“While some orders have fluctuated and certain orders have seen volume reductions, the company has also tapped into new demand,” Lin Jiubiao, chief technology officer for domestic energy storage solutions at CATL, said at a company event on Sunday. “The overall business for this year remains unchanged and the impact so far appears relatively small,” he added.

China imposed a 2% levy on lithium-ion batteries, used in electric vehicles and energy storage systems, from Sept 1, which rises to 4% on the same date in 2027. Beijing announced in July that it would end a decade-long exemption for solar and lithium-ion batteries from consumption taxes, as part of efforts to rein in intense competition in industries central to the clean-energy transition.

After the July announcement, some customers began taking delivery of batteries ahead of schedule in anticipation of the tax, according to Lin. Unlike the EV battery business, energy-storage projects often have fixed budgets and financing approvals, “making it difficult to pass on additional costs,” he said in Ningde, where CATL is headquartered.

Lin said the company’s energy storage output was in line with expectations for the year so far, with production-line utilisation above 90%. He attributed this to an investment boom in domestic standalone energy storage projects and early deliveries of overseas orders due to export tax rebate changes, which are keeping capacity high for the fourth quarter.

China’s energy-storage sector has developed rapidly over the past few years, boosted by surging demand both at home and abroad. While global demand is expected to maintain strong growth next year, Lin said domestic demand will be harder to predict.

“We’re seeing that returns on energy storage projects in many provinces are now declining, and investment in many projects is being paused or postponed. So there may be some fluctuations next year,” he added.

Uploaded by Liza Shireen Koshy