The African Development Bank Group (AfDB) has officially approved a €100 million (approximately $114 million) loan to Gotion Power Morocco, a subsidiary of Gotion High‑Tech, for the construction of the first lithium iron phosphate (LFP) battery gigafactory in Africa and the MENA region. As the lead arranger under the “New Architecture for Financing Africa's Development” (NAFAD) initiative, the AfDB also plans to raise up to an additional €141 million from partner financial institutions to ensure sufficient project funding. The project is located in Phase III of the Kenitra Atlantic Free Zone, in the Rabat‑Salé‑Kenitra region of Morocco, and covers the full industrial chain from cathode material production, cell manufacturing, to battery pack assembly. Phase I is planned with an annual capacity of 10 GWh for EV battery cells and packs; with subsequent phased expansions, the total capacity is expected to gradually reach 100 GWh in the long term. Phase I is projected to directly create more than 600 high‑skilled jobs and raise Morocco's local industrial integration rate to 70%, significantly boosting the local supplier ecosystem and technical workforce development. AfDB Vice President Kevin Kariuki noted that battery energy storage is the “missing piece” in Africa's clean energy transition. The plant will primarily operate on renewable energy (wind and solar power), which will not only support large‑scale grid integration of new energy but also provide low‑carbon and reliable energy storage solutions. Leveraging Morocco's abundant phosphate resources and China's advanced battery refining and manufacturing technologies, the project will accelerate the local high‑value‑added conversion of critical minerals, shifting away from the traditional export of raw materials. It will help Morocco establish itself as a green mobility industrial hub serving both Europe and the entire African continent. This investment is highly aligned with the AfDB's four strategic pillars: resilient infrastructure development, accelerated industrialization, regional integration, and value addition to natural resources. It marks a milestone in the improvement of Africa's new energy industrial chain.

In H1 2026, South Korea’s NEV sales and exports posted double-digit growth, while domestic battery output declined. BEV sales rebounded from a low base, but export growth was led by hybrids, limiting the impact on large-format battery and NCM demand. NCM cell output continued to fall, while LFP capacity expanded. LFP-based ESS is emerging as a new growth driver, but remains too small to offset the NCM decline.

In 2026, as restored lithium iron phosphate (LFP) capacity expands from 150,000–160,000 tons to 170,000–180,000 tons, traditional hydrometallurgical LFP recycling companies are facing a wave of profit and competitive landscape reshaping driven by rivalry between different technological routes.

With the booming development of the new energy vehicle industry, China's first wave of power batteries has entered a large-scale retirement phase. Recently, lithium battery recycling projects have been intensively launched across multiple regions nationwide, covering every link of the industrial chain — from dismantling and crushing to hydrometallurgy, from cascade utilization to material regeneration.

With the vigorous development of the NEV industry, China's first batch of power batteries entered a large-scale "retirement period." Recently, lithium battery recycling projects were intensively launched nationwide, from dismantling and crushing to hydrometallurgy, from second-life application to material regeneration, comprehensively accelerating the layout of all links in the industry chain.

Since July, demand across the LFP industry chain has continued to rise, but the supply-side response has lagged. The most notable feature of the current market is that supply tightness is rapidly transmitting from downstream to upstream, creating a cascading inversion of "battery cell production schedule > LFP cathode production schedule > iron phosphate production schedule."

Recently, the company and the management committee of Huanggang High-tech Industrial Development Zone, Hubei, held a signing ceremony for the LFP battery circular base project. According to public information, the project adopts the combined "physical dismantling + hydrometallurgy" recycling process. Production lines cover waste LIB dismantling, reduction roasting furnace, carbonization, leaching and purification, extraction, and evaporative crystallization equipment. Final products include battery-grade lithium carbonate, battery-grade nickel sulfate, battery-grade cobalt sulfate, and battery-grade manganese sulfate, achieving closed-loop recycling from waste batteries to high-end battery materials.

Recently, the ecological environment authority of Ji'an, Jiangxi, released the proposed approval for the EIA report of the annual 15,000-ton spent LFP battery expansion project. The project involves a total investment of RMB 30 million, located in Chengnan Industrial Park, Xiajiang Industrial Park, Ji'an. Using spent LFP battery cells as raw material, it adopts processes including cutting, primary crushing, drying pyrolysis, cooling, and screening to produce battery powder, copper, and aluminum. Upon completion, it will achieve an annual processing capacity of 15,000 tons of spent LFP battery cells, yielding 8,878.39 tons of LFP battery powder, 1,499.72 tons of copper foil, and 1,143.17 tons of aluminum foil.

[SMM Analysis] The demand along the LFP industry chain continues to rise, but the response from the supply side is significantly lagging. The most notable feature of the current market is that supply tightness is rapidly transmitting from the bottom up, forming a cascading inversion of "battery cell production schedule > LFP cathode production schedule > iron phosphate production schedule," with the slow release of LFP capacity and the iron phosphate industry segment having become the most prominent bottleneck in the entire chain.

In July, China’s EV battery cell output rose about 10% MoM, with LFP technology continuing to serve as the primary driver of growth. Demand side, new car models kept increasing vehicle battery capacity, while accelerating commercial vehicle electrification jointly lifted power battery cell demand. Among these, LFP power batteries, leveraging cost advantages and safety, saw further penetration rate gains in both passenger and commercial vehicle segments, becoming a key force in the overall output expansion. Notably, expectations of the formal battery consumption tax taking effect in early September had a certain pull-forward effect on production schedules for July–August. Some battery companies and automakers stepped up stockpiling ahead of the policy window to reduce subsequent tax costs. Against this backdrop, August power battery cell production schedules are expected to maintain a robust growth rate of around 8% MoM for both LFP and ternary power battery cells, supported by peak-season stockpiling and the “consumption tax rush.” Looking ahead, as the “installation rush” effect gradually fades, the pace of power battery cell production scheduling in September is expected to slow, with MoM growth possibly retreating to the 5%–6% range. In the longer term, once the consumption tax policy is implemented, all segments of the battery industry chain will face a new round of cost pass-through and price competition, and enterprises’ production planning strategies will shift from “policy-driven” to “demand-driven,” with the market poised to enter a new rebalancing phase.