For more than a decade, the world became accustomed to an idea that seemed unquestionable: batteries—the heart of electric cars, of renewable energies, of data centers and of modern warfare— would be increasingly cheaper. China mass-produced them, dominated the technology, controlled critical materials and accepted minimal margins, even losses. For the West, the model was comfortable: import, reduce costs and accelerate the energy transition. That normality, however, has begun to crack. A turning point in the Chinese market. In recent months, several lithium battery manufacturers have begun to announce price increases after almost three years of fierce competition and below-cost sales. According to South China Morning Postthe most visible case is that of Deegares, which reported an increase of 15%, opening a debate on whether the sector is beginning to emerge from the “involution” cycle, a dynamic in which producing more, selling cheaper and earning less had become the norm. The immediate trigger has been the rise in the price of lithium, which has risen around a 70% from its annual minimum. This rebound responds to several overlapping factors: the rise of data centers for artificial intelligence, a rebound in demand for electric vehicles in China and an increasingly explicit intervention by the State to organize the sector. The Chinese Ministry of Industry itself has gathered to the main market players and has promised to accelerate measures to stop the so-called “irrational competition”. A stressed model. Sales prices for energy storage systems in China have plummeted by up to 80% in just three years. Some companies operate with gross margins of 15% to 20% in the domestic market, a far cry from the 40% or 50% common in the United States. The real profitability, analysts cited by SCMP admitwas in exports. And exporting, China has continued to dominate. This year it has managed to sell lithium batteries worth more than $69 billion. According to the analysis of energy expert Gavin Maguire in Reutersthis milestone is explained by the voracious hunger of Germany and the United States for large-scale storage systems, essential to stabilize electrical networks saturated by renewables and data centers. In practice, every new AI data center in Europe or North America starts with a silent dependency: thousands of batteries designed, manufactured and assembled in China. The low price hid an uncomfortable reality. All this time there was a truth that no one said out loud, perhaps because it was so obvious: there was no real Chinese alternative. This new year 2026 will be marked by the massive expansion of data centers that power artificial intelligence, facilities that consume amounts of electricity comparable to that of a small city and that need large-scale batteries to guarantee a continuous supply. Google has installed more than 100 million lithium-ion cells in its data centers, while Microsoft plans to eliminate diesel generators before 2030, replacing them with batteries to meet their climate goals. The forecasts confirm that the risk is not theoretical. The International Energy Agency sums it up crudely. If in 2024 China manufactured 99% of the world’s LFP cells and refined most of the critical materials such as lithium and graphite. For its executive director, Fatih Birol, depend on a single country For a strategic technology, it is a risk comparable to that posed to Europe by its dependence on Russian gas. The Chinese adjustment. Far from retreating, Beijing now seeks to organize the sector without losing its dominance. State intervention translates to braking the most extreme overcapacity, review mining licenses, limit sales at a loss and allow prices to rise to sustainable levels. The objective is not to make batteries abruptly more expensive, but to prevent a strategic industry from self-destructing by competing with itself. Control of raw materials remains the central lever. China process around of 80% of the world’s lithium and produces nearly 90% of the anodes and electrolytes used in batteries. When the United States or Europe impose tariffs, China responds by restricting exports of critical metals. The message is unmistakable: the power lies not only in making batteries, but in controlling every link in the chain. The Western Response. In parallel, the United States and Europe are trying to react. According to Sprott’s reportWestern governments have begun to treat lithium and batteries as strategic assets. Washington has invested directly in mining projectshas multiplied the number of planned gigafactories and has included restrictions on the purchase of Chinese batteries in defense legislation. Europe is following a similar, albeit slower path, supporting local extraction and refining projects and seeking to reduce its dependence on China. Big oil companies like Exxon either Chevron have entered the lithium business, and countries like Germany finance domestic production to ensure supply and reduce geopolitical risks. Still, the consensus among analysts it is clear: replicating the Chinese model will take years. Environmental regulations, labor costs and the absence of centralized industrial planning make competing on price impossible for now. Decoupling, if it comes, will be slow, expensive and politically uncomfortable. A planned domain. It is the direct result of the plan Made in China 2025with which Beijing decided to stop being the world’s cheap factory to become a technological leader. China already dominates solar panels, wind turbines, electric vehicles and lithium batteries. In addition, it controls strategic minerals such as graphite and has vertically integrated the entire value chain. In fact, the Asian giant It is the first “electrostate” in the world: a power whose power is no longer based on oil, but on renewable gigawatts, electrons and batteries. This strategy has reduced its emissions, weakened petrostates and turned its energy industry into a tool of global influence. The true cost of batteries. For years, this low price allowed us to accelerate the global energy transition, but it also created a deep and silent dependency. Now that China begins to organize its market, raise prices and prioritize its own industrial strategy, the world begins to discover the real cost of having delegated the heart of its energy system. Batteries are no … Read more