China · Crypto Briefing
China pauses approvals for battery storage manufacturing projects
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Beijing hits the brakes on new factory approvals as overcapacity concerns mount in the world's largest battery market.
Key facts
- On September 1, 2026, China reinstated a consumption tax of 2% on lithium-ion batteries
- New energy storage capacity commissioned in the first half of 2026 fell 18% compared to the same period a year earlier
- For battery manufacturers, the immediate consequence is straightforward: any company that had not yet secured approval for a new facility before September 7 is now waiting indefinitely
- Beijing hits the brakes on new factory approvals as overcapacity concerns mount in the world's largest battery market
Summary
China has temporarily suspended approvals for new battery storage manufacturing projects, a regulatory move that signals growing unease about runaway capacity growth in one of the country’s most strategically important industries. New energy storage capacity commissioned in the first half of 2026 fell 18% compared to the same period a year earlier. At the same time, solar manufacturers have muscled into the storage space, intensifying competition at precisely the moment when prices were already declining. The approval freeze is designed to give Beijing time to assess the gap between existing operational capacity and what is planned or under construction.