Mainland China phases out battery export VAT rebates: Impact on materials, cells and global supply chains

Scrapping the VAT export rebate on select battery cathode materials and finished cells appears to be a multi-pronged effort by mainland China to balance its global ambitions in battery industry with overcapacity challenges and geopolitical tussles

Mainland China's battery industry, the world's manufacturing powerhouse supplying over 80% of global lithium-ion capacity, faces a seismic policy shift with the January announcement to phase out export value-added tax rebates. Issued jointly by the Ministry of Finance and State Taxation Administration, the policy slashes rebates for both cathode materials and finished cells.