Author name: Cornelius Karow

China will introduce a consumption tax on lithium-ion batteries starting in September 2026, ending a tax exemption that has been in place since 2015. According to China’s Ministry of Finance, lithium-ion batteries will initially be subject to a 2% consumption tax. The rate will increase to 4% in September 2027. At the same time, sodium-ion batteries, solid-state batteries, and fuel cells will remain exempt from the consumption tax through the end of 2028. Tax Incentives Shift Toward Newer Battery Technologies In addition to lithium-ion batteries, the new consumption tax will also apply to lithium primary batteries, mercury-free primary batteries, nickel-metal hydride batteries, and vanadium redox flow batteries. While these products will gradually become subject to the tax, sodium-ion batteries and solid-state batteries will remain exempt between September 2026 and the end of 2028. The policy ends an 11-year exemption for lithium-ion batteries. The planned 4% tax rate matches the rate that has applied to other battery categories since 2015. According to the Chinese authorities, battery products must comply with applicable national standards. Companies will also be required to submit compliance test reports when applying for tax exemptions for the first time. Industrial Policy Adjustment According to the state-run news agency Xinhua, China says the policy changes are intended to support industrial upgrading and environmental protection. Reuters also noted that Chinese policymakers have been seeking to curb excess production capacity, including in the battery industry. The tax changes follow other adjustments to tax incentives for alternative-energy vehicles and indicate a gradual reduction in government tax support for parts of the battery sector. Sources:https://www.reuters.com/legal/transactional/china-levy-consumption-tax-on-lithium-ion-batteries-solar-cells-2026-07-17/https://cnevpost.com/2026/07/17/china-to-impose-consumption-tax-lithium-batteries/

Starting in 2027, Chinese battery manufacturer CATL and Dutch energy infrastructure company Alfen plan to deploy sodium-ion battery energy storage systems with a total capacity of 5 GWh in the Netherlands and other Western European countries. According to the companies, these will be the first installations of the “Tener Sodium” energy storage system in the European market. In late June, CATL introduced the storage system, describing it as a field-validated sodium-ion solution for stationary energy storage. Initial deliveries in China are scheduled to begin in September. CATL expects total shipments to reach 1 GWh by the end of 2026, with global commercial deliveries planned to begin in June 2027. Validation in the European Power Grid CATL claims that the system is designed for a 25-year service life and delivers nearly 2% higher round-trip efficiency than current technology. Each system has a storage capacity of more than 30 MWh and can be configured for storage durations ranging from one to eight hours, depending on project requirements. CATL also states that the system is compatible with lithium iron phosphate (LFP) batteries. This enables Alfen to utilize various battery chemistries and mitigate its vulnerability to fluctuations in lithium prices. CATL intends to leverage the partnership to gain experience with sodium-ion batteries in European power grids and adapt the technology to European grid requirements. Sources:https://alfen.com/en-de/news/alfen-and-catl-reach-5-gwh-sodium-ion-battery-storage-partnership-in-europehttps://cnevpost.com/2026/07/16/catl-sodium-battery-storage-europe-alfen-deal/

The U.S. joint venture between Hyundai Motor Group and SK On has started series production of battery cells. According to The Atlanta Journal-Constitution, Hyundai SK Battery Manufacturing America began mass production in June. The battery cells are being delivered to the Hyundai Motor Group’s “Metaplant America”, where electric vehicles for the U.S. market are manufactured. The battery joint venture was established in 2023. Hyundai and SK On invested a combined $5 billion in the site. The state of Georgia supported the project with $641 million in tax incentives and other financial assistance. Annual Capacity of 35 Gigawatt-Hours Planned The plant site covers approximately 3 million square meters. Around 3,500 people work at the facility. Once production is fully ramped up, annual capacity is expected to reach 35 gigawatt-hours. However, manufacturing is currently still in the early stages. The battery cells are expected to be assembled into battery packs by Hyundai Mobis. These packs are intended for electric vehicles manufactured in the United States by the Hyundai, Kia, and Genesis brands. Georgia Expands Its Battery Industry The new plant adds to Korean battery production in Georgia. SK Battery America already operates facilities for vehicle batteries and components in the state. Hyundai and LG Energy Solution are building another battery plant near the Metaplant. Construction was delayed when U.S. immigration authorities detained numerous Korean workers at the site. Source:https://www.koreaherald.com/article/10809681

Four German industry associations are calling for stronger political support to establish a competitive battery industry. KLiB, VCI, VDMA, and ZVEI point to shortcomings in scaling and the transition from research to industrial mass production. The statement was released in conjunction with the topping-out ceremony for the Fraunhofer Research Institution for Battery Cell Production on July 13, 2026. According to the associations, Germany has the necessary research expertise, specialized companies, and substantial industrial demand. Nevertheless, companies often struggle to enter the market. Associations Criticize Insufficient Conditions for Scaling The associations identify structural disadvantages at the national level and inadequate conditions for ramping up production as the main problems. Research results alone do not automatically lead to industrial value creation. They are therefore calling for more targeted industrial policy instruments. These measures should be more closely aligned with the needs of emerging industries. Without suitable conditions, expertise, patents, and production capacity could shift to other regions of the world. The support announced in the government’s program for economic growth and employment must now be defined in concrete terms. Battery Dependence Affects Multiple Industries According to the associations, global battery demand has increased by an average of 43 percent per year over the past five years. Batteries are used in electric mobility, energy supply, data centers, rail technology, robotics, space applications, and other sectors. The associations therefore warn of growing dependence on suppliers outside Europe. They see particular risks for critical infrastructure and defense technology. They believe that strengthening European battery production would bolster supply chains and reduce technological dependence. Source:https://klib-org.de/pressemitteilung-klib-vci-vdma-zvei/

The Japanese automotive supplier AESC has begun mass producing its large-format 46120 cylindrical cells. These battery cells are intended to power several models from the BMW Group based on its “New Class” platform. AESC cites the all-electric BMW iX5 as the first model to use these cells. The cells have a diameter of 46 millimeters and a height of 120 millimeters. According to AESC, this increases the usable energy per cell by nearly 30 percent compared to earlier formats. The reduced number of components in the battery pack is also expected to simplify system integration. This gives vehicle manufacturers more flexibility in integrating the battery into the vehicle. Cell Chemistry for Large Electric SUVs AESC is positioning the 46120 cell format primarily for premium electric vehicles and larger SUV models. The cells use a high-nickel cathode and a silicon-doped anode. The energy density is specified at up to 310 Wh/kg. Mass production is set to take place using state-of-the-art manufacturing facilities. Production lines are reportedly equipped with more than 1,000 CCD inspection points. Additionally, each cell undergoes X-ray testing to detect foreign objects. According to the company, a magnetically mounted, high-speed transfer and positioning system enables dimensional accuracy of up to 0.01 millimeters. Source:https://www.aesc-group.com/newsInfo?id=AESC+Starts+Mass+Production+of+46120+Large+Cylindrical+Batteries+to+Support+BMW+Group%E2%80%99s+Neue+Klasse+Platform