Lithium Battery Consumption Tax Takes Effect: Battery Makers Lead Price Hikes, Second- and Third-Tier Manufacturers Under Pressure
nashnova research
China begins levying a 2% excise tax on lithium batteries from September 1, with EVE Energy and Lishen first to pass through costs; second- and third-tier makers with 3%–5% margins face survival pressure as an industry shakeout accelerates.
How does this tax work, and who pays?
After more than a decade of exemption, lithium batteries are subject to excise tax for the first time: 2% from September 1, 2026; rising to 4% from September 1, 2027.
The taxpayer is the battery manufacturer, assessed at the factory-gate stage. This means → the tax hits before the battery reaches any customer.
A critical detail: automakers buying third-party cells cannot deduct the excise tax already paid by the battery maker. In plain terms = the battery maker pays the tax, the automaker buys the cells, but that tax bill cannot offset the automaker's own taxes — it simply becomes a hard cost.
Who ultimately bears the burden?
EVE Energy and Lishen Battery issued price-adjustment notices first, adding 2% on top of pre-tax supply prices from September 1. Most second-tier and smaller makers chose private, one-on-one negotiations with automaker clients to share the burden.
Mo Ke, founder of ZhenLi Research, said battery makers and automakers will roughly split the cost 1% each under normal conditions — but leading cell makers take a harder line with smaller clients and "may refuse to absorb even 1%."
Liu Yanlong, secretary-general of the Global Energy Storage and Battery Council, judged that during the 2% phase battery makers must absorb most of the tax — existing long-term contracts are price-locked and an auto price war is raging. Once the rate hits 4%, the burden will split three ways among battery makers, automakers, and consumers, though only a sliver reaches the end buyer.
How much does each watt-hour cost extra?
Industry estimates: at a cell price of ¥0.4/Wh, the 2% rate adds roughly ¥0.008/Wh; the 4% rate adds about ¥0.016/Wh.
Converted, this is equivalent to lithium carbonate rising by ¥12,300/tonne (2% phase) and ¥24,600/tonne (4% phase).
The absolute increment looks small. But for razor-thin energy-storage margins and small cell makers, it is anything but trivial. This means → companies already running at 3%–5% net margin could tip from marginal profit straight into loss.
Why are second- and third-tier makers on the edge?
Mo Ke was blunt: energy-storage clients demand battery makers absorb the full 2% in negotiations; absorbing even 1% may push a cell maker into the red.
Leaders like CATL, BYD, and EVE Energy have higher margins, fuller capacity utilization, and diversified customers — most can pass through all or part of the 2% tax.
Smaller cell makers typically run underutilized lines, rely on a narrow customer base, and carry net margins of just 3%–5% — or are already loss-making. This reflects a deeper reality: the excise tax is a catalyst, not the disease — the shakeout started this year and will likely continue into next.
Which vehicles feel the most pressure?
Cui Dongshu, head of the CPCA's passenger-car division, estimated: at ¥400 per kWh, a 4% tax adds ¥16 per kWh — a car with a 50 kWh pack sees only a few hundred yuan in extra cost, not enough to halve EV profits across the board.
The hardest-hit segment is sub-¥100,000 budget BEVs — batteries account for a large share of vehicle cost and gross margins are paper-thin. Next in line are long-range BEVs with large externally sourced LFP packs.
Yet a reporter learned from one domestic automaker that some NEV models already earn only about ¥1,000 per car; a few hundred yuan in tax is not trivial at that level. Cui argued automakers need not raise sticker prices — modestly trimming existing promotions would offset the new cost.
Can automakers dodge the tax by making their own cells?
Xiaomi and Li Auto have both signaled progress on in-house battery R&D. Mo Ke argued this is more about pressuring cell suppliers than a genuine plan for mass self-production — automakers currently run 2%–5% net margins, well below leading battery makers, and the signal aims to force concessions in negotiations.
Liu Yanlong noted that only building a scaled cell production line and supplying packs internally avoids the taxable external-sale trigger; merely defining the cell spec and outsourcing manufacturing does not bypass the excise tax.
The policy left a buffer: sodium-ion and solid-state batteries remain exempt through the end of 2028. This means → tail-end cell makers without technological moats will gradually exit or be acquired, while tax-exempt chemistries accelerate into entry-level vehicles to offset the burden — and that may be the real direction of the industry's reshaping.
市场有风险，内容仅供研究参考，不构成投资建议。