How pronounced is the change in production schedules?

  • According to ZE Consulting data, actual battery production schedules in October 2026 were about 3% below the level indicated by the mid-October channel survey. Citi's survey for November indicates that the top five battery manufacturers' combined planned output is expected to be 187.5 GWh, down about 2% from 191.2 GWh in October.
  • Planned output remains above the year-ago level, but growth is slowing: year-on-year growth in the top five manufacturers' combined planned output is expected to fall from 41% in October to 27% in November.

Which products and manufacturers pulled down production schedules for November?

  • The decline is concentrated in lithium iron phosphate batteries. The top five manufacturers' planned output of these batteries is expected to fall from 169.5 GWh in October to 165.8 GWh in November; planned output of ternary batteries remains at 21.7 GWh.
  • By manufacturer, total planned output for companies A and B in the table fell by 2% and 4%, respectively, month on month in November, while the other three were flat. The overall decline came mainly from adjustments by the first two, rather than simultaneous cuts by all five.

Why does Citi expect pressure on prices and margins?

  • Citi expects the weakness in battery production schedules to continue for several months. The report notes that the export tax rebate rate will fall from 6% to 0% in 2027, and the window to bring forward exports before year-end is gradually narrowing, while the Lunar New Year off-season is approaching.
  • New battery capacity is being brought online as demand momentum weakens. Citi therefore expects both battery average selling prices and margins to face pressure in the short term.
  • Some manufacturers are still pursuing market share: CALB has increased its share at Li Auto and Xiaomi, which can partially offset the weak electric vehicle battery demand it faces. Citi also notes that CALB's average gross margin is below its peers', and visibility into margin expansion will affect its valuation.