On September 1, 2026, an 11-year exemption from the lithium battery consumption tax officially ended. Lithium primary cells and lithium-ion batteries are now subject to a 2 percent consumption tax, with the rate scheduled to rise to 4 percent on September 1, 2027.
Industry estimates suggest that for a 150,000-yuan pure electric vehicle, the tax burden will increase by approximately 1,200 to 2,400 yuan. EVE Energy became one of the first major battery makers to adjust its pricing.
The resumption of the lithium battery tax is part of a phased withdrawal of incentives for new energy vehicles. China's vehicle purchase tax exemption was reduced from full exemption to a 50 percent reduction at the start of the year, with a per-vehicle cap of 15,000 yuan. In July, three departments jointly announced that fuel-efficient and new energy vehicle ship tax incentives will phase out from 2027.
Despite the policy changes, NEV sales continued to break records in August. Analysts described the transition as a shift toward "equal rights for gasoline and electric vehicles" and noted that the industry is entering a market-driven competition phase.
Source: China Economic Net / Tencent News
