In recent years, the most common and straightforward framework for assessing demand across the lithium battery value chain has been to anchor it to EV sales. The logic was simple: the more vehicles sold, the stronger the battery demand; conversely, a slowdown in vehicle sales would imply weaker battery demand. This relationship held true in the early stages of the industry, when EV penetration was rapidly increasing, product structures were relatively simple, and battery demand exhibited a strong linear correlation with vehicle sales. However, this linear relationship is now clearly weakening. Increasing evidence suggests that battery demand is no longer solely determined by vehicle sales , but is increasingly driven by multiple factors, including average battery capacity per vehicle, product mix, commercial vehicle electrification, and export dynamics. 1. The “Vehicle Sales = Battery Demand” Formula Is Breaking Down At its core, vehicle sales represent the number of units sold, while battery demand reflects total energy consumption, i.e., total installed battery capacity. These two metrics only move in tandem when the average battery capacity per vehicle remains stable. Once average battery size increases, or when the sales mix shifts across BEV vs. PHEV, passenger vs. commercial vehicles, the direct linkage between vehicle sales and battery demand begins to decouple. As a result, assessing battery demand today requires answering several additional questions beyond headline vehicle sales: What is the average battery capacity per vehicle? Which vehicle segments are driving incremental growth? Are export flows and regional differences amplifying demand volatility? In other words, the industry is transitioning from a “unit-driven” model to an “energy-driven” model . 2. Rising Battery Capacity per Vehicle: The Primary Driver The most direct reason for the decoupling is the continuous increase in battery capacity per vehicle. This trend is driven by three key factors. First, vehicle upsizing. Both in China and overseas, EV consumption is shifting from basic electrification to enhanced user experience. The rising share of SUVs, pickup trucks, larger sedans, and premium vehicles naturally drives higher battery capacity per vehicle. Larger vehicle size, longer range requirements, and higher performance expectations all translate into higher kWh configurations. Second, the range competition is not over. While the industry has moved beyond the most aggressive phase of “range-at-all-costs,” consumers still place strong emphasis on real-world range, low-temperature performance, highway efficiency, and charging convenience. Even amid intense price competition, automakers are reluctant to reduce battery capacity, as it remains a core determinant of product competitiveness. Third, the growth of premium BEVs and heavy-duty applications. Although EV sales growth is expected to moderate going forward, battery demand is still projected to grow at a faster pace, with increasing battery capacity per vehicle being a key contributor. This reflects a critical shift: vehicles may not be selling faster, but each vehicle is consuming more battery capacity. Therefore, relying solely on slowing vehicle sales growth to infer weaker battery demand may significantly underestimate the offsetting effect from rising battery capacity per vehicle. 3. Product Mix Matters More Than Total Sales Volume Beyond battery capacity, changes in product mix are also reshaping battery demand. For instance, selling one million EVs with a higher BEV share will result in stronger battery demand than the same volume with a higher PHEV share, due to differences in battery size. In other words, shifts between different powertrain technologies directly impact overall battery intensity. Globally, this structural divergence is becoming more pronounced. In Europe, policy adjustments have led to a temporary rebound in PHEVs, which dilutes average battery capacity per vehicle. In contrast, China continues to maintain a high share of BEVs and higher-capacity vehicles, supporting stronger battery demand intensity. Thus, evaluating battery demand today requires understanding not just how many vehicles are sold, but what types of vehicles are driving the growth . 4. Commercial Vehicle Electrification: The Most Undervalued Growth Driver If rising battery capacity per vehicle represents the first layer of demand restructuring, then the electrification of commercial vehicles represents the second—and arguably the most underestimated—layer. Passenger EVs typically carry battery packs in the range of tens of kWh, whereas electric heavy-duty trucks, construction vehicles, and specialty vehicles often require 300–600 kWh or more. This means that a single electric truck can generate battery demand equivalent to multiple passenger EVs . Even with a smaller sales base, incremental penetration in commercial vehicles can significantly amplify overall battery demand. Rising oil prices further accelerate this trend by improving the total cost of ownership (TCO) of electric commercial vehicles, particularly in high-utilization, heavy-load, and fixed-route applications. In such scenarios, electrification becomes economically compelling much faster. As a result, while commercial vehicles are not the largest segment by volume, they are likely to become one of the most powerful “energy leverage” drivers of battery demand in the near term. 5. Exports, Inventory Cycles, and Production Scheduling Are Increasing the Mismatch In addition to end-market dynamics, midstream factors such as exports, inventory cycles, and production scheduling are further widening the gap between vehicle sales and battery demand. On one hand, changes in export policies, overseas customer stocking behavior, and shifts in trade flows can either front-load or delay battery and materials production. On the other hand, inventory cycles are once again becoming a central analytical framework. Automakers and distributors are no longer maintaining stable inventory levels; instead, they dynamically adjust stocking based on sales trends and pricing competition. This means that battery production is increasingly influenced by inventory drawdowns, restocking cycles, and order visibility—rather than simply mirroring real-time vehicle sales. Analyst SMM Lithium Battery Analyst Lesley Yang yangle@smm.cn

[Silicon Metal Market Sees Rising Bargaining Sentiment, Focus on Changes in Supply-Side Operating Rates]: This week, the silicon metal market remained in a bargaining stalemate, with the price center of some specifications edging up slightly. As of March 26, SMM east China oxygen-blown #553 silicon was at 9,100-9,300 yuan/mt, up 100 yuan/mt WoW. #441 silicon was at 9,300-9,500 yuan/mt, flat WoW, and #3303 silicon was at 10,200-10,400 yuan/mt, also flat WoW. In the futures market, affected by sentiment and expectations surrounding supply-side factors such as “self-discipline among silicon enterprises and anti-involution,” the most-traded silicon metal contract continued to hold up well over the past week, closing at 8,735 yuan/mt late on Thursday with a notable gain. In terms of quotations, silicon enterprises mostly kept shipment quotes stable, with some quotes testing slight increases; the quote center of trading firms engaging in both spot and futures market rose markedly, and low-priced cargoes disappeared. As downstream acceptance of high prices was limited, high-priced transactions in the market were difficult to conclude.

Yesterday’s night session, copper prices opened lower with a gap, and some enterprises placed orders to restock at low levels. Intraday procurement demand increased somewhat, but given the concentrated replenishment on the previous day, actual incremental buying was limited. From the market structure perspective, the import arbitrage window widened slightly, and expectations for subsequent inflows of cargoes from outside China increased, which may put some pressure on the supply side. Overall, amid the tug-of-war between faster destocking and supplier sell-offs, Shanghai spot copper premiums are expected to remain at current levels tomorrow.

[Sinomine Resource Group Engages with the Zimbabwean Government to Restart Its Lithium Export Business] Sinomine Resource Group confirmed that, after this African country recently suspended shipments of lithium concentrates, the company had been actively engaging with Zimbabwean government authorities to restart its lithium export business. The Chinese miner disclosed this development on Friday in response to an investor inquiry via the Shenzhen Stock Exchange’s official interactive platform. These talks came at a critical time for both Sinomine Resource Group and Zimbabwe. Lithium remained a sought-after mineral because of its essential role in producing batteries used in EVs and renewable energy storage systems. Zimbabwe, which holds substantial lithium reserves, had continued tightening its regulatory framework to ensure more value addition remained in China, rather than allowing the export of raw ore or materials that had undergone only preliminary processing. Sinomine Resource Group said in a statement that it was currently working closely with Zimbabwean government authorities on a new export approval application. The company stressed that the dialogue remained ongoing and formed part of its broader efforts to align with the country’s latest policies and compliance requirements. Although there was no clear timetable yet for when exports would resume, the engagement sent a positive signal that efforts were being made to resolve the issue. Source: https://www.chemanalyst.com/ [Vulcan Energy Achieves Drilling and Permitting Milestones at Its Geothermal Lithium Project in Germany] The company had officially broken ground at the Trappelberg drilling site in the Rohrbach area near Landau. This was Vulcan’s second drilling site after Schleidberg, where the company had completed the drilling and testing of its first geothermal well. Preparatory work at Trappelberg had begun to support the start of drilling in H2 2026. At present, a deep groundwater monitoring well had been completed to ensure the protection of near-surface aquifers during construction and drilling operations. Schleidberg and Trappelberg were 2 of the 5 new drilling sites that Vulcan would develop in the region. Thorsten Weimann, Chief Development Officer and Managing Director of Vulcan Energie Ressourcen GmbH, said: “The groundbreaking ceremony at Trappelberg marks an important step forward in the further development of our Lionheart project. With this new drilling site, we are further developing the geothermal reservoir and laying the foundation for climate-neutral heating in the region and sustainable lithium production in Europe.” Source: https://www.thinkgeoenergy.com/ [Core Lithium’s Finniss Project Secures a Strategic Financing Package of AUD 290 million] The fundamentals of global battery demand were reshaping investment strategies in the critical minerals sector, placing Australia’s lithium industry at a critical turning point. The combined effects of supply chain diversification needs, advances in energy storage technology, and geopolitical factors have created an environment in which strategic positioning determines the long-term value creation potential of mining. In addition, the restart of Core Lithium's Finniss project, backed by A$290 million, demonstrates how well-developed critical minerals strategies can unlock previously stalled projects through innovative financing structures. Against this backdrop, complex financing structures and operational optimization approaches have become key differentiators for projects seeking to capture the evolving market dynamics of the current lithium investment cycle. The sophisticated financing structure underpinning the restart of Core Lithium's Finniss project shows that contemporary mining finance has evolved beyond traditional debt-and-equity models into a strategic consortium model that disperses risk while maximizing operational synergies. Moreover, this financing approach reflects a broader trend across the mining sector. Source: https://discoveryalert.com.au/ [Copper, Cobalt, and Lithium Mines: US Critical Minerals Growth] In early 2026, Secretary of State Marco Rubio, together with senior US officials including Vice President JD Vance and Treasury Secretary Scott Bessent, received representatives from 54 countries and the European Commission at the Critical Minerals Ministerial meeting. The US announced new bilateral frameworks, financing initiatives exceeding $30 billion, and launched the Forum for Resource and Geostrategic Engagement (FORGE), aimed at building secure, diversified, and resilient critical minerals supply chains. Initiatives such as the Orion-Glencore memorandum of understanding and "Project Vault" indicate the US government's commitment to incentivizing private-sector investment and ensuring a stable and reliable supply of cobalt, copper, and other strategic materials, including those from the DRC. Source: https://miningdigital.com/ [Atlantic Lithium's Ewoyaa Project Financing Secures a Strategic Investment of $16.4 million] The global critical minerals landscape is undergoing a fundamental transformation, and institutional capital allocation strategies have moved beyond traditional mining investment models. Pension funds, sovereign wealth funds, and strategic investors now require more sophisticated financing structures to align long-term capital commitments with project de-risking milestones. This shift indicates the growing maturity of financing in the resources sector, which is moving away from speculative early-stage funding toward a more infrastructure-like investment approach that places greater emphasis on predictable returns rather than commodity price speculation. Contemporary lithium project development reflects this evolution, with financing solutions from diversified funding sources incorporating conditional capital structures, local ownership requirements, and ESG compliance frameworks. The combination of milestone-based warrant instruments, strategic partnership agreements, and domestic exchange listings has created an integrated financing ecosystem that balances capital efficiency with political and economic considerations. In addition, these innovations in the lithium industry are continuing to reshape the investment landscape. Source: https://discoveryalert.com.au/

[SMM Titanium Weekly Review: Titanium Dioxide Showed Signs of Recovery; Diverging Strength Across the Titanium Industry Chain Market This Week] This week, the titanium industry chain in China showed pronounced structural divergence, with the tug-of-war between sellers and buyers across upstream and downstream segments intensifying and cost pass-through facing obstacles. Overall, the sector was characterized by a combination of weak recovery and localized strong support. Trading in upstream titanium ore and titanium slag was sluggish. Downstream processing enterprises tightly controlled costs, with procurement consistently maintained at a pace driven by rigid demand. Coupled with inventory at high levels across the industry, the raw material end remained under pressure, enterprises’ willingness to operate stayed weak, capacity release was constrained, and the supply-demand imbalance continued to stand out. In the midstream titanium dioxide segment, pressure from elevated costs of raw materials and energy sharply increased production-side strain. Enterprises held prices firm and showed a strong willingness to sell, and while domestic trade demand did not see a noticeable increase in volume—relying only on rigid-demand support—overseas markets still demonstrated a certain degree of resilience, leaving the overall market running relatively strong. The downstream sponge titanium and titanium products segments performed impressively: sponge titanium inventories remained low, and, together with robust downstream restocking demand, top-tier enterprises proactively adjusted prices, with enterprises showing strong confidence in holding prices firm. The titanium products market saw stable supply and demand: the supply-side operating rate was steady, while demand-side differentiation was evident. Civilian applications were mainly driven by rigid-demand restocking, while orders in high-end fields such as aerospace and military industries were steady. The market recovered steadily, and differences in the pace across segments of the industry chain also set the tone for subsequent market dynamics.

[Industrial Silicon Prices Fluctuated; Polysilicon Price Sentiment Was Weak]: This week, the silicon metal market fluctuated significantly on news, falling first and then rising. As of March 5, SMM east China oxygen-blown #553 silicon was at 9,000-9,100 yuan/mt, with the transaction center moving down WoW; some suppliers quoted at 9,200 yuan/mt. The futures market fell first and then rose, with large fluctuations; amid disruptions from news such as expectations for Xinjiang electricity prices and environmental protection, futures prices recovered from the bottom. As futures prices rose, trading firms engaging in both spot and futures market raised their quotes accordingly; silicon enterprises held quotes steady or increased them by 100 yuan/mt. Low-priced supply in the market shifted from spot-futures to silicon enterprises, and downstream users purchased as needed, selecting lower-priced offers.