--- title: "China" canonical: "https://anchor.is/the-hysteresis/issue/9/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/9/china" issue: 9 section: "china" description: "CATL, BYD, and the market that sets the floor" authors: ["Elise Huan-Cartwright"] published: 2026-08-10 updated: 2026-08-09 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 9 — China CATL, BYD, and the market that sets the floor ### Price Floor Check - [314 Ah Rate of Decline Hit Zero but the Two Public Instruments Still Disagree by $6/kWh]() — By [Elise Huan-Cartwright]() · Published 2026-08-08 InfoLink's 314 Ah LFP ESS cell assessment held at RMB 0.360/Wh on [August 5](https://www.infolink-group.com/energy-article/ess-spot-price-20260805), flat after falling 2.7% the prior week. SMM's Chinese-language 314 Ah page ([August 7](https://energy-storage.smm.cn/)) showed RMB 0.366/Wh, also flat. It did not corroborate InfoLink's July 29 drop. Selective Q4 concessions of ~RMB 0.010/Wh persisted (InfoLink, July 29), but these are relationship-specific and below published averages. ### System State Map - [Same Overcapacity, Fewer Eligible Sellers]() — By [Elise Huan-Cartwright]() · Published 2026-08-08 · Format: The Structural Map LFP ESS cells at RMB 0.360/Wh, flat, while lithium carbonate fell another 2.8% to RMB 140,000/MT. Producers are absorbing the input cost decline rather than competing it away. H1 profit alerts from Gotion, Great Power, and Farasis resolve the Tier-2 field into four distinguishable margin positions. ### Format Migration Case - [Chinese Utility Tenders Are Splitting ESS Cell Supply by Format Faster Than Producers Can Follow]() — By [Elise Huan-Cartwright]() · Published 2026-08-08 · Format: Format Migration Case Chinese state-owned utility tenders in early-to-mid 2026 are splitting ESS cell procurement into format-separated lots, 314 Ah and 500 Ah+, with relaxed qualification standards for the larger format. Across NARI, Huaneng, and CEEC procurements totalling over 15 GWh, buyers are specifying 500 Ah+ cells faster than most producers can deliver them at stable yield, and CATL has publicly flagged manufacturing risk at larger formats. Meanwhile 314 Ah supply may be thinning as producers convert lines ahead of the demand. Tender evidence, disclosed conversion economics, and producer filings trace the gap between where buyer specifications are heading and where the supply base actually stands. ### China Market Dashboard CABIA H1 2026: combined production 1,068.9 GWh (+53.3% YoY), combined sales 979.4 GWh (+48.6% YoY), exports 181.3 GWh. ESS sales grew faster than power batteries at +83.4% YoY. CATL's battery-system utilization reached 94.86% while domestic gross margin compressed to 21.16%, widening the overseas spread to 8.81 pp. LFP ESS cell prices were flat this week at RMB 0.360/Wh (InfoLink, Aug 5) after declining the prior week. The 500 Ah+ format transition is now visible in SOE tender structures at approximately 5% Q1 penetration. Three policy clocks: September 1 consumption tax (2%), January 1 VAT rebate elimination, November 10 export control suspension expiry. - **Combined H1 Production Crosses 1,000 GWh Mark** — [Source]() — Published 2026-08-08 Tag: H1 Volume CABIA (Jul 16): H1 2026 combined power + ESS production 1,068.9 GWh (+53.3% YoY). Combined sales 979.4 GWh (+48.6% YoY). Exports 181.3 GWh (+42.5% YoY), or 18.5% of combined sales. January–June 2026. - **ESS Battery Sales Reach 318 GWh in H1** — [Source]() — Published 2026-08-08 Tag: ESS Sales CABIA: H1 ESS battery sales 318.1 GWh (+83.4% YoY). June standalone 62.6 GWh (+67.5% YoY, +13.4% MoM). SMM separately (Aug 7): H1 ESS cell production 437.8 GWh; industry inventory approximately 28 GWh, or 0.36 months coverage. - **CATL H1 Revenue RMB 276.9B, Utilization 94.86%** — [Source]() — Published 2026-08-08 Tag: CATL Financials CATL H1 2026 interim (Jul 26, HKEX filing): revenue RMB 276.9B (+54.8% YoY). Net profit RMB 43.3B (+42.0% YoY). Battery-system utilization 94.86%, up 5.00 pp from H1 2025. Cash and trading financial assets RMB 440.2B. Capacity under construction: 764 GWh. - **Domestic Gross Margin 21.16%, Overseas Spread Widens** — [Source]() — Published 2026-08-08 Tag: CATL Margins CATL H1 2026 (HKEX filing): domestic gross margin 21.16% (down approximately 4.02 pp vs. H1 2024). Overseas gross margin 29.97%. Domestic-overseas spread 8.81 pp, up from 6.08 pp in H1 2025. Power-battery segment margin 20.63%; energy-storage segment 23.96%. - **LFP ESS Cell Prices Flat After Prior Decline** — [Source]() — Published 2026-08-08 Tag: Cell Prices InfoLink (Aug 5): 280 Ah and 314 Ah LFP ESS cells RMB 0.360/Wh, 0% WoW following -2.7% the prior week. SMM Chinese-language page (Aug 7): 314 Ah at RMB 0.366/Wh. Lithium carbonate: RMB 140,000–142,750/MT range across sources and dates. - **500 Ah Cells at 5% Q1 Penetration, Rising** — [Source]() — Published 2026-08-08 Tag: Format Transition InfoLink: 500 Ah+ ESS cell penetration approximately 5% in Q1 2026, estimated at approximately 20% full-year. SOE tenders splitting formats: NARI split 4 GWh evenly between 314 Ah and 587 Ah; Huaneng specified lots above 450 Ah. Head-tier producers in stable mass production per People's Daily Energy (Jun 22). - **Consumption Tax 2% September 1, VAT Rebate Zeroed** — [Source]() — Published 2026-08-08 Tag: Tax Policy Lithium-ion battery consumption tax: 2% effective September 1, 2026, stepping to 4% on September 1, 2027. Sodium-ion and solid-state batteries exempt through December 31, 2028. VAT export rebate drops to 0% on January 1, 2027. Source: State Taxation Administration (chinatax.gov.cn). - **Broad Export Control Suspension Expires November 10, 2026** — [Source]() — Published 2026-08-08 Tag: Export Controls MOFCOM's November 2025 suspension covering cells at or above 300 Wh/kg, cathode/anode materials, and manufacturing equipment (winding, lamination, liquid injection machines) expires November 10, 2026. Whether controls resume, extend, or are modified is unestablished in public sources as of this week. Graphite controls remain active separately. ### Source Access - **SOE Buyers Split Tenders by Cell Format, Setting the 500 Ah+ Qualification Clock** — [Source]() — Published 2026-08-08 China Energy News details NARI, Huaneng, and CEEC separating 314 Ah and 500 Ah+ procurement tranches in 2026 tenders. - **Huadian 12 GWh ESS Tender: 59 Bidders, 7 Shortlisted, Average Prices Up 11% YoY** — [Source]() — Published 2026-08-08 Lowest bidder excluded from final shortlist. Public record of the widening gap between price and qualification. - **CEEC 7 GWh Cell Tender: 500 Ah+ Premium Visible, Qualified Supplier Field Narrows** — [Source]() — Published 2026-08-08 Three bidders qualified for the 500 Ah+ package versus five for 314 Ah. Floor bids diverge by format. - **H1 2026 CABIA Data: Production +53%, ESS Sales +83%, Trajectories Splitting** — [Source]() — Published 2026-08-08 Domestic installation growth accelerated through June; ESS and export YoY growth rates decelerated. Second derivatives diverge. - **June 2026 Market Share: CATL at 42.7%, Down from January's 49.8% Peak** — [Source]() — Published 2026-08-08 CABIA supplier data shows BYD recovering from February trough while CATL share erodes. Top 5 hold 80%. - **CALB Gives Quality Team Veto Power After 'Banana Battery' Incident** — [Source]() — Published 2026-08-08 Coating controls aligned to CATL specs. No tender exclusion or regulatory mandate reported as of filing. ## Other sections in Issue 9 - [Signal]() - [Korea]() - [The Log]() - [Defense]() - [Qualification]() ## More - [Publication guide]() - [Issue archive]()