Leaders, lithium, and leverage: How Chinese dominance and U.S. tariffs are shaping the 2025 battery market
Global Battery Industry Surpasses 300 GWh — Five Years of Transformation in One Decade
In just five years, the global battery industry has undergone a transformation that in other sectors would take decades. According to the latest Intertek CEA report, global deliveries of battery energy storage systems (BESS) exceeded 300 GWh in 2024, representing an 83% compound annual growth rate (CAGR) since 2020.
Market Concentration in the Hands of Giants
Despite such dynamic growth, the market remains highly concentrated. More than 70% of global market share is controlled by just five manufacturers, with China’s CATL alone accounting for 37% of total sales in 2024 — an unprecedented level of dominance in the history of modern technology industries.
This market structure creates both opportunities and risks:
- Economies of scale – major players can optimize production, reduce costs, and accelerate technological deployment.
- Dependency risks – concentration within a few firms makes the global supply chain vulnerable to geopolitical disruptions.
- Innovation pressure – competition among giants accelerates the development of new chemistries (LFP, NMC, Na-ion).
- Pricing power – large producers effectively set global battery prices.
China’s dominance has brought unprecedented cost reductions to the industry. Since 2015, the average cell price has fallen by over 80%. However, this cost advantage is also fueling trade tensions and reindustrialization efforts in the U.S. and Europe.
State Policy as a Tool of Global Influence
One of the defining factors shaping the 2025 market is China’s introduction of an “anti-involution” policy, which prohibits aggressive price competition and below-cost sales. In practice, this marks the end of lithium dumping, which for years had driven oversupply and squeezed manufacturer margins.
The immediate effects included rising lithium prices and stabilization of raw material markets. Beijing aims to curb oversupply and strengthen national champions such as CATL, BYD, and EVE Energy.
This decision, however, has global consequences. The pricing policies of Chinese corporations now influence battery project costs in California, Europe, and Australia alike.
Lithium Prices Find a New Balance
Although lithium prices in 2025 remained 80% lower than in 2022, Intertek CEA analysts warn that the era of ultra-cheap raw materials is over. Three key factors are driving this shift:
- Export policies – Zimbabwe and the Democratic Republic of Congo have introduced export restrictions on lithium and cobalt concentrates.
- Supply consolidation – major corporations now control an increasing share of mining and processing.
- Rising demand – global battery demand continues to grow as new sectors (marine, aviation, mining) enter the electrification phase.
The result is a new equilibrium: lithium is more expensive, but its value is more predictable.
U.S. Reindustrialization and the FEOC Effect
In the West, the main driver of change is U.S. industrial protectionism. In 2026, the U.S. will introduce tariffs of up to 83% on Chinese batteries. Additionally, new Foreign Entities of Concern (FEOC) rules exclude China-linked firms from subsidy programs.
For U.S. manufacturers, this presents a major opportunity to rebuild domestic production. For the rest of the world, however, it may introduce market instability. If demand for FEOC-compliant batteries exceeds local production capacity, prices could rise again.
According to the report, the global battery market is bifurcating — splitting into two parallel systems:
- Asian system – dominated by China, focused on low-cost production and prismatic cells.
- Transatlantic system – encompassing the U.S., Korea, and Japan, aligned with FEOC standards and pouch-cell formats.
Technological Divergence: Pouch vs. Prismatic Cells
The differences between these two production models are becoming systemic. According to Intertek CEA, pouch cells are on average 10% more expensive than prismatic cells, but they offer higher energy density. The main challenge remains scale — smaller production volumes prevent full cost optimization.
As Aaron Marks from Intertek CEA notes:
“In the coming years, the key price differentiator will no longer be technology itself, but the origin of the manufacturer and its FEOC status.”
The global battery market is thus moving away from being a single, unified system toward a mosaic of national and political interests.