China will phase in new consumption-tax treatment for photovoltaic cells and several established battery chemistries, while temporarily exempting a group of advanced battery and solar-cell technologies through the end of 2028.
Key facts
- Mercury-free primary batteries, nickel-metal hydride batteries, lithium primary batteries, lithium-ion batteries and all-vanadium redox-flow batteries will be taxed at 2% from September 2026 and 4% from September 2027.
- Photovoltaic cells will face a 2% tax from April 2027, rising to 4% from April 2028.
- Sodium-ion batteries, solid-state batteries and fuel cells will remain temporarily exempt through December 2028.
- Advanced PV technologies including perovskite, tandem and gallium arsenide cells are also included in the temporary exemption.
- The change applies within China's consumption-tax system to relevant domestic production and imports.
Why it matters
The policy creates different cost paths for mature and emerging technologies. Conventional lithium-ion batteries and mainstream crystalline-silicon cells will gradually absorb an additional tax burden, while newer chemistries and advanced cell architectures receive a temporary runway for commercialization.
For manufacturers, the immediate impact will depend on product type, contract structure, margins and the timing of implementation. The phased schedule gives companies time to adjust pricing and supply arrangements, but it may still influence domestic procurement and investment decisions. Export markets should also watch how producers allocate capacity and account for tax costs in their wider operations.
The exemptions are equally significant. Perovskite and tandem cells are being developed to move beyond the efficiency limits of conventional products, while sodium-ion and solid-state batteries are attracting investment as possible complements to lithium-ion. Temporary relief signals that policymakers want tax design to support industrial upgrading rather than treat every technology identically.
Sources
- State Council Information Office / Xinhua summary - July 20, 2026
- China Ministry of Commerce policy notice - July 2026
- pv magazine industry analysis - July 17, 2026
SolarXList summary based on publicly available government and industry sources checked on July 22, 2026.