Beijing has temporarily suspended approvals for new battery storage manufacturing projects, specifically targeting factories for battery cell production. According to Cailianshe, the freeze began on September 7, 2026. Projects that have not yet started construction are frozen, while those already under construction may continue.
The move comes as new energy storage capacity commissioned in the first half of 2026 decreased by 18% compared to the same period in 2025. This decline followed the relaxation of mandatory co-location rules that previously required renewable energy projects to include on-site storage, reducing guaranteed demand.
Market competition has intensified as solar manufacturers entered the storage sector during a period of falling prices. The regulatory pause allows the government to evaluate the gap between current operational capacity and planned or ongoing projects.
Additionally, on September 1, 2026, China reintroduced a 2% consumption tax on lithium-ion batteries. This tax rate is expected to increase to 4% by September 2027. Despite the freeze, demand for batteries used in grid balancing and backup power remains growing.
