CATL anticipated that battery prices will maintain upward pressure throughout 2026 and could register further adjustments from January 1, 2027 , when China eliminates the remaining tax incentive applied to these products.
In an exclusive interview conducted during Future Energy Summit (FES) Guatemala 2026 , Ricardo Garro , Commercial Director for Latin America at CATL, explained that the market is facing both the rising cost of lithium and the progressive reduction of Chinese tax refunds.
The combination of both factors has already caused an increase of between $5 and $9 per kWh in the cost of the complete product , although the final evolution will depend on the price of raw materials and the efficiencies achieved by manufacturers.
WATCH THE FULL INTERVIEW HERE: https://www.youtube.com/watch?v=cG16hFoUyDA
“The evolution of storage technology over the past few years has consistently shown a trend toward cost improvements,” Garro stated. This decrease has strengthened the financial indicators of projects and accelerated the adoption of storage systems in various markets.
However, that downward trend began to face new challenges in recent months. “We’ve had several situations that have conspired, so to speak, to put upward pressure on costs,” the executive warned.
One of the main factors is the behavior of lithium carbonate in the spot market. According to Garro, the raw material went from values close to $10,000 per ton in October 2025 to approximately $25,000 , more than doubling in about six months.
“Lithium carbonate, which is how it is traded on the stock exchange, went —after a significant reduction that reached close to $10,000 per ton in October of last year— to be close to $25,000 today,” said the Commercial Director for Latin America at CATL.
The manufacturer anticipates that lithium prices could moderate somewhat during the remainder of 2026 , although they would remain considerably higher than those seen last year. This dynamic would maintain pressure on cells and integrated storage solutions.
China withdraws incentives and opens another front on costs
The second factor pointed out by CATL is the modification of the incentive scheme applied in China to products linked to renewable energies and, in particular, to batteries .
Until early 2026, these teams received a 9% tax rebate. The benefit dropped to 6% from April 1, 2026 , which meant the elimination of three percentage points of the incentive.
“Previously there was an incentive of a rebate —basically a refund of the tax on this product— of 9%, which was reduced to 6%,” Garro explained.
The timeline includes a second adjustment with a potentially greater impact. The remaining 6% will disappear on January 1, 2027 , thus completely eliminating the refund.
“The reality is that the remaining 6% will also be lost at the beginning of next year, on January 1, 2027,” the executive warned. “So, of course, we need to consider a 6% increase in cost,” he added.
The effect will not necessarily be automatically and fully passed on to customers. CATL is analyzing potential improvements in its industrial processes that could offset some of the increased costs, although there is still no certainty about the extent of those efficiencies.
“Since there are many variables involved, it’s not known exactly in what other aspects we could achieve better efficiencies in manufacturing that could compensate for this somewhat,” Garro stated.
Should these improvements prove insufficient, manufacturers may be forced to make further business adjustments during 2027. This scenario presents a challenge for projects structuring supply contracts, financing, and commissioning dates for the coming years.
The warning coincides with a period of strong expansion in energy storage in Central America. Despite pressure on battery costs, hybrid projects continue to achieve competitive results in long-term tenders , especially in Guatemala.
Guatemala confirms the competitiveness of solar with batteries
The PEG-5 tender awarded 1258 MW distributed across 57 projects , of which approximately 73% correspond to renewable technologies. Within this group, there was a significant participation of hybrid solar projects with storage.
The process reached an average single-unit price of $101 per MWh , below current contract values, according to additional information provided for this article.
For CATL, the result represents a regional signal because batteries competed within an open scheme, against technologies such as natural gas and hydroelectricity, without depending on a specific incentive to prevail.
“I think this is a turning point at the regional level where it is clear that, in an open competitive market with multiple technologies, the one that is winning today without incentives is solar plus battery,” Garro said.
Continue reading
The executive indicated that approximately 26 solar projects with storage were awarded , a volume higher than initially expected by several market participants.
“There were about 26 awarded solar plus battery projects, when initially not so many projects with storage were expected,” the CATL representative highlighted.
Competitiveness stems from the ability to combine the low variable cost of photovoltaic generation with the reliability and flexibility provided by batteries . This allows projects to shift energy, meet power requirements, and improve their delivery profile.
“The numbers already show that we can compete against natural gas, hydroelectric projects, and other technologies that people usually want to consider because they think it's the cheapest option,” Garro said.
Guatemala also approved the terms of Open Tender 1-2026 , aimed at covering approximately 300 MW of remaining capacity from the PEG-5 project and new needs related to increased demand. The main distributors would contract for power and energy starting in August 2026.
During FES Guatemala, energy authorities also anticipated the continuation of generation and transmission processes. The government proposed moving forward with a new contract for approximately 300 MW of firm power , while the National Electric Energy Commission placed grid expansion among the priorities for integrating the awarded capacity.
The lack of a specific regulatory framework had previously limited the integration of large-scale energy storage in the country. However, PEG-5 demonstrated that batteries can be integrated through long-term contracts and compete as part of hybrid generation projects .
In other regional markets, such as El Salvador and Honduras, developers are already evaluating solar installations with systems lasting four, five, and even six hours.
“I believe that we will increasingly see projects that do not need incentives, that due to their cost and competitiveness will be the first option for integrating the new generation,” Garro predicted.
CATL and HyperStrong open the industrial stage of sodium ion
In parallel with the expansion of lithium iron phosphate, CATL is moving forward with HyperStrong on an agreement for 60 GWh of sodium-ion batteries , a scale that the manufacturer interprets as the start of a mass production phase and not as a pilot test.
According to Garro, the volume is equivalent to half of the supply capacity registered by CATL during 2025 , reflecting the industrial scale of the contract.
“This capability is no longer a new product, it’s not a pilot project, it’s a mature product entering a mass production phase,” the executive stated.
CATL would have solved four of the main technical problems that prevented the mass commercialization of this chemical, including problems related to stability and degradation.
The technology offers better performance in low temperatures, greater thermal tolerance, and a lifespan that could reach 15,000 cycles while retaining up to 80% of the capacity , according to the characteristics presented by the interviewee.
Another potential advantage is the availability of the raw material. The abundance of sodium could significantly reduce costs once the industry achieves sufficient economies of scale.
“At 15,000 cycles, it can maintain up to 80% of its capacity,” Garro explained. Furthermore, the executive emphasized that “there is talk that a sodium cell could cost significantly less than an LFP.”
However, the first commercial versions still have higher costs than lithium iron phosphate . They also have a lower energy density, so they require more surface area or a greater number of containers to achieve the same capacity.
“As of today, since these are the first iterations, it is still a bit more expensive than the LFP,” acknowledged the CATL representative.
The technology is also not immediately available as a large-scale, integrated solution. CATL already has the cell and will begin incorporating it into complete systems and containers, but Garro placed its significant deployment in the medium term.
For this reason, Central American projects scheduled to begin operations between 2027 and 2029 would continue to primarily use lithium iron phosphate batteries . Bankability, operational track record, cost, and the need to mitigate technological risks support this position.
“I would think that the LFP will continue to be the main option: the most mature, the one with the best costs and the most manageable,” Garro concluded.
Sodium would not completely replace lithium iron phosphate. Both chemistries would coexist and serve different applications , while industrial development, cost reduction, and improved energy density determine the market share each will occupy.
“We are not at the point where it will completely displace the LFP. They will work together, they will coexist, one will not replace the other,” summarized the Commercial Director for Latin America at CATL.