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China's battery industry is entering a new phase of policy adjustment. According to the announcementreleased by China's Ministry of Finance, General Administration of Customs and State TaxationAdministration, a 2% consumption tax will be levied on lithium-ion rechargeable batteries startingSeptember 1, 2026. The tax rate is planned to rise to 4% from September 1, 2027.
What the New Policy Means
The new consumption tax applies to lithium-ionrechargeable batteries used in a wide range ofapplications, including energy storage systems,electric vehicles and industrial equipment.
This move comes at the same time that China hasadjusted the export VAT rebate policy for batteryproducts. From April 1 to December 31, 2026, theexport VAT rebate rate is reduced from 9% to 6%,and the rebate will be cancelled from January 1,2027.
These policy changes are likely to have a broader impact across the battery supply chain. While the actual cost impact will vary from one manufacturer to another, companies will need to consider both the additional consumption tax and the reduction in export rebates when calculating costs and setting prices.
For solar companies, distributors and energy storage developers, keeping a close eye on battery prices and procurement schedules will be increasingly important as the new policy takes effect.
China remains the world's largest lithium battery manufacturing base. Policy changes will continue to shape the global energy storage market. Staying informed helps buyers and partners make better decisions and build more competitive projects.
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