Year-start surge: Prices of lithium carbonate and nickel both break through the RMB150,000/ton mark and impact on batteries for pure electric and hybrid vehicles
At the beginning of 2026, the market for key raw materials of new energy batteries witnessed a strong upward trend. The main contract of lithium carbonate futures broke through 147,000 yuan per ton, with some contracts even reaching a high of 152,000 yuan per ton; the main contract of nickel futures on the Shanghai Futures Exchange also surpassed 147,000 yuan per ton, with multiple contracts' prices climbing above 150,000 yuan per ton.
This price performance has exceeded the forecast range given by most market institutions by the end of 2025, drawing intense attention from the entire new energy industry chain. The prices of lithium carbonate and nickel, which are core raw materials for power batteries, have risen sharply simultaneously, which will directly be passed on to the production cost of batteries, and further affect the pricing and promotion pace of new energy vehicles and energy storage systems.
The current round of price hikes has been jointly driven by multiple factors, including favorable policies, geopolitical risks, and changes in the supply and demand pattern.
Policies provide solid support for the lithium battery industry chain:
On December 30, 2025, the National Development and Reform Commission and the Ministry of Finance jointly issued the "Notice on Implementing Large-scale Equipment Upgrading and Consumer Goods Trade-in Policies in 2026", clearly extending the subsidy policy for trading in old cars for new ones and changing the subsidy for passenger vehicles from a fixed amount to a proportionate one, directly stimulating the potential of terminal consumption.
Subsequently, the "Action Plan for Comprehensive Solid Waste Management" issued by China State Council stipulated that, in principle, no more beneficiation projects without self-owned mines or supporting tailings disposal facilities would be approved. This policy raised the industry threshold, directly affecting the production capacity of some small and medium-sized lithium mines in Jiangxi Province and further tightening the supply outlook.
The problem of supply bottlenecks is particularly prominent. Regarding lithium carbonate, 27 mining rights in Yichun area have been announced to be cancelled, and the resumption of production at CATL's Jianxiawo lithium mine is expected to be postponed until June 2026.
The operating rate of lithium extraction from spodumene has dropped to approximately 30%, and the output from the spodumene end has decreased significantly due to tight supply of ore. The nickel market has been significantly affected by policy adjustments in Indonesia. Indonesia plans to sharply reduce its nickel ore production target for 2026 from 379 million tons to 250 million tons, a cut of 34%.
Geopolitical factors have injected a risk premium into the market: The incident of the Venezuelan president being forcibly controlled by the United States and the security situation in Mali have raised market concerns over the stability of key resource supplies, pushing up the overall risk premium of the non-ferrous metals sector.
On the demand side, the explosive growth of the energy storage market has become a new engine for lithium demand. Lithium demand in the energy storage sector is expected to surge by 71% in 2025 and reach a growth rate of 55% in 2026. Energy storage is now emerging as the core driver of lithium demand.
From the lithium carbonate supply and demand balance sheet, global lithium carbonate demand is expected to increase by 30% to 1.9 million tons in 2026, while the supply side can only grow by about 250,000 tons. Supply and demand will achieve a basic balance. This fundamental situation provides a basis for price increases. If the demand growth rate exceeds expectations and breaks through 30%, the supply side will be unable to match it quickly in the short term, and the supply gap may further drive up prices.
The nickel market is also facing expectations of supply contraction. Indonesia's nickel ore quota reduction policy may lead to a reversal of the nickel supply and demand relationship by 2026, shifting from oversupply to balance or even shortage. However, the current global refined nickel inventory remains at a high level. As of the end of 2025, the LME nickel inventory stood at 254,000 tons, at a multi-year high. High inventory levels may suppress the potential for price rebounds.
Impact on downstream battery enterprises
Lithium carbonate and nickel, as core raw materials for the cathode of power batteries, their simultaneous price increase will significantly raise the production cost of batteries. According to industry estimates, the upper limit of the price of battery cells is approximately 0.45 yuan per watt-hour, corresponding to a lithium carbonate price of 133,000 yuan per ton. The current price has exceeded this threshold, which will put pressure on battery enterprises' cost control and production scheduling plans.
In the face of rising costs, battery companies' production plans have diverged. Currently, leading energy storage enterprises have their orders fully booked until the first quarter of 2026 and are negotiating for the second quarter's orders. The production of energy storage cells remains at a high level. However, the battery sector for electric vehicles may face greater challenges. If the consumer end of new energy vehicles fails to effectively absorb the cost increase, battery companies may be forced to adjust their production schedules.
The ability to pass on costs is a key factor in determining the profitability of downstream enterprises:
The bargaining space for battery enterprises to pass on costs to vehicle manufacturers depends on multiple factors: the sales prosperity of new energy vehicles, the pricing strategies of competitors, and the degree of technological differentiation of batteries, etc. In a highly competitive market environment, it is difficult to fully pass on cost pressures.
To cope with the fluctuations in raw material prices, battery enterprises are actively seeking diversified response strategies. CATL announced that it will apply sodium batteries on a large scale in multiple fields such as battery swapping and passenger vehicles by 2026, building a new industrial pattern of "parallel development of sodium and lithium batteries". This diversified technological route helps enterprises reduce their reliance on a single raw material and enhance their risk resistance.
Battery enterprises also stabilize supply through long-term orders and vertical integration. Shengxin Lithium Energy signed an agreement with Huayou Holding Group, stipulating the purchase of 221,400 tons of lithium salt products from 2026 to 2030. Midstream material enterprises are also accelerating vertical integration. For instance, Longpan Technology plans to build a 240,000-ton high-density lithium iron phosphate production base.
The transportation and logistics sector also faces challenges:
The insufficient transportation efficiency of African lithium mines and the rising transportation costs of South American salt lake products have both increased the uncertainty of the supply chain. Geopolitical factors have further complicated logistics security, such as the security situation in Mali affecting the supply stability of the Goulamina and Bougouni lithium mine projects.
Facing the high operation of raw material prices, battery enterprises have begun strategic adjustments. CATL is promoting the large-scale application of sodium batteries, BYD is strengthening vertical integration to control the supply chain, and Guoxuan High-Tech is actively laying out overseas resources. These measures reflect the forward-looking layout of enterprises in response to the fluctuations in raw material prices.
The profit distribution pattern across the industrial chain will also be reshaped. Upstream mining enterprises will enjoy the benefits of rising prices, midstream material enterprises will maintain their gross profit through technological cost reduction and vertical integration, while downstream battery enterprises will need to balance the pressure through product innovation and cost pass-through. In this process, enterprises with technological leadership and controllable resources will have a more competitive edge.
For a period of time to come, the prices of lithium carbonate and nickel are likely to remain at high levels with increased volatility, which will become the new normal. Enterprises in the new energy industry chain need to strengthen supply chain management, flexibly adjust their procurement strategies, and at the same time increase technological innovation and research and development of alternative materials to cope with the challenges brought by fluctuations in raw material prices.