I. Industry Overview: High Growth Momentum Continues in the New Energy Sector, but Growth Logic Shifts

In 2025, the global NEV and power battery industries continued to operate with high growth momentum, with the overall industry scale further expanding. From a macro environment perspective, the global new energy sector is simultaneously influenced by multiple factors: first, the NEV penetration rate in major economies has reached a medium-to-high level, leading to a natural slowdown in marginal growth rates; second, rising trade frictions, geopolitical tensions, and industrial security demands are gradually shifting the new energy industry from "prioritizing globalized efficiency" to "balancing security, compliance, and localization"; third, price cyclical fluctuations in the industry chain are becoming more frequent, with ongoing competition between upstream resources and midstream manufacturing segments. Against this backdrop, 2025 marks a critical year for the new energy industry's transition from a "phase of rapid expansion" to a "phase of structural competition." Overall, the NEV market remains highly sensitive to policies.

II. Global NEV Market: Overall Growth Continues, with Significant Regional Divergence in Pace

From a global perspective, passenger NEV sales continued to grow positively in 2025, but the growth pace and driving factors varied significantly across regions.

From the passenger vehicle perspective, the Chinese market remains the "ballast stone" of global NEV demand. Driven by continuous product upgrades and a gradual downward trend in pricing, the penetration rate of NEVs in the Chinese passenger vehicle market further increased, with NEV car models gradually covering mainstream consumer segments. In contrast, the European market, amid subsidy phase-outs, anti-subsidy investigations, and ongoing debates over carbon emission policies, saw positive NEV sales growth compared to the previous year, but the auto sales growth rate fell short of market expectations, making it a year of mild recovery overall. The US market exhibited clear policy-driven characteristics. The IRA Act continued to steer investments in the NEV and power battery industry chain toward localization, with NEV sales growth largely dependent on subsidies, tax incentives, and local supply chain development. However, in July this year, the US government passed the One Big Beautiful Bill Act (OBBBA), which eliminated tax credits for NEVs. The subsequent development of the US NEV market, now lacking policy support, is viewed with considerable pessimism.

Overall, the global NEV market has shifted from "synchronized high growth" to "regionally divergent operation," with differences in policies, costs, and product structures across markets profoundly impacting automakers' product and capacity planning.

III. Chinese NEV Market: Strong Domestic Demand Resilience and Ongoing Structural Upgrades

In 2025, domestic sales of passenger NEVs in China demonstrated overall stability, with notable resilience in market demand. Demand structure-wise, mid- to low-priced new energy car models continued to see volume growth, with new energy vehicles gradually shifting from "policy-driven consumption" to "cost-performance-driven consumption."

In terms of model structure, A- and B-segment BEV models remained the core support for new energy sales, while plug-in hybrid electric vehicles (PHEVs) performed particularly prominently throughout the year. PHEV models balance driving range, refueling convenience, and vehicle cost while adapting to more usage scenarios, demonstrating clear advantages especially in regions with underdeveloped charging infrastructure or larger usage radii.

From the consumer side, acceptance of new energy vehicles continued to rise in both first-time household purchases and additional purchases, with users paying significantly more attention to battery safety, usage costs, and residual value stability. This has, to some extent, boosted the preference for LFP systems and plug-in hybrid models.

IV. New Energy Vehicle Exports: Concurrent Growth in Volume and Restructuring

In 2025, China's new energy vehicle exports maintained rapid growth, but the export structure underwent significant changes. Influenced by Europe's anti-subsidy investigations and additional tariffs on Chinese BEVs, automakers proactively adjusted their product mix in export strategies.

Specifically, BEV exports faced rising compliance and tariff costs, weakening their price competitiveness in some overseas markets. In contrast, PHEV models, not subject to the relevant anti-subsidy tariffs, encountered relatively smaller export resistance, becoming a key option for automakers' exports. Against this backdrop, China's new energy vehicle exports gradually shifted from "BEV-dominated" to a new pattern of "PHEV and BEV coexisting, with PHEV share increasing."

This change not only affected the structure of vehicle exports but also had a profound impact on the demand structure for power batteries.

V. Power Battery Demand: Installations Hit a Record High, Demand Center Significantly Shifted Upward

Driven by the sustained growth in new energy vehicle sales, power battery installation demand remained high overall in 2025, with the industry's demand center noticeably higher than in previous years.

Application-wise, passenger vehicles remained the core source of power battery demand; the commercial vehicle sector, supported by both policy incentives and improved economics, provided an important supplement to power battery demand. Logistics vehicles, urban distribution vehicles, and battery-swapping heavy-duty truck projects showed phased concentrated releases throughout the year, boosting battery capacity per vehicle and providing structural boosts to power batteries.

Notably, the rapid growth in ESS battery demand had an "indirect impact" on the power battery industry. Some battery cell capacity shifted toward the ESS sector, leading to a relatively restrained supply pace for power batteries, which, to some extent, alleviated phased supply pressure in the power battery field.

VI. Supply-Demand Pattern: Production Schedules Remain High, Industry Competition Becomes More Rational

Supply side, the pace of capacity expansion in the power battery industry in 2025 slowed down significantly compared to previous years. After large-scale expansions, top-tier enterprises focused more on capacity utilization rates and order quality rather than simply pursuing scale expansion.

Against the backdrop of relatively stable demand and slowing supply expansion, the supply-demand pattern of the power battery industry improved markedly compared to earlier periods. For most of the year, the industry operated with "full production schedules and controllable inventory levels," leading to a more stable price system and a reduction in extreme price competition.

VII. Technology Route Evolution: LFP System Dominates Overall, Ternary System Stabilizes Structurally

From a technology perspective, LFP batteries remained the absolute mainstay of the power battery market. Their comprehensive advantages in cost, safety, cycle life, and compatibility with plug-in hybrid car models continued to expand their application in passenger and commercial vehicles.

As the LFP system continued to improve in energy density and fast-charging performance, its application scenarios extended to higher-end car models, further consolidating its dominant market position.

For ternary batteries, although their overall market share was unlikely to return to previous highs, demand remained relatively stable in high-end BEV models, some export models, and applications requiring high energy density. In 2025, the ternary system overall showed signs of "bottoming out and structural recovery" rather than a continued decline.

VIII. Industry Chain Prices: Cost Fluctuations Dominate, Battery Cell Prices Show Enhanced Resilience

In 2025, the price dynamics of the power battery industry chain were primarily cost-driven. Prices of upstream lithium chemicals saw periodic strength due to supply disruptions, resource-side negotiations, and market sentiment, which gradually transmitted to cathode materials, electrolytes, and other segments, increasing battery cell manufacturing costs.

Against this backdrop, power battery cell prices generally held up well. Battery enterprises mitigated raw material price volatility risks through periodic price adjustments, long-term agreement lock-ins, and customer structure optimization, leading to some recovery in industry profit levels compared to earlier periods.

IX. Global Policies and Industry Dynamics: Compliance Costs Become a Core Variable

In 2025, the global policy environment for the new energy industry became significantly more complex. The implementation of European anti-subsidy investigations, battery passports, carbon emission assessments, along with the US strengthening its local supply chain security through subsidies and tariff policies, profoundly impacted the global layout of the new energy industry.

In this context, vehicle manufacturers and battery plants accelerated the layout of overseas capacity and supply chains, reducing trade and policy risks through localized production and compliance investments. The competitive logic of the new energy industry is evolving from "competition based on cost advantages" to a comprehensive competition stage of "cost + compliance + global delivery capability."

X. Annual Summary and Outlook: High Growth Momentum Continues, Structural Competition Becomes the Main Theme

Overall, in 2025, the power battery and new energy vehicle (NEV) industries remain in a high-growth cycle, but industry growth has clearly entered a phase of "structural competition." The penetration rate of NEVs continues to rise, and power battery demand fluctuates at highs, while differentiation in technology routes, regional markets, and policy environments intensifies.

Looking ahead, the industry will enter a new stage characterized by stabilizing growth rates, intensified competition, and deepening global competition. Enterprises with scale advantages, cost control capabilities, and overseas compliance and delivery capabilities are expected to continuously expand their leading advantages in the new round of industrial competition.