Background
October 13, 2025 – China’s lithium battery stocks tumbled sharply in early October, reflecting broader industry pains as the sector grapples with export restrictions, overcapacity, and technological transitions.
Market Turmoil
On October 10, the lithium battery index plummeted 5.87%, with leading stocks like Xianfeng Intelligent (300450.SZ) crashing 12.89%. While the market slightly recovered by October 13, closing 0.83% lower, select firms such as Ganfeng Lithium (002460.SZ) surged 9.1%, signaling investor confidence in resilient players.
Key Drivers of the Sell-off
Export Controls Shock
China’s sudden export restrictions on high-performance lithium batteries (≥300Wh/kg) and manufacturing equipment triggered panic.
Analysts estimate 30%+ of industry revenue relies on overseas markets, raising fears of long-term revenue erosion.
Overcapacity & Price Wars
Global lithium battery capacity now triples demand (2023 data), squeezing margins.
Inventory write-downs and contract breaches plagued midstream firms amid volatile lithium carbonate prices.
Tech Transition Risks
Solid-state battery breakthroughs (e.g., BYD’s 2027 roadmap) threaten traditional lithium-ion producers.
Industry Outlook
Short-term pain: Weak Q4 earnings expected as firms digest policy impacts.
Long-term resilience: Leaders like CATL and Ganfeng are pivoting to solid-state R&D and global partnerships (e.g., CATL’s Spain plant).
Closing Note: The slump underscores China’s lithium battery sector at a crossroads—balancing security policies, innovation, and global competitiveness. Investors are advised to focus on firms with tech moats and overseas diversification.