China's 2% lithium-ion battery tax is back. Sodium-ion is not on the bill.

On 1 September 2026 China began collecting a 2% consumption tax on lithium-ion batteries again. The statutory rate has been 4% since February 2015. Lithium-ion cells were among the technologies carved out of it, along with lithium primary cells, nickel-metal hydride, fuel cells, solar cells and vanadium-flow batteries. Announcement 2026 No. 20, issued in July by the Ministry of Finance, the General Administration of Customs and the State Taxation Administration, puts part of that list back on the bill and leaves the newer chemistries off it.

Lithium-ion batteries, lithium primary batteries, nickel-metal hydride, mercury-free primary cells and vanadium-flow batteries pay 2% from 1 September 2026 and 4% from 1 September 2027. Sodium-ion, solid-state and fuel cells stay exempt through the end of 2028. The exemption is conditional. The product has to meet a national standard, and the filing has to rest on a test report from a laboratory accredited under China Metrology Accreditation, the CMA mark those reports carry. pv magazine, reporting the same policy on 1 September, adds a boundary the announcement’s exemption list does not spell out in those words: a clarification from the State Taxation Administration on 27 August 2026 says semi-solid batteries do not qualify as solid-state.

The charge falls on lithium-ion batteries as a product. Photovoltaic cells join later, at 2% from 1 April 2027 and 4% from 1 April 2028, with a temporary exemption for specified newer types, perovskite, tandem and gallium-arsenide among them.

Shanghai Metals Market, cited by pv magazine, put the 2% addition at about 0.00648 yuan per watt-hour, from a cell price of 0.324 yuan per watt-hour, before the boundary was clarified. Across 60 kWh that rate is about 389 yuan. The pack figure is the multiplication. SMM said the result would depend on where the tax stopped.

Huatai Securities, also via pv magazine, assumed a storage-battery price around 0.40 yuan per watt-hour and full pass-through: about 0.008 yuan per watt-hour at 2% and 0.016 at 4%, or 480 yuan and 960 yuan on 60 kWh. Huatai called the storage-cost impact manageable, with stronger suppliers better placed to pass it on. CarNewsChina, cited by Automotive World on 1 October, estimates about 438 yuan (65 dollars) on a 60 kWh pack, and 876 yuan at 4%.

pv magazine reports the authority’s boundary. Lithium-ion cells, packs and battery clusters are taxable. A complete storage system that also includes electrical equipment, thermal management, fire protection and controls counts as power equipment and is not charged another consumption tax. Tax already paid on inputs can be deducted when those batteries go into another taxable battery, and batteries exported directly stay exempt, with tax already paid on purchased batteries refundable.

The value-added-tax rebate is a separate instrument. pv magazine records it falling from 9% to 6% in April and ending on 1 January 2027. Automotive World describes export rebates for electric-vehicle batteries on that same path. A direct export can still escape this consumption tax while the VAT rebate shrinks.

EVE Energy told customers that domestic lithium battery products delivered from 1 September would carry an additional 2% cost. Automotive World says EVE plans to pass the tax on in full. Lishen issued a similar notice in August. CATL raised the listed price of its 314 Ah storage cell from 0.414 yuan per watt-hour to 0.423 yuan on 1 August. Two percent of 0.414 is about 0.008 yuan. The listed move was 0.009 yuan, posted a month before the tax took effect, and pv magazine notes that market supply sat alongside the tax in recent cell-price increases.

An executive at CATL, quoted by Nikkei and carried in Automotive World, said: “The changes are a competitive advantage for the top competitors.” Huatai described the exemptions as a policy tilt toward emerging technologies. Sodium-ion and solid-state avoid a tax lithium-ion pays, through 2028, if they show the standard and the report. Semi-solid cells, on the August clarification, do not qualify as solid-state.

Automotive World sets the battery tax beside a larger withdrawal. The new-energy-vehicle purchase tax, waived from 2014 through 2025, has been 5% since January with relief capped at 15,000 yuan (2,235 dollars on the magazine’s conversion) and returns to the full 10% in January 2028. Vehicle and vessel tax breaks for plug-in hybrids, range extenders and some commercial types expire that month, the magazine says. It also reports domestic new-energy-vehicle sales down 10% in the first half and BYD’s home sales down 30% this year, set against a 48% share of Chinese new-vehicle sales in 2025, from 5% in 2020. Those sales figures are Automotive World’s.

Lithium prices moved much further than a 2% pack tax can explain, and the sources already say so. Automotive World reports lithium carbonate futures in Guangzhou down 25% in September, from around 160,000 yuan a tonne to less than 120,000, and pairs that drop with a halt on new battery-project construction and an inventory survey that found larger stockpiles than expected. Adam Megginson, principal lithium price analyst at Benchmark Mineral Intelligence, told Bloomberg, as quoted by Automotive World: “There is a mounting sense of doubt that the consumption momentum can hold up to the end of the year sufficiently to absorb the strong cell production we have seen recently.”

Ignacio Mehech, chief executive of CleanTech Lithium, disagrees: “There’s no market fundamental behind it, and it should reverse in the short term because analysts continue to see a deficit in the coming years.” Automotive World’s own reading is that a tax under 70 dollars a car cannot account for a drop of that size.