Today, many industries are experiencing steady growth, and lithium‑ion battery electrolytes are no exception. The sector is currently at a peak of development, attracting strong interest from investors. As the core component of electric‑drive systems, lithium batteries account for 50% to 70% of total powertrain costs. However, the recent rush to expand production capacity has given rise to numerous issues similar to those in the photovoltaic industry. According to media reports, the government will continue its subsidies for new‑energy vehicles this year, with both the scope and level of support set to increase. In response to current energy and environmental challenges—and given the limited effectiveness of previous subsidy policies—there remains a pressing need to maintain these incentives. Consequently, the subsidy program will be extended, and the original 25 demonstration cities will be further expanded; eligibility for subsidies will no longer be restricted to these designated areas. Faced with such favorable policy signals, even established lithium‑battery manufacturers have shown a tendency toward blind investment, as each player seeks to secure survival over the next decade. Under these circumstances, companies must choose between exiting the market or pursuing much larger‑scale expansion. On the innovation front, most investors tend to flock to the latest generation of materials, while very few allocate resources to developing next‑generation technologies. Meanwhile, the industry suffers from substantial overcapacity coupled with low‑end technological capabilities—a major challenge confronting China’s lithium‑battery sector today. To avoid simply replicating outdated, low‑end technologies, it will require not only sound planning and prudent regulation by government and industry bodies but also measured decision‑making by individual firms.