China has temporarily suspended approvals for new battery energy storage manufacturing facilities. Chinese financial news outlet Cailianshe reported the move, citing industry sources. According to the report, projects involving battery cell production are particularly affected.
The decision comes as authorities review existing and planned manufacturing capacity. According to the report, the review reflects growing concerns about overcapacity in China’s energy storage market. At the same time, demand for batteries used for grid balancing and backup power continues to grow.
Construction Status Determines Which Battery Projects Are Affected
According to sources cited by Cailianshe, projects that have not yet broken ground cannot move forward for the time being. Manufacturing facilities already under construction are not expected to be affected. The policy could be adjusted at a later date.
China is the world’s largest manufacturer of batteries for energy storage. The domestic industry has expanded rapidly in recent years alongside the growth of renewable energy. Leading Chinese solar manufacturers have also expanded into battery energy storage. According to the report, declining profits and overcapacity in the solar market are driving this shift. However, rapid expansion is increasing competitive pressure. Manufacturers face falling prices and growing production capacity.
