Lithium carbonate prices and energy storage cell costs continued to decline in recent months as the battery supply chain adjusts to expectations of stronger supply and a possible market surplus in 2027. According to InfoLink’s latest Energy Storage Supply Chain Price Forecast Report, market sentiment is gradually shifting from concerns over short-term inventory levels toward expectations of improved long-term supply.

The average price of battery-grade lithium carbonate is expected to remain around RMB 140,000 per tonne in August. However, prices could recover slightly to RMB 145,000–150,000 per tonne during September and October, supported by seasonal demand and restocking activity. Looking further ahead, InfoLink expects the lithium market to move into a slight surplus in 2027, with prices potentially easing to RMB 110,000–130,000 per tonne during the first half of the year.

Energy storage cell prices have also extended their decline amid lower raw material costs and strong competition among manufacturers. In July, the tax-inclusive average price of 280 Ah lithium iron phosphate (LFP) energy storage cells fell 4% month over month to RMB 0.360/Wh. The average price of 314 Ah cells also declined 4% to RMB 0.360/Wh. Meanwhile, 100 Ah cells averaged RMB 0.443/Wh, representing a 2.7% monthly decline.

Lower cathode material prices have further supported cost reductions. The price of LFP cathode material for energy storage fell to approximately RMB 52,700 per tonne, bringing the tax-inclusive production cost of energy storage cells to around RMB 0.312/Wh.

China’s energy storage cell exports also remained competitively priced. In July, average FOB prices for exported 280 Ah, 306 Ah and 314 Ah LFP cells were USD 50.3/kWh, USD 51.0/kWh and USD 50.0/kWh, respectively. The declines in export prices were smaller than those recorded in China’s domestic market.

Policy changes are expected to influence battery costs going forward. China will introduce a 2% consumption tax on lithium-ion batteries from September 1, 2026, increasing to 4% from September 1, 2027. Meanwhile, U.S. tariffs on China-origin lithium-ion battery systems are estimated at around 40.9%, providing a baseline for cost assessments.

Overall, continued supply growth, falling material costs and intense manufacturing competition are expected to keep pressure on lithium and energy storage prices, while demand growth could provide some near-term support.