In early to mid-August 2026, CAAM and the CPCA Passenger Car Association successively released relevant data on the auto market for July 2026. CAAM stated that in July, the auto market entered the traditional off-season, with foot traffic and orders naturally pulling back. This was compounded by factors including some demand being brought forward and released by the mid-year sales push, persistent nationwide high temperatures, and typhoons and flooding in certain regions affecting offline sales, resulting in a seasonal pullback MoM and a slight decline YoY. Among them, exports continued to maintain rapid growth, with monthly exports exceeding 1 million units for two consecutive months, and the share of NEV exports exceeding 50% for two consecutive months...... SMM compiled relevant data on the auto and battery markets for July 2026 for readers’ reference. Auto Market CAAM: Auto production and sales declined both MoM and YoY in July; the decline in January-July narrowed further versus H1 In July, auto production and sales totaled 2.573 million units and 2.584 million units, down 6.8% and 8% MoM, and down 0.7% and 0.3% YoY, respectively. From January to July, auto production and sales totaled 17.567 million units and 17.602 million units, both down 3.7% YoY, with the decline narrowing further versus H1. CAAM: NEV production and sales both rose over 20% YoY in July; from January to July, NEV new-vehicle sales reached 51.2% of total new-vehicle sales In July, NEV production and sales totaled 1.576 million units and 1.561 million units, up 26.8% and 23.7% YoY, respectively . NEV new-vehicle sales reached 60.4% of total new-vehicle sales. From January to July, NEV production and sales totaled 9.014 million units and 9.007 million units, up 9.5% and 9.6% YoY, respectively , and NEV new-vehicle sales reached 51.2% of total new-vehicle sales. CAAM: Auto exports exceeded 1 million units for two consecutive months; the share of NEV exports exceeded 50% for two consecutive months In July, auto exports were 1.043 million units, up 0.6% MoM and up 81.3% YoY . From January to July, auto exports were 6.14 million units, up 66.8% YoY. In July, NEV exports were 553,000 units, up 5.7% MoM and up 1.5x YoY ; traditional fuel vehicle exports were 490,000 units, down 4.6% MoM and up 40% YoY. From January to July, NEV exports were 2.909 million units, up 1.2x YoY; traditional fuel vehicle exports were 3.231 million units, up 36.2% YoY. Regarding the auto market in July, CAAM analyzed that in July, the auto market entered the traditional sales off-season, with foot traffic and orders naturally pulling back. Coupled with factors such as some demand being released early due to the mid-year sales push, persistent nationwide high temperatures, and typhoons and flood disasters in some regions affecting offline sales, the market showed a seasonal pullback on a MoM basis and edged down YoY. Exports continued to maintain rapid growth, with monthly exports exceeding 1 million units for two consecutive months, and the share of NEV exports exceeding 50% for two consecutive months; the share of NEVs in monthly new-car sales exceeded 60% for the first time, and the cumulative share exceeded 50% for the first time. On July 30, the Political Bureau of the CPC Central Committee convened a meeting to deploy economic work for H2, explicitly proposing to implement a more proactive fiscal policy and a moderately accommodative monetary policy, fully leverage the effectiveness of existing policies, and promptly plan and introduce pragmatic and effective incremental policy, while stepping up countercyclical adjustments. It called for effectively expanding domestic demand and fostering a fair and orderly market competition environment. The meeting made a series of important deployments, releasing multiple positive signals that will help stabilize confidence, boost consumption, and promote the steady operation of the industry. Meanwhile, the CPCA also released relevant data for the passenger car market in July. In July 2026, nationwide passenger car market retail sales were 1.461 million units, down 20.9% YoY and down 8.8% MoM; cumulative retail sales since the beginning of this year were 10.173 million units, down 20.3% YoY. In July 2026, China’s passenger car market showed an operating trend of “total volume remaining under pressure, weakening MoM, and an extremely polarized structure,” with the off-season downturn becoming more pronounced and the industry’s structural adjustment further deepening. For passenger NEVs, in July, passenger NEV market retail sales were 951,000 units, down 3.9% YoY and down 5.8% MoM; from January to July, passenger NEV market retail sales were 5.668 million units, down 12.5% YoY. In July, retail sales of conventional fuel passenger cars were 510,000 units, down 41% YoY and down 14.2% MoM; among them, regular hybrid car models were down only 4% YoY and down 5% MoM. In terms of NEV exports, in July, passenger NEV exports were 540,000 units, up 147.8% YoY and up 8.1% MoM . They accounted for 58.8% of passenger car exports, up 14 percentage points compared to the same period last year; among them, BEVs accounted for 59.5% of NEV exports (65.1% in the same period last year), and A00+A0-class BEVs, the core focus, accounted for 42.2% of BEV exports (36.6% in the same period last year). As the scale advantage of China’s NEVs becomes evident and market expansion needs grow, new energy brand products made in China are increasingly going global, with recognition outside China continuing to rise. Among them, narrow PHEVs accounted for 35.9% of new energy exports (32.4% in the same period last year), and range-extended vehicles accounted for 4.6% (2.5% in the same period last year). Although there have recently been some disruptions from external countries, exports of domestically branded narrow PHEVs to developing countries have grown rapidly, with a promising outlook. The CPCA stated that in July 2026, China’s passenger vehicle market showed an operating trend of “overall volume remaining under pressure, weakening MoM, and extremely polarized structure,” with the off-season downturn becoming more pronounced and the industry’s structural adjustment further deepening. The weakening auto market in July 2026 resulted from the combined resonance of multiple factors, including a rebound in oil prices, macro weakness, the seasonal off-season, earlier demand being pulled forward, and policy transitions. Geopolitical conflicts disrupted navigation through the Strait of Hormuz, driving international oil prices to drift higher; in 2026, China’s domestic gasoline prices were cumulatively raised by 1,575 yuan/mt, significantly increasing driving costs. Consumer demand for internal combustion engine passenger vehicles contracted sharply, while the impact on commercial vehicles was minimal. Meanwhile, July CPI and PPI pulled back MoM and PMI sentiment weakened; residents’ income and consumption expectations were relatively cautious, willingness to purchase big-ticket durables remained subdued, and spending on housing and travel continued to weaken, dragging down end-use demand in the auto market. In addition, the July off-season high temperatures suppressed offline store traffic, and June’s mid-year sales push pulled demand forward, causing terminal orders and foot traffic to pull back in tandem. Moreover, the new national safety standard for new energy was formally implemented, raising the industry’s technical threshold, and the short-term exit the market of low-end car models disrupted the market. However, the July Politburo meeting made clear stronger fiscal support and intensified policies to expand domestic demand and boost consumption, providing a floor for the auto market; the current downturn is a phased, structural fluctuation rather than a trend-level deterioration of the industry. Overall, the passenger vehicle market in July 2026 showed five salient characteristics: (1) Overall volume remained under pressure and structural divergence was amplified to the extreme; “deep cooling in internal combustion engine vehicles and strong leadership by new energy” became the core market theme, and oil price fluctuations dictated the pace of “ICE-to-NEV substitution”; (2) Internal combustion engine vehicles contracted across the board, with pure ICE models nearly stalling while hybrid models were relatively resilient, leading to continued optimization of the internal structure of ICE vehicles; (3) The penetration rate of new energy continued to hit new highs, with compliant products under the new national standard launched in concentrated iterative cycles on the supply side, and the industry shifted comprehensively from price involution to value competition; (4) Exports continued to play a stabilizing role, effectively steadying automakers’ wholesale and capacity and easing pressure from weak domestic retail; (5) Industry inventory continued to be reduced in a healthy manner, with producer and channel inventory declines widening in tandem, overall inventory risks fully released, operating pressure easing steadily, and overall resilience partially recovering. Power batteries From January to July, China’s cumulative production of power batteries and ESS batteries totaled 1,286.9 Gwh, up 54.9% YoY. In July, China’s combined production of power batteries and ESS batteries was 218.0 Gwh, up 5.8% MoM, up 62.9% YoY . From January to July, China’s cumulative production of power and ESS batteries totaled 1,286.9 GWh, up 54.9% YoY on a cumulative basis. From January to July, China’s cumulative exports of power and ESS batteries reached 216.6 GWh, up 43.9% YoY on a cumulative basis In July, China’s combined exports of power and ESS batteries totaled 35.2 GWh, down 2.7% MoM , up 51.7% YoY , accounting for 19.0% of monthly sales. Of this total, power battery exports were 24.0 GWh, accounting for 68.0% of total exports, down 6.0% MoM and up 62.1% YoY; ESS battery exports were 11.3 GWh, accounting for 32.0% of total exports, up 4.9% MoM and up 33.4% YoY. From January to July, China’s cumulative exports of power and ESS batteries reached 216.6 GWh, up 43.9% YoY on a cumulative basis , accounting for 18.6% of cumulative sales. Of this total, cumulative power battery exports were 146.7 GWh, accounting for 67.7% of total exports, up 52.1% YoY on a cumulative basis; cumulative ESS battery exports were 69.9 GWh, accounting for 32.3% of total exports, up 29.3% YoY on a cumulative basis. From January to July, China’s cumulative power battery installations totaled 410.2 GWh, up 15.4% YoY on a cumulative basis In July, China’s power battery installations were 74.6 GWh, down 2.5% MoM , up 33.5% YoY. Of this total, ternary battery installations were 11.1 GWh, accounting for 14.9% of total installations, down 12.1% MoM and up 1.8% YoY; LFP battery installations were 63.1 GWh, accounting for 84.6% of total installations, down 1.0% MoM and up 40.5% YoY. From January to July, China’s cumulative power battery installations totaled 410.2 GWh, up 15.4% YoY on a cumulative basis. Of this total, cumulative ternary battery installations were 74.5 GWh, accounting for 18.2% of total installations, up 12.1% YoY on a cumulative basis; cumulative LFP battery installations were 335.1 GWh, accounting for 81.7% of total installations, up 16.0% YoY on a cumulative basis. In July, Leap Motor Deliveries Surpassed 100,000; BYD’s Overseas Sales Hit Another Record High Among new automakers in July, Leap Motor continued to gain momentum, with deliveries reaching 101,267 units in July , up 102% YoY, surpassing the 100,000 mark for the first time on a monthly basis , becoming the first new automaker brand in China to achieve monthly deliveries exceeding 100,000 units, and ranking among the leaders across the entire new energy industry. The second-ranked NEV startup automaker was XPeng Group. In July, XPeng Group delivered a total of 38,027 vehicles, up about 4% YoY . As of July, XPeng Group’s cumulative global deliveries surpassed 1.2 million units. In terms of charging stations, as of July 31, XPeng charging covered 430 cities, with more than 3,800 cumulative self-operated charging stations, including over 3,300 self-operated ultra-fast charging stations, continuously providing users with a more convenient and efficient charging experience. NIO delivered a total of 35,934 vehicles in July, up 71.0% YoY. Of these, the NIO brand delivered 20,008 vehicles, up 57.9% YoY; the ONVO brand delivered 10,155 vehicles, up 69.9% YoY; and the firefly brand delivered 5,771 vehicles, up 143.9% YoY. In the first seven months of 2026, NIO delivered a total of 227,057 vehicles, a record high, up 68.0% YoY, with all three brands setting record highs in deliveries over the first seven months. The NIO brand delivered 139,496 vehicles, up 60.1% YoY; the ONVO brand delivered 52,618 vehicles, up 39.1% YoY; and the firefly brand delivered 34,943 vehicles, up 242.3% YoY. To date, NIO has delivered a cumulative total of 1,224,649 vehicles. Li Auto delivered 30,468 vehicles in July. As of July 31, 2026, Li Auto’s cumulative historical deliveries totaled 1,764,155 vehicles. Li Auto said that as of July 31, 2026, it had 490 retail centers nationwide, covering 159 cities; and 536 after-sales maintenance centers and authorized service centers, covering 219 cities. Li Auto had put into use 4,141 Li Auto supercharging stations nationwide, with 22,841 charging piles. As for Xiaomi Auto, its July deliveries again exceeded 30,000 units. To date, Xiaomi Auto has delivered more than 30,000 units for four consecutive months. Notably, since officially entering the automotive market in 2024, Xiaomi Auto has launched two car models, including the SU7 and YU7. As of month-end July, the two car models had delivered a cumulative total of over 700,000 units. As for EV leader BYD, its July sales reached 419,211 units, with exports of nearly 180,000 units, setting another record high. From January to July 2026, cumulative sales totaled 2,227,722 units, and cumulative NEV sales exceeded 17.3 million units. In July 2026, BYD exported 180,538 NEVs. In the same month, NEV production was 420,249 units, versus 317,892 units in the same period last year; cumulative production this year totaled 2,234,379 units, versus 2,454,925 units last year, down 8.98% on a cumulative YoY basis. Sales totaled 419,211 units, versus 344,296 in the same period last year; cumulative sales this year reached 2,227,722 units, versus 2,490,250 last year, down 10.54% YoY on a cumulative basis. Looking ahead to August, the CPCA expected the overall passenger car market in August 2026 to show an operating pattern of “weak recovery in total volume and sharp structural divergence.” With 21 production-and-sales working days compounded by the off-season of extreme heat, the end-use market’s recovery pace remained mild, and a mix of macro and industry factors jointly shaped the market landscape. Affected by disruptions to navigation through the Strait of Hormuz, international oil prices drifted higher in July, and China’s refined oil prices were raised by nearly 985 yuan/mt in total across two rounds, significantly lifting the costs of using and maintaining internal combustion engine vehicles and continuing to suppress users’ willingness to purchase them. Demand for traditional internal combustion engine vehicles continued to weaken, which also became a key external tailwind for new energy vehicles to strengthen against the trend, continuously expanding growth room for new energy car models in China and in markets outside China. Overall, the CPCA expected the auto market in August to be in a bottoming phase of rebuilding momentum and recovery. As various policies to stabilize consumption were gradually implemented, together with a gradual improvement in the base effect, the decline in the passenger car market was expected to narrow steadily, and the industry was set to formally enter a mature development stage of “value-driven growth and structural optimization,” building momentum and paving the way for the traditional September-October peak season.

[SMM Analysis: Sodium-Ion Battery Industry Insight: Key Paths to Industrialisation and Evolution of Pricing Mechanisms] SMM August 20: The sodium-ion battery industry is at a delicate time window — low lithium battery prices have compressed the substitution space for sodium-ion batteries, while the scaling effect of sodium-ion batteries themselves has yet to materialise. However, gathering core judgments from battery cell manufacturers, material suppliers, academia, and standard-setting bodies, the industry has released a clear signal: sodium-ion batteries are not a question of "whether to do it," but rather "how to do it right.

Recently, the China Automotive Power Battery Industry Innovation Alliance released monthly power battery data for July 2026. Data showed that in July, China's power battery installations reached 74.6 GWh, down 2.5% MoM but up 33.5% YoY. From January to July, cumulative power battery installations in China amounted to 410.2 GWh, up 15.4% YoY. Market concentration, in July, a total of 31 power battery enterprises achieved installation support in China's NEV market, down 2 from the same period last year. The installations of the top 2, top 5, and top 10 enterprises were 45.7 GWh (61.2% of total), 60 GWh (80.5%), and 70.4 GWh (94.3%), respectively. The share of the top 10 was flat compared to the same period last year.

Entering Q3, the battery-grade nickel sulphate spot market appears to be "losing vitality," with reduced transaction frequency and relatively weak price trends. SMM believes this is primarily driven by a combination of three factors: weakening cost support, a gradually loosening supply-demand pattern, and a shift in market structure. This article will discuss these three factors in detail. I. Cost Side: Weakening Nickel Prices and Raw Materials Together In terms of nickel prices, August marks the period for the release of additional quotas in Indonesia, which has tempered market expectations of a significant shortage of Indonesian nickel ore. Coupled with the ongoing "shadow" of macroeconomic interest rate hikes, nickel prices have weakened. On the MHP payables front, following the concentrated arrival of sulphur in Indonesia, the supply of Indonesian intermediate products is expected to continue rising. According to SMM data, Indonesia's MHP supply-demand balance turned positive in July for the first time in a month. Meanwhile, downstream nickel and cobalt salt prices (especially cobalt salts) remain relatively weak, and downstream players are under pressure from losses, showing lower acceptance of high payables. Consequently, MHP payables remain under pressure overall. The market availability of high-grade nickel matte remains tight, and its payables are expected to hold steady. With both nickel prices and raw material payables declining, the spot production cost of nickel sulphate in August is expected to weaken overall from a spot cost perspective. II. Supply Side: High Raw Material Flexibility, Production Schedules Expected to Rise Since Q2, although MHP production schedules fell sharply at one point, nickel sulphate supply levels remained relatively stable, and no prolonged undersupply emerged. In Q3, as intermediate product production schedules gradually recover, this trend is expected to become more pronounced. According to SMM data, while battery-grade nickel sulphate production in July dipped 2% MoM due to production cuts or maintenance at some salt plants, August output is expected to rise over 8% MoM, returning supply to high levels. Total battery-grade nickel sulphate production from January to August 2026 grew 33% YoY. Behind this steady output lies strong supply flexibility in nickel salt raw materials. In addition to the adjustments using refined nickel raw materials and the substitution between high-grade nickel matte and MHP discussed in previous articles, recycled materials have also contributed a significant supply scale for nickel sulphate this year. On the one hand, after China opened up imports of lithium battery black mass last year, recycled raw materials have been able to be imported steadily, providing incremental raw material for recycled nickel sulphate. On the other hand, as the scale of ternary battery decommissioning gradually expands, and with some companies launching new recycling projects this year, the overall supply scale of black mass in the industry has risen. According to SMM data, the output from pulverising scrap ternary batteries in July doubled compared to the same period last year, providing significant flexibility for nickel sulphate supply. III. Demand Side: NMC Demand Supports Overall Consumption Volume but Fails to Directly Drive External Spot Purchases NMC demand exceeded expectations this year, serving as a key reason nickel sulphate maintained a relatively high premium. Consumption of nickel sulphate by downstream enterprises is expected to remain elevated in Q3. On one hand, with the September-October peak season for auto sales approaching, top-tier downstream players hold favorable demand expectations for mid-to-high nickel materials, driving higher production schedules at associated precursor plants. On the other hand, overseas high-nickel orders secured by leading firms have also stayed at high levels, supported by robust demand in Europe and other regions and by installation rush strategies triggered by adjustments to battery cell export tax rebate policies. According to SMM data, demand for battery-grade nickel sulphate in the new energy sector rose 1.55% MoM in July and is expected to grow a further 0.9% in August. However, the top-tier precursor enterprises with relatively strong orders are highly integrated, with several possessing refined nickel production capacity and ample flexibility to adjust in-house nickel sulphate output. As a result, the downstream demand increase provides limited direct stimulus to spot nickel sulphate procurement. According to SMM data, the combined production schedule of the five leading integrated and semi-integrated enterprises rose 11% MoM in August, and in-house output can meet over 80% of their raw material needs, meaning the incremental demand for externally purchased nickel sulphate was not significant. IV. Market Structure: Expanding Long-Term Contract Scale Squeezes Spot Order Space A notable structural shift in the Q3 nickel sulphate market is the expansion in the scale of long-term contracts. SMM estimates show that monthly spot orders for nickel sulphate stood at roughly 3,500-4,500 mt in metal content in 2025 and Q1 this year. Against the backdrop of rising NMC demand, this scale has shrunk to around 2,000 mt in metal content in Q3. At the start of the quarter, spot orders were expected to gradually retreat from monthly just-in-time procurement to a supplementary role for long-term contracts in corporate purchasing strategies, with additional purchases made only when clear downstream demand increments or raw material supply disruptions occur. This has suppressed market activity in August and early September. Moreover, with no significant decline in nickel sulphate supply, downstream acceptance of spot prices remains generally low. The expansion of long-term contracts stems from two factors. First, the high volatility in nickel prices and raw materials this year has intensified decision-making pressure on enterprises for spot orders, prompting a tendency to lock in demand through long-term contracts. Second, after persistent overcapacity, few new entrants have emerged, and industry supply chains have stabilized, with upstream and downstream enterprises gradually forming steady cooperative relationships. In the long term, the overall scale of long-term contracts is still expected to trend upward. V. Market Outlook As mentioned above, the supply and demand of nickel sulphate spot orders has shifted from relative tightness in Q2 to a slight surplus. From August to early September, prices are expected to be generally in the doldrums; after the downstream demand for the 'September-October peak season' becomes clear in September, the spot order market activity may recover to some extent, driving a rebound in nickel sulphate prices.

On the evening of July 30, Xiaomi Auto held its second technology conference, officially unveiling the new "Kunlun Technology Architecture" and introducing two extended-range SUVs from the Pengcheng series—the flagship seven-seat N90 Max (presale price 299,900 yuan) and the five-seat N70 Max (presale price 259,900 yuan). This marks Xiaomi Auto's formal entry into the extended-range segment, forming a dual-line product landscape alongside the pure electric SU7/YU7 series. Both new models are set to be officially launched and delivered in September, with the entry-level N70 expected to reach the 200,000 yuan price range. Based on the information released at the conference, the Pengcheng series demonstrates a clear "large-battery extended-range" approach in battery configuration. The N70 Max offers a CLTC pure electric driving range of up to 505 km, while the N90 Max delivers a combined range of 1,705 km. Its 76 kWh battery capacity places it in the top tier among extended-range models. Lei Jun emphasized at the conference that 70% of Xiaomi car owners drive no more than 400 km per week, meaning that the 505 km pure electric range allows most users to treat the vehicle as a full EV in daily use, with the range extender intervening only during long-distance trips. In terms of power, both models are equipped with a 1.5T four-cylinder range extender paired with dual-motor all-wheel drive. The N90 Max accelerates from 0 to 100 km/h in 5.9 seconds, while the N70 Max takes just 5.5 seconds. WLTC fuel consumption under battery depletion is 6.26 L/100 km and 6.1 L/100 km, respectively, balancing performance and efficiency. This product definition aligns closely with the "large-battery" trend in the 2026 extended-range market—60 kWh-plus has become standard for mid-to-high-end extended-range vehicles, and some models have already exceeded 80 kWh. The large-battery strategy directly boosts demand for ternary lithium batteries in the extended-range segment, creating new shipment growth opportunities for battery suppliers. Additionally, the "Dragon Armor Battery" system Xiaomi simultaneously introduced warrants continued attention. Defined in-house by Xiaomi, with leading design and development and full-process quality control, the system requires a battery cell cycle life of 2,000 cycles, and its bottom anti-scratch design can withstand an impact energy of 500 J. It also requires no fire or explosion under 55°C full-charge thermal runaway conditions. Combined with the armored cage-style auto body (2,200 MPa ultra-high-strength steel) and an emergency flotation function, Xiaomi offers a solution that exceeds competitors in the safety dimension. Although the Dragon Armor Battery currently still relies on externally purchased battery cells, Xiaomi's deep involvement in battery pack design and quality control reflects an industry trend of automakers gaining greater influence in the battery segment. The potential impact on the battery supply chain landscape is worth monitoring. Overall, the launch of Xiaomi Pengcheng not only represents an improvement in Xiaomi’s product lineup but also reflects the accelerated arrival of the "large battery" trend in the extended-range vehicle segment. As official deliveries ramp up in September, the boost effect of large-battery EREV models on ternary batteries will gradually materialize, and the shipment performance of the relevant supply chain will become an important tracking indicator for the lithium battery industry chain.

[SMM Cobalt & Lithium Morning Brief: Battery Material Prices Show Divergent Trends, End-user Procurement Remains Cautious] Lithium ore prices are in the doldrums but low-priced resources are limited, lithium carbonate spot and futures prices rebounded, and lithium hydroxide maintained a steady slight increase. Refined cobalt and cobalt salt are generally in the doldrums, impacted by off-season demand, sufficient inventory, and cautious procurement. Nickel sulphate cost support strengthened, ternary cathode precursor prices held steady, and ternary cathode material rebounded slightly, but actual cargo pick-up remained cautious. LFP prices declined along with raw material, while shipments continued to grow, supported by energy storage and commercial vehicle demand. Anode, separator, and electrolyte prices were generally stable, with expectations for some raw material cost transmission downstream. Sodium-ion battery material supply remained relatively tight, while the recycling market consolidated on a weak note due to fluctuations in lithium and cobalt raw material prices.