▲ Background and Policy Interpretation
Recent export control measures concerning lithium batteries have drawn significant attention, with this policy adjustment further highlighting the competitive edge of China's domestic lithium battery industry in the marketplace. On 9 October 2025, the Ministry of Commerce and the General Administration of Customs jointly issued an announcement declaring that export controls would be implemented on lithium batteries, battery materials, and related equipment and technologies from 8 November onwards. The scope of these controls is extensive, encompassing lithium-ion batteries and cells with energy densities of 300Wh/kg or higher, key components such as lithium iron phosphate and ternary cathode precursors, artificial graphite anode materials, and associated equipment. This policy adjustment aims to safeguard the market advantage of China's domestic lithium battery industry while ensuring the security and compliance of relevant technologies.
▲ Impact Analysis on the Lithium Battery Supply Chain
(1) For lithium batteries, the restrictions primarily target cells and battery packs with energy densities of 300Wh/kg or higher, along with equipment used in their manufacture. Notably, while no specific policies previously governed lithium batteries, only a limited number of high-end ternary power cells meet the 300Wh/kg threshold. Consequently, this policy will have relatively minor implications for energy storage and certain power applications.
(2) Regarding cathode materials, the restrictions apply to iron-lithium materials with a compacted density of no less than 2.5 g/cm³ and a specific capacity of 156 mAh/g or higher. It is worth mentioning that export controls on iron-lithium materials were previously implemented in July 2025, with technical standards of ≥2.58 g/cm³ compacted density and ≥160 mAh/g specific capacity. The current standards represent a slight tightening. Concurrently, ternary precursors, lithium-rich manganese-based materials, and equipment for manufacturing cathodes are also subject to regulation.
(3) Regarding anode materials, the scope of controls encompasses artificial graphite, anode materials blending artificial and natural graphite, and related production equipment. Anode materials were previously subject to export controls in December 2023, primarily targeting high-purity, high-strength, and high-density artificial graphite. The current restrictions represent an expansion of coverage.
▲ Long-term and short-term implications of export controls
(1) In the short term, with China's lithium battery export restrictions clarified in November, a rush to export battery cells is anticipated in October. Although lithium battery cell production requires time, we expect total demand for lithium battery cells to continue growing month-on-month this month. In the near term, policy adjustments are unlikely to exert significant downward pressure on lithium prices; rather, robust demand may provide support.
(2) From a medium-to-long-term perspective, China's lithium battery industry chain maintains robust momentum as a strategic advantage sector. While maintaining appropriate controls over the overseas transfer of high-end products, technologies, and production capacity, the overall policy stance remains positive. Though approval processes have tightened, this specifically aims to prevent disorderly overseas expansion of the industry chain. Furthermore, this may accelerate the overseas expansion of Chinese enterprises, thereby enhancing the export value of the entire lithium battery industry chain.
02 The Emergence of Domestic Industrial Strength
▲ Domestic Capacity Layout and Technology Protection
China currently holds an absolute advantage in the global lithium battery market, accounting for over 95% of worldwide exports. Export controls further consolidate the global competitiveness of domestic products and technologies. Implementing this policy helps translate domestic industrial strengths into market advantages, prevents technology leakage, and safeguards strategic resource and material security.
▲ Practical Impact of Export Policies and Corporate Responses
Export controls do not equate to a complete ban on exports. Enterprises must apply for export licences from relevant authorities and coordinate with all parties within the industrial chain. In most cases, exports can proceed normally following approval and filing. However, obtaining approvals for overseas factory construction remains challenging. Companies must adapt to the new policies to sustain exports, with technology licensing emerging as a potential future profit model.
03 Fundamentals of the Lithium Battery Industry
▲ Domestic Capacity Deployment and Technology Protection
The lithium battery sector is currently undergoing a critical phase of growth acceleration, with projections revised upwards from 20% to 25%. This primarily stems from shifts in energy storage battery production volumes. As energy storage output continues to climb, the industry's growth rate is anticipated to advance from 25% into a new phase of 30% expansion. Domestic enterprises are intensifying technological investments while simultaneously accelerating overseas localisation efforts.