The Chinese government will phase out the export tax rebate policy for lithium batteries. It will do so in two stages.
Stage 1: Initial Reduction (Effective December 1, 2024)
The government will cut the VAT export tax rebate rate for lithium batteries from 13% to 9%.
Stage 2: Further Reduction and Final Elimination
- Transition Period (April 1, 2026 – December 31, 2026)
The government will lower the rebate rate further from 9% to 6%.
- Complete Elimination (From January 1, 2027)
The government will fully remove the VAT export tax rebate for battery products, including lithium batteries.
The government aims to curb fierce low-price competition, often called “involution,” in the new energy industry. It also wants to ease international trade friction risks. Finally, it seeks to guide enterprises toward high-quality development through technological innovation and brand building.
During the policy transition period, companies will rush exports. They want to lock in higher tax rebate rates. However, the rebate rate reduction will immediately raise export costs. This will accelerate industry consolidation. It will also push product prices higher.
