The countdown is on for the implementation of the new consumption tax policy on lithium batteries. On July 17, the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration issued Announcement No. 20 of 2026, which stipulates that from September 1, a 2% consumption tax will be levied on mercury-free primary batteries, nickel-metal hydride batteries, lithium primary batteries, lithium-ion batteries, and all-vanadium flow batteries.

As the levy date approaches, multiple domestic battery manufacturers have issued price adjustment notices, initiating the process of passing the consumption tax cost down the supply chain. According to the announcement, the consumption tax collection point is set at the battery ex-factory stage, with battery manufacturers serving as the taxpayers. Exported batteries qualify for a "tax first, refund later" policy. Meanwhile, new technology battery routes such as sodium-ion batteries, solid-state batteries, and fuel cells are exempt from the consumption tax until December 31, 2028.

Since the new policy was announced, the industry chain has been engaged in intense negotiations over how to allocate the 2% new tax burden and how to settle orders. Several companies have taken the lead in clearly announcing their price adjustment plans. In late July, EVE Energy Co., Ltd., China's fifth-largest battery producer, issued a "Price Adjustment Notice for Passing on Consumption Tax Costs," becoming one of the first battery companies to publicly respond to the new consumption tax policy. The notice indicates that starting September 1, the company and its subsidiaries will add a 2% consumption tax on top of the original tax-exclusive supply prices for domestic battery product sales. For export products, the tax will be calculated at the ex-factory stage, with tax refunds applied after customs declaration. Framework orders that have been signed but not yet delivered will also follow the new pricing rules. The price adjustment reportedly covers the company's consumer batteries, power batteries, and energy storage battery products across multiple categories.

On August 18, consumer battery manufacturer Lishen Battery (Suzhou) Co., Ltd. issued a "Customer Notice on Lithium-ion Battery Consumption Tax Cost Adjustment," specifying that starting September 1, an additional 2% consumption tax and related surcharges will be added to the original tax-exclusive supply prices. Orders shipped before 24:00 on August 25 will maintain original pricing, while orders shipped, reconciled, and invoiced after that date will be settled under the new policy, which the company describes as a policy-driven cost change.

According to industry insiders, under the rules, any goods leaving the factory and invoiced after September 1 will trigger the consumption tax obligation. As a result, late August has seen a window-period effect with companies rushing shipments and invoicing. Some downstream customers are accelerating order confirmations and advancing deliveries to avoid the additional tax costs. Securities institutions predict that in the short term, battery manufacturers may see production schedules surge, and once the new policy officially takes effect, the industry chain will undergo a round of price restructuring.

"The consumption tax is paid by the manufacturer, but the cost can be allocated through negotiation in commercial contracts," said an industry analyst. Leading companies with ample order books have stronger ability to pass costs downstream, while smaller and mid-sized battery manufacturers may see their profit margins squeezed. This could accelerate industry consolidation and force companies to optimize their product structures by developing tax-exempt new technology routes such as sodium-ion batteries and solid-state batteries.

With less than a week remaining before the September 1 levy takes effect, downstream sectors including power batteries, energy storage, and consumer batteries are evaluating the cost impact of the new policy. Whether terminal products such as vehicles and energy storage systems will see chain-reaction price changes remains to be observed in the market.