-20 GWh in lithium battery demand. Regions like Japan, South Korea, and Thailand, which have local automakers, also showed growth rates ranging from 60% to 170% in Q1. We believe that other regions outside the United States, Europe, and China are also expected to achieve over 60% high growth in 2026. China's commercial vehicle demand exceeded expectations. The unexpected factor is the explosion of electric heavy trucks due to their economic viability. With subsidies maintained in 2026, electric heavy trucks are expected to maintain high growth rates. The production of electric heavy trucks in China for 2026 has been revised from 325,000 units to 400,000 units, with a year-on-year increase revised from 27% to +56%. The high battery capacity per vehicle is expected to drive an increase of about 35 GWh in demand. Under optimistic expectations, the global commercial vehicle lithium battery demand in 2026 is expected to reach 402 GWh, a year-on-year increase of +74% The probability of energy storage exceeding expectations is high. Observing the overall trend of lithium carbonate prices, there is a significant likelihood that the price center of upstream will continue to rise, leading to a postponement of some energy storage demand (which will release considerable space for industry demand growth next year). We maintain our judgment from the report issued in February this year: the annual lithium carbonate price will fluctuate between 150,000 and 300,000, and an increase in lithium carbonate prices will bring opportunities for the sodium battery industry chain. Investment suggestion: In the new cycle of industry demand exceeding expectations, the market will price stock performance according to the degree of supply and demand tightness. The priority order for segment allocation is: upstream lithium mines \> midstream smoothly transmitting price segments (household storage, commercial storage, systems) \> battery cells. In the midstream materials, focus on leading electrolyte manufacturers, copper foil, membrane, and other segments with capacity barriers. Electric New Frontier Observation: Vehicle Storage Resonance, Global Lithium Battery Demand Revised Up to 3163GWh Global lithium battery demand in 2025 is projected to be 2287GWh. Under the original neutral expectation, global lithium demand in 2026 is 3031GWh, a year-on-year increase of 32.5%. It is now revised up to 3163GWh for 2026, a year-on-year increase of 38.3%, which is higher than the market consensus expectation of 2800-2900GWh (about 13% higher). The upward revision of annual demand is mainly due to three major new energy vehicle expectations coming to reality: ① China's new energy vehicle exports exceeded expectations; ② European new energy vehicle sales exploded beyond expectations; ③ The economic viability of electric heavy trucks exceeded expectations. One of the driving forces for the revision: China's new energy vehicle exports exceeded expectations, with the annual export growth rate revised from 50% to 126%. Since 2026, China's new energy vehicle exports have maintained high growth. According to data from the Passenger Car Association, China's new energy passenger car export sales in January, February, and March were 286,000, 269,000, and 349,000 units respectively, with year-on-year increases of +106%/+127%/+144%, and the growth rate has been increasing month by month; the cumulative export from January to March was 904,000 units, a year-on-year increase of +126%. With exports driving growth and domestic sales gradually recovering, the wholesale of new energy passenger cars turned positive year-on-year in March, with a year-on-year increase of +1.3%. It is expected that domestic passenger car wholesale will further recover. Regarding domestic sales, since 2026, there has been a significant trend towards high-end new energy vehicles. From January to March, the proportions of A00+A0/A/B/C and above models were 15.5%/27.6%/34.6%/22.2%, with year-on-year changes of -5.9pct/-4.0pct/-3.8pct/+13.7pct The intuitive change brought about by the high-endization of vehicle models is the increase in battery capacity. From January to March 2026, the average battery capacity for pure electric and plug-in hybrid vehicles is 66/32 kWh, while in the same period of 2025 it was only 53/26 kWh, representing a 27% increase in battery capacity, effectively offsetting the impact of the current year-on-year decline in domestic sales. Domestic exports are expected to maintain a high growth trend, with the annual growth rate of domestic export sales revised up to 126% (originally expected year-on-year growth of 50%), corresponding to export demand of 250 GWh, a year-on-year increase of +134%, exceeding expectations by about 90 GWh, while domestic demand maintains a battery capacity increase at 637 GWh. Overall, in addition to the higher-than-expected growth in domestic exports, the explosive demand for new energy vehicles in Europe additionally brings about approximately 15-20 GWh in sales, while other regions' local new energy vehicles contribute an additional increase of about 10 GWh. Under optimistic expectations, global passenger vehicle lithium battery demand in 2026 is expected to reach 1558 GWh, a year-on-year increase of +26%. Revised Power Two: European sales exceed expectations, with the annual growth rate revised from 29% to 35%. In March, electric vehicle sales in nine European countries reached 413,100 units, a year-on-year increase of +43% and a month-on-month increase of +81%, with a penetration rate of 32.9%, up +7.4 percentage points year-on-year and +2.0 percentage points month-on-month. From January to March 2026, cumulative sales in these nine countries reached 855,900 units, a year-on-year increase of +34%, with a penetration rate of 31.7%, up +6.2 percentage points year-on-year. Among them, the sales in the UK, France, and Germany have begun to accelerate due to continuous policy stimulation, with March sales increasing year-on-year by +32%, +53%, and +46%, respectively, all exceeding expectations; Italy and Spain have maintained strong growth since 2026, mainly due to new subsidy programs introduced by the government in 2026, effectively driving sales up year-on-year by +92% and +62%. In 2025, electric vehicle sales in the EU are expected to reach 4 million units, a year-on-year increase of +34%, exceeding expectations, supported by the EU's decarbonization goals and various subsidies. Looking ahead to 2026, we believe Europe is likely to continue its growth trend, reaching 5.42 million units, a year-on-year increase of +35%, with the penetration rate continuing to rise by 7.7 percentage points, mainly due to the dual support of vehicle models and policies: 1. In 2026, European and American automakers will launch new platforms, with BMW, Mercedes-Benz, Volkswagen, and Stellantis introducing new platforms that can address the lack of electric versions of small and medium-sized models and their insufficient competitiveness, greatly alleviating the current pain point of low penetration rates for small and medium-sized models. It is expected that at least 20+ main models (new models + updated models) will be launched in 2026, with new models expected to achieve sales of over 250,000 units, contributing 5.5% to sales. 1. In 2026, major European countries will continue to strengthen policies to support the growth of electric vehicles. Among them, subsidies in the UK and Italy will continue, while Germany and Spain will restart subsidies, and France will marginally strengthen its single-vehicle subsidies. It is expected that in 2026, the sales of electric vehicles in France, Germany, the UK, Portugal, Spain, Italy, Norway, Sweden, and Denmark will be 640,000, 1,180,000, 990,000, 110,000, 340,000, 350,000, 170,000, 190,000, and 170,000 units respectively, with year-on-year growth of +35%/+40%/+34%/+26%/+56%/+70%/-1%/+7%/+37%. Overall, the electric vehicle sales forecast for Europe in 2026 has been raised to 5.42 million units, a year-on-year increase of +35% (originally expected 5.15 million units, year-on-year +29%), with a penetration rate of 29.8%, an increase of +7.7 percentage points year-on-year. Excluding exports to China, the explosive growth in European sales could drive an incremental demand for lithium batteries of about 15-20 GWh. The third upward revision: The economic viability of electric heavy trucks is becoming evident, with annual sales revised up from +27% to +56% year-on-year. The unexpected demand for commercial vehicles is primarily in electric heavy trucks, with economic viability being the core reason for the explosion of electric heavy trucks: 1. The economic viability of pure electric commercial vehicles has become evident. In 2026, the total cost of ownership (TCO) for pure electric heavy trucks/light trucks/vans is expected to save 335,000/109,000/118,000 yuan compared to fuel vehicles over five years under subsidies, corresponding to cost reductions of 13.7%/11.8%/14.5%, demonstrating significant economic advantages. 2. The halving of the purchase tax in 2026 has a minimal impact on the electrification trend of heavy trucks. In 2023, despite the decline in national subsidies, heavy truck sales increased by +64% year-on-year, indicating that subsidies are not the core constraint, and the industry trend is clear with improved economic viability. 3. Current national subsidies have clearly indicated the continuation of subsidies for the scrapping and updating of old operational trucks (up to 140,000 yuan), and it is expected that the subsidies will maintain high growth rates in 2026 4. In recent years, the energy capacity of new energy heavy trucks has rapidly increased. By 2025, approximately 5% of models will have a power battery capacity in the range of 281-283 kWh, about 18% of models will have a power battery capacity in the 350 kWh range, around 40% of models will have a power battery capacity of 400-423 kWh, and about 18% of models will have a power battery capacity exceeding 500 kWh. The average energy capacity per vehicle for the entire year is expected to be around 415 kWh, an increase of about 60 kWh compared to 2024. It is anticipated that by 2026, the proportion of models with a single vehicle energy capacity of 500 kWh or more in new energy heavy trucks will further increase, with the average energy capacity per vehicle reaching over 470 kWh. Domestic new energy heavy trucks will maintain high growth in 2026. The total domestic sales of new energy heavy trucks in 2025 is expected to be 233,000 units (insurance data, excluding military vehicles and exports), a year-on-year increase of 181.9%. In March 2026, domestic sales of new energy heavy trucks reached 20,637 units, a year-on-year increase of 37% and a month-on-month increase of 170%; the cumulative sales from January to March reached 44,700 units, a year-on-year increase of 47%. It is expected that in 2026, the production of new energy heavy trucks in China will be approximately 400,000 units, a year-on-year increase of 56% (originally expected to be 325,000 units, a year-on-year increase of 27%), and the sales of new energy commercial vehicles will be about 1.27 million units, a year-on-year increase of 34%. Under the influence of high energy capacity per vehicle, it is expected to drive an increase in lithium battery demand of about 35 GWh. Under optimistic expectations, global lithium battery demand for commercial vehicles in 2026 is expected to reach 402 GWh, a year-on-year increase of 74%. There is still potential for exceeding expectations: the probability of exceeding expectations for energy storage demand is high, with the upper limit depending on lithium carbonate prices. There is still room for upward revision of demand by 100-200 GWh in the future, mainly due to: ① The expected overseas energy storage demand exceeding expectations due to rising oil prices and energy independence; ② The expected H2 will see a surge in exports due to reduced export tax rebates; ③ The implementation of capacity electricity price mechanisms in various provinces will promote high growth in energy storage The increase in energy storage in 2026 mainly comes from: ① It is expected that China's growth rate will nearly double, reaching a total of 300-350GWh; ② The European market maintains high growth, with large storage becoming the main growth driver, and Eastern Europe providing significant increments from 2025 to 2027; ③ The North American market has a large data center storage space, currently revised up from 10GWh to 60GWh; ④ In other overseas regions, Australia's new installations in 2025 will significantly increase; Chile has strong demand for energy storage. It is expected that under neutral expectations, energy storage shipments will reach 998GWh in 2026, a year-on-year increase of +53%; under optimistic expectations, energy storage shipments will reach 1138GWh, a year-on-year increase of +75%. Considering the limited supply of lithium carbonate, we believe that further upward revisions will be constrained by supply-side limitations, ultimately leading to limited supply being realized in a direction that bears higher price tolerance. Therefore, we believe that although the currently price-sensitive downstream industries are expected to exceed expectations, dynamic tracking is more appropriate. Since 2023, energy storage exports have increased significantly, with lithium battery exports in 2025 reaching 305GWh, a year-on-year increase of +55%, of which energy storage battery exports reached 115.3GWh, a year-on-year increase of +82%, accounting for 38% of total battery exports. It is expected that lithium battery exports will reach 456GWh in 2026, a year-on-year increase of +50%, with energy storage battery exports reaching 202GWh, a year-on-year increase of +75%, accounting for 44% of total battery exports. The decline in the export VAT rebate may lead to unexpected export rush. Starting from December 1, 2024, the export rebate rate for lithium batteries will be reduced from 13% to 9%. On January 1, 2026, the Ministry of Finance and the State Administration of Taxation announced that starting from April 1, 2026, the export rebate rate will be reduced from 9% to 6%, and on January 1, 2027, the export rebate rate will be reduced from 6% to 0%. A rush for installations in one month is expected to bring about a growth of 40GWh+. Investment Recommendations Global lithium battery demand has been further revised up from 3031GWh to 3163GWh, with the year-on-year growth rate revised up from 32% to 38%, further enhancing the certainty of lithium battery market prosperity. In the new cycle of industry demand exceeding expectations, the market will price stock performance according to the degree of supply and demand tightness. The priority order for segment allocation is: upstream lithium mines \> midstream segments with smooth price transmission (household storage, commercial storage, systems) \> battery cells, with midstream materials focusing on leading electrolyte, copper foil, diaphragm, and other capacity barrier segments. 1. Downstream new energy vehicle production and sales are below expectations: Sales may be affected by macroeconomic factors that are not as anticipated; production may be impacted by significant fluctuations in upstream raw material prices and high electricity costs, which in turn affects the profitability and valuation of the industry chain. 2. Raw material prices have risen more than expected: Since 2021, raw material prices have continued to rise, with significant fluctuations occurring periodically. The high levels and instability of prices have a certain impact on end demand and significantly affect the profitability of companies in the industry chain. 3. Policy support is below expectations: Currently, some European countries provide corresponding subsidies for the purchase of new energy vehicles. If subsequent policy support declines, it may lead to demand release being less than expected. Xu Lin: Chief Analyst of the New Energy Vehicle Lithium Battery and Materials Industry at CITIC Construction Investment Securities, with 7 years of experience in supply chain management for OEMs and 2 years of research experience in new energy vehicles. Joined the Research and Development Department of CITIC Construction Investment Securities in 2021, mainly covering new energy vehicles and battery research. Zhu Yue: Chief Analyst of the Power Equipment New Energy Industry at CITIC Construction Investment Securities. Joined the Research and Development Department of CITIC Construction Investment Securities in 2021, with 8 years of research experience in the securities industry. Previously worked at Industrial Securities, Founder Securities, and Caijing Magazine, focusing on research of the new energy industry chain and tracking national policy interpretations. Led the team to rank highly in several authoritative industry selections such as New Fortune, Golden Unicorn, and Crystal Ball from 2019 to 2022. Securities Research Report Title: "Vehicle Storage Resonance, Upgrading Global Lithium Battery Demand for 2026 to 3163GWh, the Fundamental Turning Point Has Arrived" External Release Date: April 19, 2026 Report Issuing Institution: CITIC Construction Investment Securities Co., Ltd. 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