--- title: "China" canonical: "https://anchor.is/the-hysteresis/issue/13/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/13/china" issue: 13 section: "china" description: "CATL, BYD, and the market that sets the floor" authors: ["Elise Huan-Cartwright"] published: 2026-09-07 updated: 2026-09-04 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 13 — China CATL, BYD, and the market that sets the floor ### ESS Measurement Gap - [The ESS market is 462 or 468 GWh, and grew 71% or 95%]() — By [Elise Huan-Cartwright]() · Published 2026-09-04 InfoLink and SNE Research nearly agree on H1 2026 global ESS cell shipments — [467.84 GWh](https://www.infolink-group.com/energy-article/energy-storage-topic-global-battery-shipment-ranking-1h26) versus [461.3 GWh](https://cnevpost.com/2026/08/04/global-ess-battery-market-share-h1-2026/), a gap under 1.5%. They disagree sharply on how fast the market got here: InfoLink reports 94.76% YoY growth, SNE 71%. The 24 percentage-point spread is almost entirely a base-year artifact. InfoLink's H1 2025 baseline works out to roughly 240 GWh (derived from the reported total and growth rate); SNE's stated H1 2025 figure is 269.7 GWh. Neither publishes its prior-year base alongside the current release. ### ESS Arena Map - [EV Consolidation Displaces the Price Fight Into ESS]() — By [Elise Huan-Cartwright]() · Published 2026-09-04 · Format: The Structural Map LFP ESS cells assessed at RMB 0.365/Wh in early September, up RMB 0.002/Wh WoW. The September 1 consumption tax gave the market a natural experiment: cell producers captured less than a third of the 2% levy, and system bids captured nothing. Where a tax lands tells you who can refuse it. H1 2026 filings show ESS revenue growing faster than EV at three of five named producers, with two clear counterexamples, and mid-tier ESS participation is rising as top-ten concentration falls. This piece maps three forces backward from ESS cell price: EV channel concentration, tax incidence, and export channels facing the November export-control and January VAT-rebate clocks. ### Format Transition Toll - [RMB 0.365/Wh Is a Bottleneck Price, Not a Floor]() — By [Elise Huan-Cartwright]() · Published 2026-09-04 · Format: Format Transition Toll Chinese 314 Ah ESS cells have held at approximately RMB 0.365/Wh through the summer, against aggregate nameplate capacity that should be pushing prices lower. The firmness is real and it is being misread. Buyers with certified 314 Ah systems cannot substitute 500 Ah+ cells without redesigning modules, requalifying systems and recertifying configurations, which locks their demand to a supply pool far tighter than the aggregate numbers imply. That barrier has an expiry. As large-format yields mature and qualifications complete, the premium should collapse, whether or not total ESS demand keeps rising. ### ESS Dashboard H1 2026 ESS cell shipments landed between 461 and 468 GWh depending on the tracker, roughly double H1 2025. InfoLink and SNE Research agree within 7 GWh on the absolute number but diverge by 24 percentage points on YoY growth, a gap neither explains publicly. Both confirm non-China shipments crossed 50% of the global total for a full half-year for the first time. Three policy clocks are running against this export surge: the 2% consumption tax (effective September 1), the Announcement 58 export-control suspension expiration (November 10, 67 days), and the VAT export rebate cancellation (January 1, 2027). Meanwhile, 314 Ah LFP ESS cells ticked up 0.7% WoW to RMB 0.365/Wh while DC system prices held at RMB 0.49/Wh. The RMB 0.125/Wh spread between cell and system tells you where pricing power sits in this chain: downstream of the cell. - **Trackers Agree on Level, Diverge on Growth** — [Source]() — Published 2026-09-04 Tag: H1 Shipments InfoLink: 467.84 GWh, +94.8% YoY. SNE Research: 461.3 GWh, +71% YoY. The absolute gap is 7 GWh; the growth-rate gap is 24 percentage points, unexplained by either tracker's public methodology. InfoLink raised its full-year forecast to 1,026 GWh, citing book-to-bill ratios above 1.2. - **Non-China Shipments Held Above Fifty Percent in H1** — [Source]() — Published 2026-09-04 Tag: Export Split InfoLink places non-China ESS shipments at 53.2% of the H1 global total (248.73 GWh); SNE at 56.1% (258.7 GWh). This extends the structural shift first observed in H2 2025, when non-China share reached 51.3% for the first time on record per InfoLink. - **500 Ah Plus Cells Hit Ten Percent Utility** — [Source]() — Published 2026-09-04 Tag: Format Penetration 500 Ah+ cells exceeded 10% penetration in utility-scale storage in H1 2026, up from roughly 5% in Q1. InfoLink raised its full-year forecast to 20%. The segment is fragmented across 587, 588, 648, 684, and 702 Ah formats. The 314 Ah cell remains the volume anchor, still actively tendered at GWh scale. - **Cell Price Ticked Up, System Price Held Flat** — [Source]() — Published 2026-09-04 Tag: Price Spread InfoLink and SMM both assessed 314 Ah LFP ESS cells at RMB 0.365/Wh as of September 2-4, up 0.7% WoW. Two-hour DC liquid-cooled systems held at RMB 0.49/Wh. Cell-to-DC system spread: RMB 0.125/Wh, a 34% markup where PCS, thermal management, and BOS costs absorb margin independently of cell pricing. - **ESS Premium Over Power Battery Widens to 3.33pp** — [Source]() — Published 2026-09-04 Tag: CATL Margins CATL H1 2026 ESS gross margin: 23.96%, down 1.56 pp YoY. Power-battery gross margin: 20.63%, down 1.78 pp YoY. The ESS-over-power spread widened from 3.11 pp to 3.33 pp because ESS declined less. The filing does not cross-tab segment by geography (HKEX interim report, July 26). - **September 1 Tax Hits Cells, Exempts Complete Systems** — [Source]() — Published 2026-09-04 Tag: Consumption Tax The 2% consumption tax took effect September 1 on lithium-ion cells and battery clusters. Complete ESS units integrating electrical, thermal, fire protection, and control systems are excluded. EVE Energy issued a July 24 notice seeking to pass the cost upstream; no named buyer acceptance is publicly documented. Sodium-ion and solid-state cells are exempt through December 2028. - **Announcement 58 Suspension Expires November 10, Sixty-Seven Days** — [Source]() — Published 2026-09-04 Tag: Export Controls The MOFCOM suspension of export controls on cells above 300 Wh/kg and key production equipment expires November 10. No public extension announced. InfoLink attributes sustained book-to-bill ratios partly to export front-loading ahead of this deadline. Licensing application volumes and approval rates are not publicly disclosed. - **Export Rebate Cancels January 1, RMB 0.022/Wh Impact** — [Source]() — Published 2026-09-04 Tag: VAT Rebate The lithium-ion export VAT rebate dropped from 9% to 6% on April 1 and cancels entirely January 1, 2027. At RMB 0.365/Wh, the remaining 6% rebate equals roughly RMB 0.022/Wh, comparable in magnitude to this week's entire cell-price move. For direct manufacturer-exporters, this deadline is more commercially consequential than the consumption tax, which exempts exports. ### ESS Source Access - **Global ESS Cell Shipments Hit 468 GWh in H1 (+95% YoY); InfoLink Raises Full-Year Forecast to 1,026 GWh** — [Source]() — Published 2026-09-04 CR10 concentration hits record low; 500 Ah-plus cells cross 10% of utility-scale volume. - **Non-China ESS Battery Shipments Exceed Domestic for First Time in H1 2026** — [Source]() — Published 2026-09-04 CATL holds 27.1% global share; LGES grows 357% YoY, 86% of volume in North America. - **Copper Foil Tightness Slows September ESS Cell Output Growth to 4%** — [Source]() — Published 2026-09-04 SMM identifies copper foil as the tightest-supplied battery material in 2026; production schedules compress. - **ESS Cell Spot Prices Edge Up to RMB 0.365/Wh; System Prices Hold Flat** — [Source]() — Published 2026-09-04 280/314 Ah cells tick higher on component costs; system integrators absorb the spread for now. - **Battery Consumption Tax Base Remains Unresolved as Regional Authorities Diverge** — [Source]() — Published 2026-09-04 SMM models burden at ~1.4% of system price; taxability of battery clusters still contested across regions. - **China's 2% Lithium-Ion Battery Consumption Tax Takes Effect September 1; Sodium-Ion Exempt Through 2028** — [Source]() — Published 2026-09-04 Phased levy hits LFP cells; sodium-ion and solid-state exemptions run through 2028. ## Other sections in Issue 13 - [Signal]() - [Korea]() - [The Log]() - [Defense]() - [Qualification]() ## More - [Publication guide]() - [Issue archive]()