China to levy consumption tax on Li-ion batteries Quick Note

研报英文原文证据摘录

China to levy consumption tax on Li-ion batteries Quick Note

Global Markets Research

19 July 2026China batteries

EQUITY: CAPITAL GOODS

China to levy consumption tax on Li-ion batteries Research Analysts

Global EV Batteries & Materials

Ethan Zhang - NIHKQuick Note ethan.zhang@nomura.com

+852 2252 2157

What happened?

On 17 July 2026, China’s Ministry of Finance, the General Administration of Customs, and

the State Taxation Administration announced adjustments to the consumption tax policies

on certain battery products (newslink). Key highlights include:

• Consumption taxes for mercury-free primary batteries, nickel-metal hydride batteries,

lithium primary batteries, lithium-ion batteries and all-vanadium redox flow batteries

will be levied at 2% starting from 1 September 2026 and at 4% starting from 1

September 2027.

• Consumption taxes for solar cells will be levied at 2% starting from 1 April 2027 and

4% starting from 1 April 2028.

• Certain products with new technology, including sodium-ion batteries, solid-state

batteries, fuel cells, as well as perovskite, tandem and gallium arsenide solar cells will

remain exempted from consumption taxes during the 1 September 2026 to 31

December 2028 period.

Our view

We believe the new consumption tax policy on lithium-ion batteries is not a big surprise to

the market, following the phasing out of other tax benefits for the EV and battery industry

(e.g., purchase tax exemption, export VAT refund) earlier this year. Assuming battery cell

price of CNY400/kWh, a consumption tax of 2% translates into additional cost of

approximately CNY7/kWh, we estimate. We expect battery cost per vehicle to increase by

CNY400-500, assuming battery size of 60kWh, which is relatively low compared with the

total EV manufacturing cost.