As China enters the 15th Five-Year Plan period (2026–2030), the lithium industry's demand drivers have expanded from electric vehicles alone to a dual-engine of "EVs plus energy storage," aligning with the government work report's strategic priorities of economic development, innovation-driven growth, and green low-carbon transition.
On the supply side, the traditional reliance on overseas resources is now being complemented by a combination of domestic strategic reserves and urban mining. And lithium's strategic positioning has been elevated from a "new energy metal" to a "critical strategic mineral."
The 15th Five-Year Plan has designated new energy storage as one of six major emerging pillar industries. Therefore, the lithium demand is no longer solely driven by steady EV growth but also non-linear growth from energy storage.
According to the Technology Roadmap for New Energy Storage (2025-2035), the national installed capacity target for new energy storage is set at over 180 GW by 2027, exceeding 240 GW by 2030, and surpassing 300 GW by 2035.
While technologies such as sodium-ion and flow batteries will provide diversified supplementation, lithium-ion batteries still account for over 95% of new energy storage under current technology and cost frameworks, a dominance unlikely to be challenged in the near term.
In China, the implementation of Documents No. 136 and No. 114 has integrated new energy generation into the power market, with capacity pricing and peak-valley arbitrage significantly improving the economics of energy storage projects.
Overseas markets are seeing growth potentials from high oil prices and computing power demand. Based on current storage order books and new capacity data, global energy storage battery shipments are expected to reach 820 GWh by 2026, a year-on-year increase of 57.8%.
Also, the 15th Five-Year Plan identifies intelligent connected EVs as a strategic emerging industry, with the core goal no longer being simple sales volume growth but enhancing the competitiveness of the entire industrial chain.
The 2026 government work report, while avoiding aggressive sales targets, earmarked RMB 250 billion in special treasury bonds for vehicle trade-ins and equipment upgrades, steering the market from first-time purchases to replacement demand.
Replacement demand is less sensitive to price fluctuations than first-time purchases, smoothing lithium price volatility and enhancing demand resilience. Meanwhile, policy focus has shifted to autonomous driving technology and next-generation battery technologies such as solid-state batteries, transforming automobiles from mere transportation tools into "intelligent mobile terminals".
On resource security, policy focus has shifted from "overseas acquisitions" to a dual guarantee of "domestic strategic reserves" and "urban mining." The Work Plan for Stable Growth in the Nonferrous Metals Industry (2025–2026) explicitly calls for accelerating domestic lithium resource development and launching a new round of strategic mineral exploration.
In addition, the policy also explicitly aims to cultivate "urban mining", meaning the recovery of secondary resources such as waste batteries, and to promote the comprehensive utilization of retired power batteries.
It is targeted that by 2026, the recycled metal production will exceed 20 million tonnes. With the arrival of the first wave of large-scale battery retirements, lithium salts extracted from battery recycling will occupy an increasingly significant share of supply. This will require upstream players to extend into downstream recycling, building an integrated closed-loop system.
In summary, lithium's strategic positioning has been elevated from a "new energy metal" to a "critical strategic mineral." Policy orientation has shifted from scale-pursuit to supporting next-generation technologies such as solid-state batteries, accelerating the exit of low-end capacity lacking technological moats.
The logic of corporate profitability is shifting from "betting on price" to "competing on technology, controlling costs, and securing recycling." Only companies that achieve full industrial chain integration and resource utilization will gain a robust and long-term competitive edge in the high-quality development cycle of the 15th Five-Year Plan.
Written by Aggie Hu, huchenying@mysteel.com
Join Mysteel's April 30 webinar to explore whether supply disruptions will drive the next leg higher for lithium and nickel markets in Q2 2026.
https://www.mysteel.net/event-listings/100067-q2-2026-lithium-and-nickel-will-supply-disruptions-fuel-further-price-hikes
