According to the data from the China Automotive Battery Industry Innovation Alliance, in the first quarter of 2026, the installed capacity of battery cells in China was 124.9 GWh. Among them, the installed capacity of lithium iron phosphate batteries was 99.0 GWh, accounting for 79.3%, while the installed capacity of lithium cobalt oxide batteries was 25.8 GWh, accounting for 20.7%. Behind these figures lies a decade-long technological route competition.

From the subsidy policy in 2016 that tilted towards higher energy density, which led to a sharp decline in the share of lithium iron phosphate batteries, to the first time in January-February 2025 that the installed capacity of lithium iron phosphate batteries globally surpassed that of lithium cobalt oxide batteries, and then to the current stable market pattern of "80-20" in the Chinese market, each technological iteration in the battery industry has profoundly influenced the development direction of new energy vehicles. While the dominant route pattern has gradually solidified, emerging technologies such as semi-solid batteries, sodium-ion batteries, and all-solid-state batteries are accelerating their breakthroughs.

The battle between the mainstream routes, lithium iron phosphate and lithium cobalt oxide

The competition in battery technology routes is essentially a balance among safety, cost, and energy density. The two technological routes, lithium iron phosphate and lithium cobalt oxide, have experienced fierce competition with each other over the past decade, eventually forming the current market pattern of "lithium iron phosphate dominant, lithium cobalt oxide holding the high-end market".

Back in 2016, China's new energy vehicle subsidy policy first made energy density the core assessment indicator, and the higher-energy-density lithium cobalt oxide batteries experienced explosive growth. At that time, the energy density of lithium iron phosphate batteries was only 120-140 Wh/kg, while lithium cobalt oxide batteries had reached 160-180 Wh/kg. Under the subsidy policy's tilt, the market share of lithium cobalt oxide batteries rose from 32% in 2016 to 65% in 2019, making the industry believe that lithium iron phosphate would be completely eliminated.

However, technological innovation is always the strongest force to break the market pattern. In September 2019, the first generation of CTP technology was upgraded, eliminating the battery module assembly process, increasing the volume utilization rate of the battery pack by 15%-20%, reducing the number of components by 40%, and increasing production efficiency by 50%. In March 2020, the blade battery, by making the battery cells in the form of "blade" shape, directly skipping the module level to form the battery pack, increased the space utilization rate of the battery pack from the traditional 40% to over 60%. These two structural innovations not only significantly increased the energy density of lithium iron phosphate batteries but also fully exerted their safety advantages.

Lithium iron phosphate batteries, with the dual advantages of "safety and low cost", embarked on a comeback path. In January-February 2025, the installed capacity of global lithium iron phosphate batteries reached 59.1 GWh, accounting for 49.9%, surpassing the 49.5% of lithium cobalt oxide batteries; in 2025, the global share of lithium iron phosphate batteries reached around 58%, and in the Chinese market, it was as high as 81.2%.

In fact, the differentiation between the two technological routes in the market is very clear now. Lithium iron phosphate batteries, with the advantages of a heat runaway temperature over 500℃, a cycle life of 3000-10000 times, and a material cost about 30% lower than that of lithium cobalt oxide, almost monopolized the energy storage, commercial vehicle, and mid-to-low-end passenger vehicle markets. In the first quarter of 2026, the shipment of lithium iron phosphate batteries in China reached 209 GWh, increasing by 115%, with a share of over 97%. While lithium cobalt oxide batteries continue to occupy the high-end long-range passenger vehicle market, especially in northern regions and luxury brand vehicles, lithium cobalt oxide is still the preferred choice. However, neither of the two technical routes has stopped advancing. Lithium iron phosphate is upgrading towards lithium manganese iron phosphate (LMFP), by adding manganese elements to lithium iron phosphate to increase the energy density to above 200 Wh/kg while maintaining cost advantages. Meanwhile, lithium-ion batteries continue to make breakthroughs in the directions of high nickelization and cobalt-freeization. From NCM111 to NCM523, NCM622, NCM811, and now the NCM9 series, the nickel content of lithium-ion batteries keeps increasing, while the cobalt content keeps decreasing, and the energy density also increases.

It is worth noting that the data for the first quarter of 2026 shows that the market share of lithium-ion batteries has slightly rebounded, increasing by 3.3% year-on-year. This is mainly due to the recovery of the high-end new energy vehicle market and the demand from consumers for long-range and low-temperature performance. In the future, lithium iron phosphate and lithium-ion batteries will continue to deeply explore their respective advantageous fields, forming a complementary and coexisting market pattern rather than an either-or substitution relationship.

The future technological breakthroughs of semi-solid, sodium-ion, and all-solid-state technologies

As the mainstream technical routes gradually stabilize, the industry's attention turns to the future. 2026 became the year for the mass production of semi-solid batteries and sodium-ion batteries, and the all-solid-state battery, regarded as the "ultimate solution", is also accelerating its breakthroughs in technical bottlenecks and moving steadily towards the production target.

Semi-solid batteries, as a technical route for the transition from liquid batteries to all-solid-state batteries, retains a small amount of electrolyte (10%-30%), adopts a composite structure of solid electrolyte and separator, and solves the safety problems of traditional liquid batteries while significantly improving the energy density. According to the new national standard (GB/T43568-2026) to be implemented in July 2026, the liquid electrolyte content of semi-solid batteries is ≥5%, compatible with 80% of existing production lines, with controllable costs, and is currently the most commercially promising next-generation battery technology.

At the same time as semi-solid batteries entering the mass production year, sodium-ion batteries also came into the mass production year. As a secondary battery that works by the movement of sodium ions between the positive and negative electrodes, the biggest advantage of sodium-ion batteries lies in their abundant resources and low cost. The abundance of sodium in the earth's crust is approximately 400–1000 times that of lithium, and it is widely distributed, without geopolitical risks. The current collectors of both positive and negative electrodes can use cheap aluminum foil, and the material cost is about 15% lower than that of lithium iron phosphate. In addition, sodium-ion batteries have excellent cold resistance performance, maintaining over 90% of their power even in extreme temperatures of -40°C, solving the problem of reduced range of electric vehicles in northern regions during winter.

Currently, major automakers and battery enterprises around the world are actively laying out all-solid-state batteries. However, the industry generally believes that for large-scale commercial application of all-solid-state batteries, it will take at least until 2030.

In the future, the battery power industry will present a "diversity coexistence, segmented scenarios" development pattern. Lithium iron phosphate batteries will continue to dominate in the energy storage, commercial vehicle, and mid-to-low-end passenger vehicle markets; lithium-ion batteries will stick to the high-end long-range market; semi-solid batteries will rapidly rise between 2026 and 2030 and become the mainstream choice for high-end vehicles; sodium-ion batteries will play an important role in energy storage, electric two-wheelers, and low-temperature regions; and all-solid-state batteries will gradually achieve large-scale application after 2030 and eventually become the ultimate solution for battery power.

For consumers, this means there will be more diversified choices in the future. The Chinese battery industry has transformed from a follower in the past to a leader now, and in the future, it needs to continue to increase R&D investment, break through core technical bottlenecks, and build a safer, more efficient, and sustainable battery industry system.