Lithium Battery Industry Split: Giants Expand Capacity Aggressively While Many Projects Halt Abruptly

On October 21, CATL (300750) disclosed its Q3 report, with total revenue reaching 104.2 billion yuan in Q3, up 12.9% YoY, and net profit attributable to shareholders of the publicly listed firm at 18.55 billion yuan, up 41.2% YoY. Alongside the report, the company mentioned that to cope with surging customer order demand, it is fully advancing global capacity construction.

According to CATL, its domestic bases in Jining, Shandong; Ruiqing, Guangdong; Yichun, Jiangxi; Xiamen, Fujian; Qinghai; and Ningde, Fujian have all undergone significant capacity expansion. The Jining, Shandong base alone is expected to add over 100 GWh of ESS capacity by 2026.

Overseas, the first production line equipment for Phase 1 of the Hungary plant has entered commissioning and is expected to be completed and installed by the end of 2025. The Spain plant has completed preliminary approval procedures and formally established a joint venture, with factory construction set to begin soon. The Indonesia battery industry chain project has a planned capacity of 15 GWh, suitable for power and ESS applications, and is scheduled to begin operation in H1 2026.

Recent reports from CCTV News indicated strong domestic demand for ESS battery cells, with leading battery enterprises stating that their factories are operating at full capacity, and some orders are scheduled until early next year.

CATL’s aggressive expansion reflects that this round of capacity growth differs from previous industry-wide expansions, showing characteristics of "concentration among leading players and scaling up." Rapid technological iteration is the core driver behind this capacity expansion, and leading enterprises are undergoing capacity upgrades. On the other hand, many projects were still forced to terminate or delay in Q3, indicating intensified industry divergence.

This seemingly contradictory phenomenon reflects that the battery and new energy industry has entered a critical transition period of rational adjustment.

SEMCORP Terminates Lithium Battery Project

On September 4, SEMCORP (002812) announced its decision to terminate the "Jiangsu Ruijie Power Automotive Lithium Battery Aluminum Plastic Film Industrialisation Project" and permanently allocate the net remaining raised funds of 284 million yuan, along with related interest income, to supplement working capital for daily operating activities related to its main business. It is reported that the project was a fundraising initiative by SEMCORP in May 2023 through a private placement of RMB ordinary shares (A-shares) to specific investors, with a total investment of 1.6 billion yuan. By the end of June 2025, 566 million yuan had been invested; of which 762 million yuan was planned to be raised, and by the end of June 2025, 477 million yuan had been raised.

Regarding the reasons for the project's termination, SEMCORP stated that it was mainly due to intensified competition in the industry chain in recent years and declining prices across all segments. The company believed that continuing the project might face the risk of not meeting the expected return on investment.

Shandong Fengyuan Chemical Terminates High-Energy Cathode Material Project

On August 30, Shandong Fengyuan Chemical (002805) announced that in 2023, the company's board of directors approved its wholly-owned subsidiary, Shandong Fengyuan Lithium Energy Technology Co., Ltd. (hereinafter referred to as "Fengyuan Lithium Energy"), to sign an Investment Agreement with the People's Government of Gejiu City, Yunnan Province, to construct a 50,000 mt integrated high-energy cathode material project for lithium batteries at the Chongposhao New Materials Industrial Park.

On August 29, the board of directors of Shandong Fengyuan Chemical agreed that its wholly-owned subsidiary, Fengyuan Lithium Energy, would negotiate with the People's Government of Gejiu City to terminate the contract and cease the external investment matters between Fengyuan Lithium Energy and Gejiu City.

Shandong Fengyuan Chemical stated that since signing the relevant investment agreement with the partner, the company actively promoted the implementation of the project and maintained continuous communication and discussions with the partner. However, due to changes in the policy environment and other factors, the company failed to complete the preliminary approval procedures for the project. As a result, the project has not made any substantial progress, and the initial investment was relatively small, with no further capital being continuously invested. To effectively control the risks of external investments, rationally allocate funds, and genuinely protect the interests of the company and all shareholders, based on the principle of prudence, the company decided to terminate the aforementioned external investment matters.

Jiangsu Guotai Plans to Terminate 400,000 mt Electrolyte Project

On August 23, Jiangsu Guotai (002091) announced that its subsidiary, Ningde Guotai Huarong New Materials Co., Ltd. (referred to as "Ningde Huarong"), plans to terminate the construction of an 400,000 mt/year lithium-ion battery electrolyte project. This project has not yet officially commenced construction, and the company is currently actively coordinating with the government on subsequent land-related work.

Regarding the reasons for the project termination, Jiangsu Guotai stated that the 400,000 mt per year lithium-ion battery electrolyte project was to be implemented by its subsidiary, Ningde Huarong. Ningde Huarong successfully acquired the state-owned construction land use rights for plots D-43 and D-67, covering an area of 120,985 m² in the Dianxia Long'an area of Fuding City, in March 2023. However, as of now, the land has still not been delivered by the date specified in the "State-owned Construction Land Use Right Grant Contract" (Supplementary Contract Terms), leaving the project without a foundation for further progress. Ningde Huarong is currently actively coordinating with the government regarding the follow-up work on the land.

At the industry level, in recent years, capacity expansion in the lithium-ion battery materials sector has significantly outpaced the growth in market demand, leading to periodic surplus capacity, intense market competition, and a continuous decline in electrolyte product prices. Industry profit margins have been substantially compressed.

Under the current market conditions, Jiangsu Guotai anticipates that the project's capacity would be difficult to absorb, with a significant decline in the return on investment, making it challenging to achieve the originally planned profit targets. To optimize resource allocation, improve capital utilization efficiency, and maximize the interests of the company and all shareholders, the company, after prudent consideration, decided to terminate the capital increase in Ningde Huarong for the construction of the 400,000 mt per year lithium-ion battery electrolyte project.

Dowstone Technology Pauses Ternary Precursor Project Construction

On August 13, Dowstone Technology (300409) announced that the company plans to reassess and temporarily suspend the implementation of the "100,000 mt per year ternary cathode precursor project (Phase I: 70,000 mt of ternary cathode precursor and 30,000 mt of nickel sulphate)" and the "Dowstone New Energy Recycling Research Institute Project." The company believes that the current timing is not optimal for continuing to invest in the remaining capacity of this project and has decided to reassess and temporarily suspend the project, while fully shifting R&D resources towards the development of solid-state battery-related material technologies.

Subsequently, on August 19, Dowstone Technology announced again that, based on the company's long-term strategic plan and current development needs, it intends to reallocate the unutilized raised funds of 30,000.00 yuan from the original fundraising project "100,000 mt per year ternary cathode precursor project (Phase I: 70,000 mt of ternary cathode precursor and supporting 30,000 mt of nickel sulphate)" to the "120 mt per year single-wall carbon nanotube project."

Kexin Technologies Terminates Construction of ESS Lithium Battery Project

On the evening of August 1, Shenzhen Kexin Communication Technologies Co., Ltd. (300565) announced that the company held a board meeting and agreed to reallocate 366 million yuan of unused raised funds from the "ESS Lithium Battery System R&D and Industrialisation Project" to the "Data Center Green and Low-Carbon Technology Upgrade Project." This proposal still requires approval at the company’s shareholders’ meeting.

According to the announcement, the original "ESS Lithium Battery System R&D and Industrialisation Project" was planned to involve Kexin Technologies purchasing production and R&D equipment to further expand ESS lithium battery system capacity, actively conduct research on new materials, technologies, and products in the ESS industry, and provide development momentum for the company’s deep involvement in the ESS business and participation in the electrochemical ESS market competition. Upon full completion and reaching full production, the project was expected to add 2GWh of ESS lithium battery cell and system assembly production lines along with related supporting capacity. The total investment for the project was 54,000.34 million yuan, with a construction period of 24 months. The company originally planned to use 44,017.71 million yuan in raised funds, with the adjusted total raised fund investment amounting to 36,134.15 million yuan. The implementing entity was the company’s subsidiary, Guangdong Kexin United Power Co., Ltd., and the expected operational date was January 8, 2026.

Regarding the reasons for changing the original fundraising project, Kexin Technologies stated that the original project was planned relatively early, and significant changes in the market environment, along with intensified competition in the ESS industry, increased the uncertainty of the original project’s investment. After detailed surveys and evaluations, the company decided to reallocate the raised funds to the "Data Center Green and Low-Carbon Technology Upgrade Project," which has already undergone pilot testing and market validation. Meanwhile, the company is gradually adjusting its ESS product strategy, focusing on highly integrated, high-value-added system-level ESS products in the future, while adopting a more cost-effective external purchase model for basic components such as battery cells and modules.

Anfu Technology Terminates Joint Venture to Build All-Solid-State Battery Pilot Production Line

On July 18, Anfu Technology (603031) announced the termination of the joint venture to establish a new-type battery pilot platform company. According to the announcement released by Anfu Technology in March this year, the company's controlling subsidiary, Fujian Nanping Nanfu Battery Co., Ltd. (hereinafter referred to as "Nanfu Battery"), intends to sign a joint venture agreement with Nanping Green Industry Investment Fund Co., Ltd. (hereinafter referred to as "Nanping Green Industry Fund") and High Energy Times (Guangdong Hengqin) New Energy Technology Co., Ltd. (hereinafter referred to as "High Energy Times") to jointly establish a new-type battery pilot platform joint venture company (hereinafter referred to as the "Joint Venture"), aiming to jointly promote the R&D and industrialisation of all-solid-state battery technology and fully build a leading domestic R&D and application demonstration platform for all-solid-state batteries.

The Joint Venture is 51% owned by High Energy Times, 30% by Nanping Green Industry Fund, and 19% by Nanfu Battery. According to the tripartite agreement, the parties would establish the Joint Venture to jointly build and operate a 300MWh sulphide-based all-solid-state battery pilot production line.

Transaction progress shows that shares of the controlling shareholder of High Energy Times, one of Anfu Technology's partners, were frozen, indicating significant uncertainty regarding its operational stability and contract performance capability, which may lead to project operational risks.

Wanrun New Energy's 5-Billion-Yuan Battery Materials Project Terminated

On the evening of July 14, Wanrun New Energy (688275) announced that in July 2023, the company signed an Investment Letter of Intent with the Wuhan Chemical Industry Park Management Committee, planning to invest approximately 5 billion yuan to construct the Wuhan R&D Technology Center and Industrialisation Base Project in Qingshan District, Wuhan. The project included the R&D and mass production of key materials for lithium-ion batteries, sodium-ion batteries, solid-state batteries, and hydrogen ESS.

The announcement indicated that, as the two-year validity period of the Investment Letter of Intent had expired and the project had not yet commenced with no further plans for implementation, it was confirmed through mutual communication that the project would automatically terminate upon expiry without renewal.

Wanrun New Energy stated that the decision to terminate the investment project was a prudent one made in consideration of market conditions, the company's development strategy, and actual circumstances. It fully accounted for both external market changes and internal resource optimization needs, aiming to reduce investment risks, improve operational efficiency, and ensure the company's sustained, stable, and healthy development. The termination will not adversely affect the development of the company's existing business, nor does it harm the interests of the company and all shareholders, particularly minority shareholders.

PRET's 10.2 Billion Yuan Battery Project Terminated

On July 1, PRET (002324) announced that its controlling subsidiary, Jiangsu Highstar Battery Manufacturing Co., Ltd. (hereinafter referred to as "Highstar"), signed the "Termination Contract for the Investment Project Cooperation Contract" with the Hunan Liuyang Economic and Technological Development Zone in June 2025. Due to changes in the macro environment of the new energy industry in recent years, both parties negotiated and agreed to terminate the investment project. This termination will result in the company recovering corresponding land transfer fees, deed tax, and deposits.

Battery Network noted that the project was initially signed in June 2023 and planned to construct a sodium-ion and lithium-ion battery and system production site in Liuyang, Hunan. However, as of now, no substantial construction has commenced.

The announcement released by PRET at that time indicated that the project originally planned to invest in building a production site project with annual capacity of 30 GWh sodium-ion and lithium-ion battery and system in the Hunan Liuyang Economic and Technological Development Zone. The construction was to be carried out in three phases: the first phase involved an investment of approximately 3 billion yuan to build a 12 GWh prismatic battery project; the second phase involved an investment of approximately 3 billion yuan to build a 6 GWh cylindrical battery project; and the third phase involved an investment of approximately 4.2 billion yuan to build a 12 GWh prismatic battery project.

PRET stated that due to changes in the macro environment of the new energy industry, the company's strategic direction in the new energy sector is continuously being optimized. The termination of this project investment will not adversely affect the company's existing production, operations, or financial performance, nor will it impact the development of the company's new energy business. The company currently maintains good operational conditions across all aspects and will continue to focus on the strategic development of sodium-ion batteries and solid-state batteries. Meanwhile, strategic cooperation has been established with top-tier enterprises in the industry for both sodium-ion batteries and semi-solid-state batteries, with orders being delivered progressively. In the future, the company aims to become a leading enterprise in the sodium-ion battery and semi-solid-state battery industry.

Conclusion:

• It is important to note that project termination does not signal industry decline but rather reflects market self-regulation and optimized resource allocation. Examining projects terminated in Q3, most were concentrated in areas with relatively low technical content and severe homogenization. Some companies have redirected their original project investment funds towards new-type technological routes, leading to the continuous emergence of innovative projects. Amid this market differentiation, enterprises must shift from merely pursuing capacity scale to focusing on precision in technological innovation, cost control, and market positioning. Those that can quickly adapt to changes, master core technologies, and establish differentiated competitive advantages will stand out in the industry reshuffle.
• Under the global trend toward carbon neutrality, the battery and new energy sector remains one of the most promising strategic emerging industries. The current wave of project terminations is merely an episode in the long-term development of the industry. After undergoing this profound adjustment, China’s battery and new energy industry will become more mature and competitive, contributing even greater strength to achieving the "dual carbon" goals.

Please note that this news is sourced from https://www.itdcw.com/news/top/10231514922025.html and translated by SMM.