With the explosive growth of the new energy vehicle and energy storage markets, the upstream electrolyte and core raw material industries in the lithium battery supply chain are experiencing a tight supply-demand balance. Prices of key materials such as lithium hexafluorophosphate (LiPF₆) and vinylene carbonate (VC) have continued to surge since the second half of 2025. Leading companies are operating at full capacity, while industry expansion has become more rational, with some projects delayed, further increasing industry concentration.

Electrolyte Market: High Costs Drive Price Increase Expectations; Planned Capacity Exceeds 10 Million Tons

As the "blood" of lithium-ion batteries, electrolytes play a critical role in lithium-ion transport, directly determining battery energy density, cycle life, and safety. With sustained downstream demand expansion, China's total lithium battery electrolyte capacity exceeded 4 million tons in 2025. Tinci Materials leads the industry with an annual capacity of 860,000 tons, followed closely by Capchem, Funai New Energy, Zhuhai Smoothway, and others, forming the core of industry capacity.

In terms of capacity expansion, the industry exhibits a pattern of "enthusiastic planning, cautious implementation." According to ACMI statistics, as of October 2025, there were over 60 proposed and under-construction electrolyte projects in China, with a combined planned capacity exceeding 11 million tons per year—2.75 times the current capacity. However, price pressures have emerged first. Influenced by the persistently high prices of core raw materials LiPF₆ and VC, electrolyte production costs remain elevated, and the market widely expects further price increases.

Leading company Tinci Materials sold over 720,000 tons of electrolyte in 2025, exceeding its annual target, with its core products essentially operating at full capacity.

Lithium Hexafluorophosphate (LiPF₆): Price Soars 140%; Industry Reaches Consensus on Rational Expansion

As the core lithium salt for electrolytes, the supply-demand tension in the LiPF₆ market is particularly pronounced. China's total LiPF₆ capacity exceeded 450,000 tons in 2025, primarily concentrated in East China, accounting for over 70%. The market concentration (CR5) of five leading companies—Tinci Materials, Do-Fluoride, Shida Shenghua, among others—approaches 80%.

On the demand side, benefiting from a 46% penetration rate of new energy vehicles and a doubling of energy storage shipments, market demand reached 256,000 tons in 2025. With an industry effective capacity of 390,000 tons and inventory of only 1,500 tons, the tight supply-demand balance is significant.

Price-wise, LiPF₆ experienced a "rollercoaster" trend, skyrocketing from a low of 49,000 RMB/ton in July 2025 to 150,000 RMB/ton in December, an increase of over 140%, recently approaching 170,000 RMB/ton.

Notably, after experiencing the previous industry downturn, leading companies have adopted a more cautious approach to expansion. The industry has formed a consensus on "orderly expansion to ensure reasonable profits." Although ACMI statistics show 66 proposed and under-construction projects with planned capacity exceeding 1 million tons, multiple projects by companies like Tianji Co., Ltd. and Sanmei Co., Ltd. have announced delays, pushing their start-up to the end of 2026 and mid-2027, respectively.

New Lithium Salts and Additives: LiFSI Commercialization Accelerates; VC/FEC Supply Remains Tight

Driven by technological upgrades, the commercialization of the new lithium salt lithium bis(fluorosulfonyl)imide (LiFSI) continues to accelerate. Benefiting from increased demand for solid/semi-solid batteries and the trend towards higher nickel content in ternary batteries, the LiFSI addition ratio has risen to 3%-5%, with domestic capacity accounting for over 60% globally. As of October 2025, there were 50 domestic LiFSI projects under construction or planned, with a combined planned capacity exceeding 6 million tons/year. However, based on a comprehensive feasibility analysis of project implementation, actual capacity is expected to reach around 280,000 tons/year by 2030.

Market-wise, LiFSI supply and demand are also in a tight balance. Its price rebounded to 102,000 RMB/ton in October 2025, a monthly increase of 12.7%.

The core electrolyte additive market is also highly active. Vinylene carbonate (VC), a crucial film-forming additive, faces persistently tight supply due to environmental policies and capacity ramp-up cycles, with its price increasing by 250% in 2025. Currently, 24 domestic companies possess a combined VC capacity of over 70,000 tons, with another 28 companies planning approximately 500,000 tons of capacity. Leading companies like Huasheng Lithium and Fuxiang Pharmaceutical are actively pursuing expansion.

Fluoroethylene carbonate (FEC), a core additive for high-rate batteries, currently has a capacity of about 50,000 tons, with planned capacity reaching 200,000 tons. Its application advantages in silicon-carbon anode fields are driving continuous demand growth.

Furthermore, other functional additives like lithium difluorophosphate (LiDFP) and lithium difluoro(oxalato)borate (LiODFB) are also developing steadily. Domestic companies have gradually broken through some technical barriers, achieving small-scale mass production, but capacity scale remains relatively limited, with most combined operational capacities at the thousand-ton level.

Industry Outlook: Demand Dividends Continue; Technology and Capacity Drive Upgrades

Industry experts indicate that the long-term growth logic of the new energy vehicle and energy storage markets remains unchanged and will continue to drive demand for electrolytes and core materials. In the short term, the tight supply-demand balance for core materials is expected to persist until the first half of 2026. In the long term, industry competition will focus on technological upgrades and cost control, with leading companies possessing integrated supply chain layouts continuing to benefit.

Simultaneously, as the industrialization of solid-state batteries accelerates, the R&D and mass production capabilities for new lithium salts and additives will become key for companies to capture future market share.