The lithium battery industry chain in July presents a highly contradictory picture. On one hand, the futures price of lithium carbonate once surged to the threshold of 80000 yuan/ton, driving the rebound of ore prices; On the other hand, this wave of price increases abruptly came to an end in the battery sector, ultimately being blocked by weak terminal demand.

An expected supply clearance ultimately evolved into a demand swing in reality. Under the mismatch between upstream and downstream operations in the industrial chain, profit squeeze and expected correction are gradually opening up.

Price is the most direct factor affecting the production and supply of upstream raw materials. In July, the rise in lithium carbonate prices quickly eased the cost pressure on smelters, resulting in a further increase in supply.

Data shows that in July, China's total lithium salt production exceeded 70000 tons, with a month on month growth rate of over 7%. Among them, Sichuan Province, which uses spodumene as raw material and has a greater relative cost advantage, has significantly increased its production by over 40%.

The price stimulus is also clearly transmitted to the mining end: the CIF price of imported spodumene concentrate (5.5% -6%) increased by about 18% in July.

The price of lithium carbonate has rebounded, and the pricing of lithium mines follows the trend of "ore follows lithium". The economic law that price increases lead to an increase in supply has once again been verified.

And the expectation of this supply growth is global. The two largest lithium mines in Australia have both raised their production guidelines for the 2026 fiscal year, while emerging markets such as Africa are also entering a phase of production ramp up.

At the same time, the pressure of rising costs on the raw material side has not been successfully transmitted to the downstream of the lithium battery industry chain.

In July, the price increase of lithium carbonate pushed up the raw material cost of lithium iron phosphate cathode material by about 2000 yuan/ton. However, at the same time, there have been signs of weakening in battery prices since June.

At the same time as the inversion of costs and prices, the competitive landscape of the industry has not improved. A noteworthy signal is that in the first half of this year, the concentration of the automotive and power battery industries has decreased instead of increased. Among them, the proportion of vehicles installed by the top ten power battery companies decreased by 2.5 percentage points compared to the same period last year.

This indicates that the expected "survival of the fittest" integration in the industry has yet to occur, and the price competition among enterprises for market share has continued, further testing the profitability of the entire industry chain.

The real chill comes from the end market. The sales of new energy vehicles are sliding from a "slowing growth rate" to a "decreasing scale" range.

Data shows that in the first 20 days of July, the retail sales of new energy vehicles in the national passenger car market decreased by 12% month on month. The performance of major enterprises in the industry is more cautionary:

In June, market news spread that BYD and others began to reduce production, while their sales in July showed a month on month decline of about 10%; Ideal Automobile, which once made great strides with its extended range technology route, experienced a double decline in delivery volume in July, with a year-on-year decrease of nearly 40%.

The weakness in demand is the result of multiple factors combined. Firstly, the "trade in" subsidy policy, which is a key driver of demand, will shift towards "orderly promotion" in the second half of the year to avoid premature depletion of funds. This actually limits the intensity of monthly stimulus, and there was even a de facto subsidy "window period" in July.

Secondly, starting from August, the market will face pressure from the high sales base of the same period last year, and the year-on-year growth rate will face greater challenges. In addition, the previously hot overseas energy storage market has also cooled down with the end of the rush to install.

The current structural difficulties from the terminal have forced the new energy industry to seriously consider how to penetrate the "remaining 50%" market. The answer seems to be pointing in one direction: to break through upwards, especially to occupy the high-end pure electric market of over 300000 yuan.

This is a battlefield that is currently being verified. The NIO ES6 has stable monthly sales of over 4000 units at this price point, and the Xiaomi YU7 Max version has monthly sales of over 2000 units, both proving its market potential. The upcoming Tesla six seater Model Y and WENJIE M8 pure electric versions are expected to further activate this track.

But the challenge is that the game rules in the high-end market are completely different. According to user research, in markets below 200000 yuan, "battery characteristics" (such as battery life) are one of the most recognized advantages by consumers; But in the price range of over 300000 yuan, the importance of "safety" jumps to the top, while the ranking of battery characteristics is after 10th place.

This means that simply increasing the range is no longer enough to attract high-end users. How to improve the safety of high-energy density ternary batteries has become an urgent core issue that needs to be addressed.

This also explains why companies such as BMW are firmly promoting the landing of large cylindrical batteries with higher specific energy and higher safety in 2026. Semisolid state batteries are also highly anticipated, and many car and battery companies are also locking in the 2026 release volume.

Behind this strategic shift is a huge business prospect. At present, the average charge capacity of a single new energy passenger vehicle is less than 45 kWh, while taking the Ideal i8 as an example, a high-end model with a charge capacity of over 300000 yuan can reach nearly 100 kWh. Once the high-end market is effectively activated, the shipment volume of battery suppliers will be boosted exponentially.

In a complex landscape, market participants have significant differences in their judgments about the future. It is understood that there is a scissors gap in the production expectations of top battery factories for the second half of the year, indicating that the market in August and the second half of the year will be full of turbulence and uncertainty.

The inertia of upstream production increase and the reality of downstream demand may collide head-on in the second half of the year.