As the global energy transition accelerates, the industry is embracing a new cycle of growth. IDTechEx forecasts the global lithium-ion battery market will exceed US$325 billion by 2036, representing a CAGR of 7.0%.

Beneath this prosperity, a significant shift in the nature of industry competition is quietly taking place.

The competition is evolving from a focus on individual technologies and price wars to a broader contest encompassing the entire industrial chain, global layout, and sustainable development.

01 Reshuffling Global Market Structure

The global lithium battery market is experiencing an unprecedented restructuring. In the first half of 2025, Chinese companies expanded their share of the global power battery market, with CATL and BYD leading at 37.9% and 16.4% market share, respectively.

The combined market share of the three major South Korean battery makers fell below 17%, its lowest level since 2018. This data marks a watershed in the global lithium battery landscape: demand continues to surge, but the supply side is being reconfigured.

Ge Honglin, Party Committee Secretary and President of the China Nonferrous Metals Industry Association, noted at the 2025 2nd China International Lithium Industry Conference that during the “14th Five-Year Plan” period, China’s lithium industry achieved a historic leap from “following” to “running abreast,” and even to “leading” in some areas.

The pace of capacity expansion continues. Global annual battery production capacity has jumped from nearly 500 GWh in 2020 to over 2.5 TWh in 2025 and will reach nearly 5 TWh by 2036.

02 Regional Reshaping of the Supply Chain

Amid global trade uncertainties, the lithium battery supply chain is shifting from a globalized configuration towards regionalization. This transition elevates the competition from a contest between individual companies to a race for efficiency among entire industrial chain clusters.

The core value of this regional layout is “staying close to the market, mitigating risks, and improving efficiency.” In Yibin, Sichuan, the Phase I expansion project of Times Changan, a joint investment by CATL, Changan Automobile, and Shenlan Automobile, has officially commenced production.

Similar integrated “battery-vehicle manufacturer” layouts are also accelerating in Europe. The establishment of CATL’s Hungary factory has attracted synchronous layouts from upstream material suppliers like Enjie Co., Ltd., GEM, and Huayou Cobalt, collectively building an integrated “European local supply chain.”

03 The New Frontier: Competition over Standards

As production capacity and industrial chains become regionalized, a deeper-level competition that will determine future market dominance—the competition for technical standards—has quietly begun.

The EU’s New Battery Regulation, fully implemented since 2025, mandates battery companies disclose carbon footprints, set minimum recycled material usage ratios, and establish battery passport systems.

The North American market, through the Inflation Reduction Act, is building its localized supply chain system with stringent standards from raw material溯源 (traceability) to local manufacturing.

The race is on for emerging sectors like electric aviation, where unified global safety and performance standards are still absent. Whoever takes the lead in participating and shaping the standards for this new field will secure a privileged “pass” for their technological roadmap in the future market.

04 The Next Wave of Innovation

Technological innovation remains the core driver for the lithium battery industry. Next-generation technologies like solid-state and lithium-sulfur batteries are now moving from the laboratory towards industrialization.

The lithium-sulfur battery market is projected to grow from $52.4 million in 2025 to $507.5 million by 2035, at a strong CAGR of 25.5%. This growth is primarily driven by electric vehicles, aerospace, and renewable energy storage applications.

At the China International Lithium Industry Conference, Tianqi Lithium unveiled its new solid-state battery core material, lithium sulfide, which reduces production costs to 60% of the industry average, laying the groundwork for mass application of all-solid-state batteries.

In responding to diverse market needs, Chinese manufacturers have iterated with technologies like M3P and Shenxing batteries, lowering the cost of LFP systems to 0.55 Yuan/Wh while achieving a cycle life exceeding 4,000 times, forming a competitive advantage against mid-to-high-end South Korean models.

05 Building a Resilient Future

To achieve sustainable development, the lithium battery industry must build a more resilient industrial system. Ge Honglin proposed four key suggestions at the lithium conference: collaborate on resources to build a secure and stable resource supply system; and join hands in technological cooperation to create an innovation-led industrial development system.

He also called for cooperation on environmental protection to build a green, low-carbon industrial ecosystem; and enhance industrial collaboration to forge a synergistic industrial community with a shared future.

Environmental cooperation has become imperative. China has introduced its first “Zero Waste Factory” target, aiming for a breakthrough 95% recovery rate of power battery materials by 2030.

The competition in the global lithium battery industry has transformed from a contest in singular aspects to a comprehensive systemic rivalry encompassing technology, manufacturing, supply chain, standards, and environmental sustainability.

“Making lithium batteries is easy; making high-quality lithium batteries is hard,” reminded CATL’s Robin Zeng, highlighting the persistent challenge. “The lithium battery industry has immense technical potential, but it suffers from serious homogenization and a pronounced lack of disruptive innovation.”

In this new era of system competition, only those who build robust, comprehensive capabilities will be able to “go the distance” in this marathon race.