[SMM Analysis: New Battery Consumption Tax Policy Takes Effect: Sodium-Ion Batteries Exempt, Lithium Batteries Taxed, Sodium-Ion Batteries Enter a "Tax Exemption Dividend Period"] SMM, July 21: The Ministry of Finance, the General Administration of Customs, and the State Taxation Administration recently jointly issued an announcement on the adjustment of the battery consumption tax policy. For the first time, lithium-ion batteries and similar products are included in the scope of consumption tax collection, while sodium-ion batteries, solid-state batteries, fuel cells, and others are listed in the exemption catalog. This "tax-and-exempt" design has garnered widespread attention across the sodium-ion battery industry chain...

On July 16, the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration jointly issued Announcement No. 20 of 2026, introducing systemic adjustments to the consumption tax policy on certain batteries. This marks the most significant policy revision since the establishment of the battery consumption tax framework in 2015, covering key categories such as lithium-ion batteries, solar cells, sodium-ion batteries, and solid-state batteries. Through a combined mechanism of “tiered tax rates + targeted exemptions + standards-based access,” it addresses the dual objectives of tax regulation and industrial guidance. 1. Lithium-Ion Batteries to Be Taxed First: 2% from September, Rising to 4% in September Next Year According to the announcement, starting September 1, 2026, conventional battery categories such as lithium-ion batteries will be subject to a 2% consumption tax rate, which will be raised to 4% from September 1, 2027. Lithium-ion batteries are the category most broadly affected by the new rules, with power batteries accounting for the vast majority of their shipments. Assuming an average battery cell price of 0.5 yuan/Wh and annual shipments of 1,000 GWh, a 2% tax rate translates to an additional annual tax burden of approximately 10 billion yuan at the cell level. At present, gross margins of power battery cell enterprises are generally compressed to around 10% or even lower, making this cost increase significant. In terms of pass-through, top-tier players, leveraging economies of scale and stronger bargaining power, are expected to pass on part of the tax burden to downstream automakers. However, second- and third-tier enterprises have limited room to negotiate, so their profit margins may come under further pressure, potentially intensifying industry divergence. After the tax rate rises to 4% in 2027, cost pressure will be significantly magnified, likely accelerating the rationalization of inefficient capacity. 2. Targeted Tax Exemptions for Frontier Technologies: Sodium-Ion and Solid-State Batteries Enjoy a “Policy Window” The announcement specifies that from September 1, 2026 to December 31, 2028, sodium-ion batteries, solid-state batteries, fuel cells, as well as perovskite, tandem, and gallium arsenide solar cells in the PV sector will be exempt from consumption tax. This arrangement directly targets frontier technology pathways that have not yet been industrialized on a large scale but hold strategic significance: Sodium-ion batteries are at a critical stage of transitioning from demonstration applications to large-scale mass production. The exemption will effectively lower the initial comprehensive production costs, narrow the cost gap with lithium-ion batteries, and accelerate their penetration in applications such as low-speed vehicles. Solid-state batteries, as the core direction for next-generation power batteries, remain in the R&D and small-batch trial production stage transitioning from semi-solid to all-solid-state. The tax exemption helps reduce trial-and-error costs and accelerate industrialization. The core logic is: tax mature technologies, and exempt frontier technologies from tax. Exempting frontier technologies that are still in the early stages of industrialization reflects a policy orientation of “using tax supplements from mature technologies to support frontier technologies, enabling them to move forward with less burden,” thereby guiding capital and resources toward technological iteration. In the short term, at the initial stage of the lithium battery consumption tax, cost side, battery cell enterprises will be under pressure and will manage by raising prices or optimizing their product mix. This cost increase is particularly erosive to the profits of second- and third-tier enterprises, and some marginal capacity may face break-even pressure. In terms of production scheduling pace, ahead of the September 1 start date, battery cell manufacturers may exhibit an “installation rush” effect involving concentrated shipments and advance stockpiling, potentially driving August production figures sharply higher in the short term, while September production schedules will face a phased pullback. In terms of price pass-through, top-tier players still have some cushion for negotiation, but smaller cell makers will face greater resistance in passing the tax burden to automakers and will need to absorb most of the costs themselves. In terms of product mix, production scheduling priorities for low-margin categories may be passively downgraded, accelerating the industry reshuffle. In the long term, after the tax rate rises to 4%, industry-wide cost pressure will be significantly magnified. Combined with the scheduled expiration of the tax exemption window for frontier technologies at the end of 2028, whether sodium-ion and solid-state batteries can achieve cost reductions at scale by then will become a critical factor in determining their competitiveness. The policy sends a very clear signal: the state’s regulatory logic for the battery industry is shifting from “universal support” to “differentiated guidance,” with technology leaders reaping greater policy dividends.

On July 16, SVOLT Energy Technology held its 2026 Global Partner Summit in Changzhou, Jiangsu Province, where it unveiled four major "killer moves": the fully upgraded SVOLT Short Blade 3, the hybrid solid-liquid battery ready for launch, a dual push into energy storage and emerging markets, and the within-year mass production of Fly Stacking 4 — cementing its role as a trailblazer from the "stacking era".

[July 2026 Lithium Battery Recycling Project Commissioning Summary] In July 2026, China experienced a concentrated window for commissioning lithium battery recycling projects. Multiple leading and regionally distinctive enterprises intensively commissioned new production lines, while multiple approaches—including hydrometallurgy, pyrometallurgy, cross-border dismantling, and second-life applications—were simultaneously deployed. New compliant processing capacity expanded significantly, and the industry officially entered the large-scale implementation stage. Details of the key commissioning enterprises and projects are as follows:

On July 16, the China Automotive Battery Industry Innovation Alliance released monthly data on power batteries for June 2026. China’s combined sales of power and energy storage batteries reached 196.0 GWh in June, rising 7.6% month-on-month and 49.1% year-on-year. Power battery sales stood at 133.4 GWh, accounting for 68.1% of total sales, up 5.0% month-on-month and 41.8% year-on-year. Energy storage battery sales hit 62.6 GWh, making up 31.9% of the total, with a 13.4% month-on-month increase and a 67.5% year-on-year surge. From January to June, cumulative sales of power and energy storage batteries nationwide totaled 979.4 GWh, growing 48.6% year-on-year. Cumulative power battery sales reached 661.3 GWh (67.5% of the aggregate), climbing 36.2% year-on-year. Cumulative energy storage battery sales were 318.1 GWh (32.5% of the aggregate), jumping 83.4% year-on-year.

[SMM Lithium Battery Electrolyte Market Weekly Review: Electrolyte Prices Stayed Stable This Week (2026.7.13-7.16)] From July 13 to 16, 2026, electrolyte prices stayed stable. The future market price trend of electrolyte still requires continuous tracking of raw material price fluctuations and their transmission.

Recently, CATL's official WeChat account reported that the company has signed a strategic cooperation framework agreement with Luzhou Public Transport Group. The two parties will strengthen cooperation in areas such as cascade recycling and utilization of retired batteries, aftermarket Ningjia services, implementation of vehicle-to-grid (V2G) technology, and expansion of logistics and passenger-carrying scenarios in the low-altitude economy. In Luzhou, Sichuan, 877 new energy buses are already equipped with CATL power batteries. After retirement, these batteries will continue to contribute by being repurposed for low-speed electric vehicles, energy storage backup, or precious metal resource extraction and reuse, depending on their remaining capacity. This helps urban public transportation achieve a complete closed loop from green travel to zero-carbon recycling.

[SMM Analysis] In H1 2026, the core conflict in the LFP cathode material market was not just a simple shift in the supply-demand relationship, but rather a profound tussle involving the top-down transmission of cost pressure and the reshaping of the benefit distribution pattern across the industry chain.

[7.13 Morning Meeting Summary] The Ukrainian military destroyed 12 Russian oil tankers and one oil terminal. It is reported that Putin rejected calls for peace talks, and the situation may escalate in the coming months. The most-traded SHFE nickel 2609 contract consolidated at highs in the morning session, closing at 128,370 yuan/mt by the end of the morning session, up 1.10%. Macro sentiment has improved, and nickel prices have rebounded recently. The price range for nickel is expected to remain at 125,000-135,000 yuan/mt in the near future.

Production-wise, China's cumulative production of lithium battery separators from January to June was approximately 17.416 billion m², of which wet-process separators accounted for 15.005 billion m², or 86.16%, and dry-process separators accounted for 2.411 billion m², or 13.84%.