Summary of the Analysis
This analysis serves as a comprehensive “health check” for the two leading lithium companies in China: Ganfeng Lithium and Tianqi Lithium. It predicts that in the coming years, the price of lithium carbonate will no longer experience the extreme fluctuations of the past, where prices could soar several times or plummet by 80%, but will instead remain stable within a narrow range of 150,000 to 200,000 yuan per ton. Tianqi Lithium, which once reaped substantial profits by owning top-tier overseas lithium mines, is seeing its competitive advantage rapidly diminish. In contrast, Ganfeng Lithium, which has invested years in diversifying its lithium resource holdings and expanding into the downstream battery production sector, has already closed the gap in revenue and is on its way to catching up in terms of profitability. In the long run, Ganfeng Lithium’s risk resistance and growth potential are significantly higher than those of Tianqi Lithium, which relies solely on its mineral resources.
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Detailed Breakdown of the Analysis
1. The End of the “Easy Profit” Era for Lithium
Many people’s perception of lithium prices was that they were as volatile as the price of garlic: in 2022, the price of lithium carbonate soared to 500,000 yuan per ton, ten times its cost, only to plummet to 50,000 yuan per ton in 2024, leaving mining companies struggling to even pay their employees. However, such extreme price movements are unlikely to happen again. The demand for new energy vehicles and energy storage is providing a steady support, preventing lithium prices from falling to extremely low levels. Additionally, new mining capacities around the world are being brought online, eliminating the scramble for resources that characterized the past. The industry has entered a state of “tight balance”—lithium is in short supply but not to the extent that prices would double, and there is also not an overabundance that would lead to losses. Prices will likely hover between 150,000 and 200,000 yuan per ton. This new environment makes it impossible to profit easily from sudden price spikes, leaving those who rely on such fluctuations behind.
2. Different Profit Models for the Two Leading Companies
Although both companies are called “lithium giants,” their approaches are fundamentally different:
- Tianqi Lithium is a typical example of a company with a wealthy background in the industry. In the early years, it secured the rights to half of the production capacity of the world’s highest-quality lithium mine, Talison, in Australia. It doesn’t need to process the lithium itself and simply sells it to downstream companies, earning a profit margin. Its business is heavily dependent on the mine, with little technological complexity, meaning it reaps benefits when lithium prices rise and suffers when they fall.
- Ganfeng Lithium, on the other hand, is a company that has built its success through hard work. It diversifies its lithium resource acquisitions globally, avoiding reliance on any one country’s policies. It doesn’t limit itself to mining and lithium carbonate production; instead, it extends its operations into the downstream battery production sector, tapping into the entire lithium value chain from mining to battery manufacturing and installation in electric vehicles. This diversification reduces its dependence on lithium price fluctuations.
3. A Decade of Revenue Competition
The revenue growth of the two companies has been like a “tortoise and hare” race:
In the early years, their revenues were similar. During periods of soaring lithium prices, Tianqi would quickly outperform Ganfeng. For example, in 2022, when lithium prices skyrocketed, Ganfeng’s revenue advantage shrank to just 3%, nearly allowing Tianqi to overtake it. However, when prices dropped, Tianqi’s revenue plummeted significantly, while Ganfeng’s battery business provided a stabilizing effect, resulting in a smaller decline. By 2025, Ganfeng’s revenue was 23.1 billion yuan, compared to Tianqi’s 10.3 billion yuan—Ganfeng’s revenue was more than twice that of Tianqi’s. This gap continued in the first half of 2026, with Ganfeng earning nearly twice as much as Tianqi in that period.
4. Narrowing Profit Margins
Tianqi’s advantage of easy profit margins is fading:
Previously, Tianqi’s high profit margins were its strongest point. In 2022, it could sell lithium carbonate for over 400,000 yuan per ton, with a profit margin of 85%, meaning it made a 85% profit on each ton sold—much higher than the 56% profit margin of Ganfeng. Even during the 2023 price crash, Tianqi’s profit margin remained above 70% due to long-term contracts, while Ganfeng’s dropped to 13%. However, this advantage is now nearly gone. In the first half of 2026, Ganfeng’s gross profit was 92.3% of Tianqi’s, with only a 350-million-yuan difference in net profit. The reasons are straightforward: Ganfeng has reduced its own production costs, increasing its profit margin despite selling lithium at lower prices; its battery business maintains a stable profit margin of around 18%, providing a steady source of income. In contrast, Tianqi’s profits are closely tied to lithium prices, which are no longer rising significantly.
5. The Future Is Clear: “Hard Work” Will Eventually Overcome “Relying on Mines”
The industry environment has changed, and it is likely that Ganfeng will soon outperform Tianqi. There are three key reasons for this:
- Extreme price fluctuations are no longer likely, eliminating the conditions for easy profits from mining.
- Nationalism in the lithium industry is on the rise, with countries like Australia and South America imposing taxes and restricting production capacities on Chinese companies. Since Tianqi relies heavily on its Australian mine, any policy changes could be detrimental. Ganfeng’s diversified lithium resources across multiple countries give it greater resilience.
- Ganfeng’s investment in the battery business over the past decade is now paying off. It dominates the domestic market for batteries used in electric vehicles and battery swapping systems, with a 85% market share. Its semi-solid-state battery technology is also about to enter mass production, allowing it to benefit from the growing demand for new energy vehicles and energy storage. Tianqi, lacking such downstream capabilities, will be at a disadvantage.
*The above analysis is purely for industry insight and does not constitute any investment advice.*