China Battery Tax Policy Update 2026

China Adjusts Battery Consumption Tax Policy Starting from 2026

China’s Ministry of Finance has announced adjustments to the consumption tax policy for selected battery products. The new policy will gradually introduce consumption tax on several battery categories, including lithium-ion batteries, nickel-metal hydride batteries, lithium primary batteries, and vanadium flow batteries.

The policy will take effect in stages from 2026, with further tax adjustments planned through 2028.

New Consumption Tax Rates for Battery Products

According to the latest policy:

• From September 1, 2026, a 2% consumption tax will be applied to:
  • Mercury-free primary batteries
  • Nickel-metal hydride (NiMH) rechargeable batteries
  • Lithium primary batteries
  • Lithium-ion rechargeable batteries
  • Vanadium flow batteries
• From September 1, 2027, the consumption tax rate for the above battery products will increase to 4%.

In addition, photovoltaic cells (solar cells) will also be subject to consumption tax:

• From April 1, 2027, photovoltaic cells will be taxed at 2%
• From April 1, 2028, the rate will increase to 4%

Exemptions for Emerging Energy Technologies

To encourage innovation and the development of next-generation energy technologies, China will provide temporary exemptions for several emerging battery technologies.

From September 1, 2026, to December 31, 2028, consumption tax exemptions will apply to:

• Sodium-ion batteries
• Solid-state batteries
• Fuel cells
• Perovskite solar cells
• Tandem solar cells
• Gallium arsenide solar cells

Potential Impact on the Battery Industry

This policy adjustment reflects China’s efforts to improve energy efficiency, promote sustainable development, and support advanced battery technologies.

For traditional rechargeable battery products, including lithium-ion batteries and NiMH batteries, the introduction of consumption tax may have an impact on manufacturing costs and supply chain pricing.

However, emerging technologies such as sodium-ion batteries and solid-state batteries will receive policy support through tax exemptions, which may accelerate their commercialization and market adoption.

For international buyers, understanding China’s battery policy changes can help with future sourcing strategies, cost planning, and technology selection.

What This Means for Global Battery Buyers

China remains one of the world’s largest battery manufacturing hubs, supplying lithium-ion cells, LiFePO4 batteries, battery packs, and customized energy storage solutions to global markets.

Companies sourcing batteries from China may need to consider:

• Future cost changes for lithium-ion battery products
• Long-term supply chain planning
• Emerging battery technology opportunities
• Supplier capability and compliance requirements

LNC Battery continues to monitor global battery industry developments and provide reliable battery cell and custom battery pack solutions for international customers.