China to reinstate battery tax as support moves to new tech

China will reinstate a consumption tax on mature battery technologies, including lithium-ion batteries, while exempting emerging alternatives such as solid-state and sodium-ion batteries, reports Caixin.

The Ministry of Finance, the General Administration of Customs and the State Taxation Administration announced the adjustment on Friday. Starting Sept 1, mercury-free primary batteries, nickel-metal hydride batteries, lithium primary batteries, lithium-ion batteries and vanadium redox flow batteries will be subject to a 2% consumption tax. The rate will rise to the standard 4% on Sept 1, 2027.

The overhaul marks a strategic shift by Beijing as it pulls back policy support from an oversupplied lithium battery sector plagued by intense competition and redirects incentives toward next-generation power sources.