Entering July, the traditionally recognized "off-season" for power batteries appears to be losing its relevance. According to the latest SMM data, power battery production in June continued its growth trajectory, up 9% MoM and over 65% YoY. In July, a month that typically sees a seasonal pullback, production schedules also maintained MoM growth of roughly 9%, displaying a rare "stronger-than-usual off-season" pattern across the industry. What is driving this counter-seasonal growth?
Demand Side: PHEVs and EREVs Lead the Way, Commercial Vehicles Show Strong Momentum
From the perspective of end-use demand, new orders for new energy vehicles remained robust, particularly for plug-in hybrid (PHEV) and extended-range (EREV) models, which continued to ramp up volume. With product advantages offering a balance of driving range and charging convenience, these have become key growth drivers in the current passenger vehicle market. Meanwhile, new model orders released by some automakers earlier are gradually feeding through to the battery segment, translating into tangible production schedule boosts.
The commercial vehicle sector is equally noteworthy. Driven by sustained policy support, the electrification of logistics vehicles, light trucks, and heavy-duty trucks has clearly accelerated, with full life-cycle cost advantages becoming more pronounced in high-frequency operational scenarios. After entering July, commercial vehicle demand did not weaken seasonally but instead maintained a steady growth trend, providing strong support for high-capacity LFP battery cells. The LFP system continues to dominate this round of incremental growth — on one hand, benefiting from the continued volume ramp-up of mainstream A-class and below passenger vehicles, and on the other, receiving an additional boost from the dual drivers of energy storage and commercial vehicle demand.
While the overall recovery pace for the ternary system lags behind that of LFP, marginal improvements in high-end BEV models, a new wave of export orders, and some export demand have also driven a certain rebound in ternary battery cell production among top-tier players, effectively supplementing overall industry output.
Inventory Side: Low Inventories Drive Pre-stocking Window Forward
Beyond direct demand-side drivers, inventory levels across the industry chain serve as another important supporting factor for this "stronger-than-usual off-season." Currently, overall inventory across the power battery industry chain remains at a relatively low-to-normal level (the inventory-to-sales ratio is about 1.3 months), leaving battery cell manufacturers with a thin safety margin for stockpiling. Against this backdrop, enterprises' willingness to actively build inventory has strengthened considerably — rather than waiting for the peak season to arrive and then making passive procurement under delivery pressure, it is better to lock in capacity and accumulate an inventory buffer ahead of time during the off-season window.
It is particularly worth noting that this stockpiling activity is expected to continue through August, with the core logic being early positioning for the traditional "September-October peak season." Mainstream battery cell enterprises broadly assess that the end-use consumption peak from late Q3 to early Q4 will bring concentrated cargo pick-up demand. If inventory preparation proves insufficient by then, it will directly impact delivery capabilities and market share. Therefore, the current seemingly "excessive" production schedules are essentially forward-looking, strategic stockpiling actions.
Outlook: Peak Season Stockpiling Logic Continues to Unfold, Production Hits New Highs
With dual support from both the demand and inventory sides, power battery production is expected to extend its growth trajectory in August. Structurally, LFP will remain the core source of incremental growth, while ternary battery cell output is projected to stage a steady rebound as high-end models and export orders continue to improve. Driven by the combined forces of policy support, new model volume ramp-ups, and proactive stockpiling, a "stronger-than-usual off-season" for the power battery industry is likely to become a defining feature of H2 2026, laying a solid foundation for achieving the full-year production target.
SMM New Energy Industry Research, Lithium Industry Analyst, Wang Zihan
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