China will resume an excise tax on power batteries in stages starting from September 1, 2026, according to announcements by the Ministry of Finance and the State Taxation Administration reported by Chinese media in late August.
Under the policy, lithium-ion batteries will be subject to a 2% excise tax from September 1, 2026, rising to 4% from September 1, 2027. In contrast, sodium-ion batteries, solid-state batteries and fuel-cell batteries will remain exempt until the end of 2028 to encourage development of next-generation technologies.
Industry analysts say the move reflects a principle of "oil-electric tax parity," as new energy vehicles gradually bear a similar tax burden to conventional fuel vehicles. Because batteries account for a significant share of NEV costs, the phased implementation gives manufacturers a buffer to adjust supply chains and pricing while continuing to support emerging battery chemistries.
Image: Electric bicycle charging station, a typical battery-charging scene. Source: Wikimedia Commons (CC BY-SA 3.0).
