Non-China ESS demand overtakes China for the first time

Treasury's 45% cap was just the first rung, here's the whole ladder. Our June issue flagged that a US storage project starting construction in 2026 keeps its Section 48E investment tax credit only if no more than 45% of its direct-cost content traces to prohibited foreign entities (which captures the major Chinese cell makers). IRS Notice 2026-15 now sets out the full "material assistance cost ratio" escalation: the minimum non-prohibited direct-cost share rises 5 points a year, from 55% in 2026 to 75% for projects breaking ground in 2030 or later, so the Chinese-content ceiling tightens from 45% this year to 25% by 2030.

KPMG TaxNewsFlash

LFP now owns four-fifths of China's installs, and the base keeps growing. CABIA's first-half 2026 data, released 16 July, puts cumulative domestic power-battery installations at 335.6 GWh, up 12.0% year on year — and LFP took 272.0 GWh of that, an 81.0% share, against just 63.4 GWh (18.9%) of ternary. (We covered the H1 export split in our last-month issue; the fresh detail here is the domestic mix.)

CABIA via SECCW

EVE Energy is adding 230 GWh of capacity in one wave. EVE disclosed roughly CNY 23 billion (~$3.2 billion) of new power and storage capacity across four China sites — Jingmen, Huizhou, Qidong and Shanghang — totaling about 230 GWh, alongside its 628 Ah large-format cell (which passed large-scale fire testing in early April 2026) and a 6.9 MWh system rated for 10,000 cycles at 70% state of health.

ESS News

Non-China buyers took most of the world's storage batteries for the first time. Global lithium-ion ESS shipments hit 461.3 GWh in H1 2026, up 71% year on year, and non-China regions took 258.7 GWh of that (56.1%) — overtaking China's 202.5 GWh (43.9%) for the first time. The suppliers behind it are still overwhelmingly Chinese, led by CATL at 27.1%, EVE Energy at 10.4% and Hithium at 10.0%.

CnEVPost, citing SNE Research

Lithium carbonate has climbed back toward 150,000 yuan. SMM's battery-grade lithium carbonate closed around 140,000 yuan/ton on 7 August (intraday high 144,800), and China's benchmark was quoted near 148,000 yuan/ton on 12 August, when the LC2609 futures contract settled up 2.97% at 149,700. That is roughly 50–55% above the late-2025 trough near 90,000 yuan/ton, and cell quotes typically follow with a lag.

Shanghai Metals Market

The retirement wave is now a $4.9 billion recycling market. The EV battery recycling market is projected to grow from $3.82 billion in 2025 to $4.88 billion in 2026 — a 27.7% jump — as packs fall below the 70–80% capacity band that makes them unfit for long-range driving but still usable for stationary storage.

AZoCleantech

There's now an international standard for grading a used battery. IEC 63330-1:2024 ("Repurposing of secondary batteries — Part 1: General requirements") sets the general safety and performance procedure for evaluating used Li-ion cells, modules, packs and systems before repurposing; its companion IEC TR 63330-2, covering classification and performance-estimation methods, reached close of voting (stage 50.60), with proof returned by the secretariat on 24 April 2026.

IEC project registry

Verify the batch when it arrives. The traceability code printed on a Chinese-made cell can only be read once the goods are in your hands. When a delivery lands, paste a code into the decoder: it returns the manufacturer, chemistry, spec and exact production date in seconds, enough to catch relabeled or calendar-aged stock before you sign off the batch.