Why LiFePO₄ Cell Prices Are Rising Again

Over the last few months, we’ve started to see LiFePO₄ cell prices move upwards after a long period of decline. At Fogstar, we think it’s important to explain what’s actually driving this, because this time it isn’t speculation or panic buying.

In short, lithium is getting more expensive again, and Chinese government tax changes mean factories can no longer subsidise export pricing.

Lithium prices are rising

Battery‑grade lithium carbonate prices in China have climbed back to roughly ¥150,000 per tonne, up around 8–9% in a single month at the start of 2026.

Lithium carbonate is a key raw material in LiFePO₄ cathodes. While LiFePO₄ uses less lithium than nickel‑based chemistries, lithium pricing still feeds directly into cell costs. When lithium was falling through 2024 and 2025, cell prices followed. Now the direction has changed.

This move isn’t a repeat of the 2022 bubble. Back then, prices were driven by aggressive EV forecasts and panic buying. Today’s increase is more grounded, reflecting the reality that lithium prices fell below sustainable production costs, forcing mines and refiners to slow or stop output.

Chinese export tax changes matter

Another major factor is a recent policy change from the Chinese government.

In January 2026, it was announced that:

• From 1 April 2026, export VAT rebates on photovoltaic products will be removed

• For battery products, the VAT export rebate will drop from 9% to 6% during 2026, and be removed entirely from 1 January 2027

These rebates previously helped manufacturers offset costs when exporting. Once they are reduced or removed, factories lose a chunk of margin overnight.

In reality, manufacturers have very limited options: absorb the cost, reduce quality, or increase prices. Unsurprisingly, price increases are already being reflected in new cell quotations.

Why this hits LiFePO₄ cells directly

In the space of roughly four weeks, LiFePO₄ cell pricing has increased by around 30%, and manufacturers are still signalling further rises.

Cell manufacturing is a low‑margin, high‑volume business. There isn’t much room to absorb rising raw material costs and lost tax rebates at the same time.

When lithium prices rise and export incentives disappear together, cell prices have to move. This is already visible across multiple Tier‑1 suppliers.

What this means for customers

• Stock purchased during the low‑price period still benefits from those costs

• New production runs are coming in at higher prices

• This affects cells first, then complete batteries and energy storage systems

This isn’t a short‑term blip caused by shipping or exchange rates. It’s a structural change driven by raw materials and policy.

Fogstar’s approach

At Fogstar, our focus is on planning ahead rather than reacting late.

We’ve secured stock during the lower-cost period and are continuing to supply from that inventory while it lasts. This allows customers ordering now to benefit from pricing that reflects earlier cell costs, rather than today’s rising replacement costs.

As new production runs are quoted at higher levels, future pricing will inevitably reflect those increases. That isn’t about market sentiment or short-term noise, it’s simply how the cost base is moving.

Our approach is to remain transparent, avoid knee‑jerk price changes, and give customers as much notice as possible. For those already planning projects or upgrades, ordering sooner rather than later helps lock in current pricing before higher-cost stock becomes the norm.