GF Securities: Energy storage demand drives cycle reversal, and batteries and materials usher in new opportunities

The Zhitong Finance App learned that GF Securities released a research report saying that domestic passenger cars are growing steadily and commercial vehicles are rapidly penetrating, and the new overseas model cycle is driving demand exceeding expectations. 30% is the core critical growth threshold for the current balance between supply and demand in the lithium battery industry. Currently, it is estimated that the total demand for lithium batteries will reach 2,495 GWh in '26, which is +28% compared to 1944 GWh in '25. The bank is optimistic that power and energy storage demand will jointly drive the reversal of the lithium battery cycle, and both batteries and materials are expected to usher in new opportunities for development.

The main views of GF Securities are as follows:

Momentum: Steady growth of domestic passenger cars+rapid penetration of commercial vehicles, demand exceeded expectations due to the new overseas model cycle

Looking at the subregions: (1) China: The rush to install in 25 years led to a high increase in demand. It is expected that passenger cars will grow steadily in '26, commercial vehicles will rapidly penetrate, and the increase in the battery capacity of bicycles will contribute additional growth. (2) US: The 25-year Great and American Act and FEOC provisions have adjusted to suppress market demand, and growth is expected to slow in '26. (3) Europe: The electrification rate accelerated in 25 years, and the 26-year Carbon Emissions Act+new model cycle drove growth. (4) Other regions: Intensive release of policy dividends to promote an increase in electrification rates. The bank estimates that global power battery demand in 25-27 was 1253.4/1520.5/1834.2 GWh, with a year-on-year growth rate of 26%/21%/21%.

Energy storage: Capacity electricity prices improve the domestic large storage business model, and the economy drives the growth of overseas energy storage

Looking at the subregions: (1) China: promotion of capacity electricity price policies and rapid growth in domestic demand for large storage; (2) US: the rules of the Big and American Act have not yet been introduced, and data center storage is expected to contribute to the increase; (3) Europe: frequent negative electricity price shocks+urgent need for flexible resources, and the development of large storage is expected to accelerate; (4) Other regions: orders for overseas energy storage projects from domestic enterprises are growing rapidly. The economic efficiency of domestic energy storage projects+foreign energy storage is economical, opening up room for long-term growth. It is estimated that the global energy storage capacity will reach 279/423/563GWh in 25-27, 44/52/ 33% year on year, and global energy storage battery shipments will reach 544/824/1098 GWh in 25-27, +73/52/33% year on year.

Supply: It is expected to be in a tight balance for 26 years, and industrial chain profits are expected to recover

The profitability of leading companies is poor, the will to expand production is insufficient, and the prices of main and auxiliary materials generally rise during the peak demand season. The bank believes that 30% is the core critical growth threshold for the current balance between supply and demand in the lithium battery industry. Currently, it is estimated that the total demand for lithium batteries will reach 2,495 GWh in '26, +28% compared to 1944 GWh in '25, and is still in a tight balance between supply and demand; once the demand growth rate exceeds 30%, the supply side will quickly fall into a state of shortage.

Solid-state batteries: the material side focuses on the electrolyte and anode links

(1) Electrolytes: Currently, lithium sulfide accounts for about 77 to 80% of the cost of sulfide electrolytes. In the long run, the cost advantage of raw materials gradually disappears with the expansion of production and self-supply, and there is more room for cost reduction; (2) Negative electrode: lithium metal anodes can greatly increase battery energy density. Currently, they are partially used in domestic and foreign solid state batteries, and anode-free technology is a special form of lithium metal anode. On this basis, costs can be further reduced and increased.

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