China’s finance ministry announces end to domestic lithium ion tax exemption, with likely boost for sodium ion

On 17 July, China’s finance ministry announced legislation ending eleven years of tax exemptions for the lithium ion battery industry. This is an effort to curtail overcapacity in the industry that is also likely to offer its growing sodium ion battery industry a comparative boost, as it will retain these exemptions. From 1 September 2026, a 2% consumption tax will be levied on lithium ion batteries, as well as all-vanadium redox flow and nickel-metal hydride batteries. From 1 September 2027, the rate will rise again to 4%.