In the first half of January 2026, China's domestic electric vehicle sales saw a significant year-on-year decline partly impacted by the phase-out of the vehicle purchase tax exemption policy. Moving forward, it will be necessary to closely monitor the pace of recovery in the EV market.
Recently, influenced by reduction in export tax rebate policies for batteries, ternary battery exports have shown a rush, leading to an increase in orders. In contrast, lithium iron phosphate (LFP) battery orders have remained at high levels but have not yet seen a significant boost from export rush activities. Further attention should be paid to the actual fulfillment of front-loaded demand in the first quarter.
Looking back on the past week ending January 16, driven by market sentiment around adjustments to battery export tax rebate policies, lithium carbonate prices surged sharply. However, in the latter half, lithium prices experienced a significant correction due to a cooling sentiment, although the fundamentals remained largely unchanged.
When lithium carbonate prices fell, downstream buyers seized the opportunity to make purchases at lower levels, resulting in increased transaction volumes. In the short term, lithium carbonate prices are expected to remain highly volatile within a wide range until new market drivers emerge.
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