Battery markets face falling revenues and lithium price drops

The energy storage and battery markets are facing downward pressure on profitability and prices due to increased capacity and shifting supply dynamics. In Australia, BloombergNEF reports that battery arbitrage spreads plummeted by 84% year-on-year in the second quarter of 2026. This decline is attributed to rising renewable energy generation and increased battery discharge during peak evening periods, which has driven average electricity prices down by 40% to 65% across the National Electricity Market (NEM).

Simultaneously, the lithium supply chain is experiencing price corrections. According to InfoLink, battery-grade lithium carbonate prices fell by 10.3% month-on-month. This trend is driven by expectations of a long-term supply recovery, with forecasts suggesting a slight market surplus by 2027. The falling cost of lithium has also contributed to a decrease in the price of lithium iron phosphate (LFP) energy storage cells.