--- title: "China" canonical: "https://anchor.is/the-hysteresis/issue/11/china" publication: "The Hysteresis" publisher: "The Hysteresis" language: "en-US" guide: "https://anchor.is/the-hysteresis/llms.txt" permalink: "https://anchor.is/the-hysteresis/issue/11/china" issue: 11 section: "china" description: "CATL, BYD, and the market that sets the floor" authors: ["Elise Huan-Cartwright"] published: 2026-08-24 updated: 2026-08-22 articles: 17 --- # The Hysteresis > The Hysteresis exists to give a small cross-functional team — strategy, investment, and procurement — a shared weekly instrument for reading the battery supply chain earlier than consensus. Success means the team consistently identifies inflection points in cell pricing, supplier health, and policy enforcement weeks or months before they surface in earnings calls, annual surveys, or trade press. The commercial mechanism is internal-first: the publication proves itself as a decision tool inside the organization, then extends to paid subscribers and a practitioner community as upside. Revenue follows utility — if the team makes better-timed procurement calls and competitive assessments because of what they read here, the publication earned its place. [Read on the website]() ## Issue 11 — China CATL, BYD, and the market that sets the floor ### System Pressure - [122.3 GWh of Unabsorbed Chinese Battery Production in Seven Months]() — By [Elise Huan-Cartwright]() · Published 2026-08-21 CABIA's January–July 2026 combined power-and-ESS battery data: production 1,286.9 GWh, sales 1,164.6 GWh. The gap is 122.3 GWh, 10.5% of reported sales. Full-year 2025's production-sales difference was 55.1 GWh, 3.2% of sales. Seven months into 2026, the residual has more than doubled the prior year's total. ### Carry Structure Map - [Chinese Cell Prices Move in Pools]() — By [Elise Huan-Cartwright]() · Published 2026-08-21 · Format: The Structural Map InfoLink's China ESS cell series has printed RMB 0.360/Wh since February. InfoLink's own analysis says 314 Ah prices rose more than 15% over the same period. Both can be true, because they measure different pools — separated by qualification gates, format requirements, and deployment-history thresholds that keep 122.3 GWh of surplus production from flowing where it would compress prices. Two axes organize the system: who can carry surplus and for how long, and which price pools that surplus can reach. The spot floor everyone watches is real, and it carries the least information relevant to a qualified procurement decision. ### Leader Carry Case - [CATL Doubled Its Finished Goods in Six Months. Dispatched Goods Barely Moved.]() — By [Elise Huan-Cartwright]() · Published 2026-08-21 · Format: Leader Carry Case CATL's net finished goods rose 111% to RMB 47.6B in H1 2026. Goods dispatched grew 4.7%. Contract liabilities fell 26%. Utilization held at 94.86%. A producer sitting on RMB 372B in monetary funds can carry that surplus indefinitely without discounting, and the near-flat inventory provision means its auditors agree the product moves at cost or better. What that combination points to for buyers is leverage on terms, commitments, and delivery structure rather than on headline price. ### Signal Dashboard Two independent price reads hold Chinese cells flat through mid-August, but the carry capacity behind that stability is narrowing. Lithium carbonate rose 6.4% with no pass-through to cells. The cumulative production-sales gap through July has already doubled the full 2025 figure. CATL's finished goods doubled in H1 while contract liabilities fell 25.9%. Three calendar events structure the next 90 days. GB 38031 sampling is underway with no published outcomes. The September 1 consumption tax breaks invoice-price continuity across every tracked series. Two export-control suspensions expire in November without announced extensions. - **Paired SMM InfoLink Reads Show No Renewed Deflation** — [Source]() — Published 2026-08-21 Tag: Cell Prices SMM August 21 LFP EV cells: $52.6–52.9/kWh (+$0.3 WoW). ESS 314 Ah: $47.4/kWh (+$0.2 WoW). InfoLink 280/314 Ah ESS flat at RMB 0.360/Wh through August 5–19. Different methodologies, transaction bases, and assessment dates. Neither confirms sustained tightening or renewed deflation. - **Lithium Carbonate Up 6.4 Percent Cells Still Flat** — [Source]() — Published 2026-08-21 Tag: Cost Transmission InfoLink battery-grade lithium carbonate: RMB 140,000 to RMB 149,000/MT over August 5–19 (+6.4%). ESS cells held at RMB 0.360/Wh throughout. Direct cost impulse estimated at roughly RMB 0.0046/Wh under standard LFP sensitivity. Iron phosphate rising simultaneously to approximately RMB 14,500–15,000/MT. Neither input has passed through. - **Unabsorbed Production Already Doubles the Full 2025 Gap** — [Source]() — Published 2026-08-21 Tag: Production Gap New metric. CABIA Jan–Jul 2026: output 1,286.9 GWh vs. sales 1,164.6 GWh, a 122.3 GWh gap (10.5% of sales), already exceeding full-year 2025's 55.1 GWh. July: 32.8 GWh gap at 17.7% of monthly sales. Output grew MoM while exports and installations fell. Label as unabsorbed reported production, not verified inventory. - **CATL at 94.9 Percent Utilization Finished Goods Doubled** — [Source]() — Published 2026-08-21 Tag: CATL Financials H1 2026: utilization 94.86% (+5.00 pp YoY), capacity 525 GWh, 764 GWh under construction. Finished goods doubled to RMB 47.6B while dispatched goods grew 5.3%. Contract liabilities fell 25.9% to RMB 36.5B. Liquidity RMB 440.2B. Power-battery margin 20.63% (-1.78 pp YoY). Production is running ahead of sell-through. - **CATL Plus BYD Hold 61.6 Percent in July** — [Source]() — Published 2026-08-21 Tag: Market Share July domestic EV installations: CATL 42.33% (+1.14 pp MoM), BYD 19.23% (+0.74 pp MoM). Combined 61.56%. Top-5 at 80.85%. Domestic EV concentration edged higher while InfoLink's global ESS CR10 fell from 91.2% to 82.3% in H1 2026. Different applications and geographies, not contradictory. - **GB 38031 Sampling Confirmed No Outcomes Published Yet** — [Source]() — Published 2026-08-21 Tag: Safety Standard GB 38031-2025 effective July 1, 2026. MIIT inspected GAC Aion and Zhaoqing XPeng on July 24, sampling vehicles and traction batteries for conformity testing. No test results, battery-supplier identities, failures, or penalties published. Enforcement has advanced from rule text to physical sampling but not to disclosed outcomes. - **Three Export Control Clocks Two Approaching November Expiry** — [Source]() — Published 2026-08-21 Tag: Export Controls Announcement 58 (cells above 300 Wh/kg, equipment, technology): suspended through November 10, 2026. Enhanced US-specific review (Announcement 72): suspended through November 27, 2026. Permanent graphite licensing (Announcement 39): active now. No public data on license grants or denials under any regime. No extension announced for either suspension. - **September 1 Battery Consumption Tax Creates Price Break** — [Source]() — Published 2026-08-21 Tag: Consumption Tax 2% consumption tax on lithium-ion batteries effective September 1, rising to 4% in September 2027. Sodium-ion and solid-state exempt through 2028. Cell-to-pack deduction permitted with qualifying documents; purchased finished packs denied deduction. Post-September 1 invoice prices and pre-tax producer netbacks diverge. Watch August volumes for pre-tax positioning. ### Source List - **CRU: China's Overcapacity — Will Its Battery Industry Consolidate?** — [Source]() — Published 2026-08-21 Best English-language structural analysis of provincial incentives sustaining 2 TWh+ capacity against ~60% utilization. Free access. - **InfoLink: H1 2026 ESS Cell Shipments and Concentration Data** — [Source]() — Published 2026-08-21 468 GWh shipped, CR10 still declining, 314 Ah tightening, 500 Ah format crossing 10% penetration. Via PV Magazine. - **InfoLink Weekly Spot Pricing: LFP Cell, ESS System, Lithium Carbonate (Aug 19)** — [Source]() — Published 2026-08-21 Lithium carbonate up 5.3% WoW; LFP cell and containerized system prices flat. The weekly pricing anchor. - **CnEVPost: China Power Battery Installations, July 2026 (CABIA Data)** — [Source]() — Published 2026-08-21 Full CABIA relay: 33.5% YoY installation growth, LFP at record 84.6% share. Monthly tables back to 2020. - **CnEVPost: July 2026 Supplier Market Share (CABIA Data)** — [Source]() — Published 2026-08-21 CATL 42.3%, BYD 19.2%, top 5 at 80.9%. Supplier-level installation data with MoM share shifts across top 15. - **CATL H1 2026 Filing (Sina Finance, Chinese-Language Primary)** — [Source]() — Published 2026-08-21 Shenzhen-exchange filing: 94.9% utilization, RMB 277B revenue, segment-level margin detail. Key figures cited in our coverage. ## Other sections in Issue 11 - [Signal]() - [Korea]() - [The Log]() - [Defense]() - [Qualification]() ## More - [Publication guide]() - [Issue archive]()