China has temporarily halted approvals for new battery manufacturing projects aimed at the energy storage sector, according to a report by Chinese financial news outlet Cailianshe, as authorities review production capacity across the industry.
The review is reportedly focused on existing and planned energy storage manufacturing capacity, particularly battery cell production. The move comes amid growing concerns over excess capacity in the sector, despite strong demand for batteries used for grid balancing and backup power.
According to sources cited by Cailianshe, energy storage projects that have not yet started construction will remain on hold for the time being. Projects already under construction, however, are not expected to be affected. The policy could also be revised following the completion of the capacity review.
Rising Overcapacity Concerns
China is the world’s largest producer of batteries for energy storage, with the industry expanding rapidly alongside the country’s growth in renewable energy.
However, manufacturers are facing increasing pressure from intense competition and declining prices. Similar challenges have affected other major Chinese manufacturing sectors, including solar panels and electric vehicles.
China’s solar manufacturers have increasingly entered the battery energy storage market as declining profits and excess capacity in the solar panel industry push companies to seek new areas of growth. China Moves to Rationalise Battery Industry, the latest move is part of broader efforts by Chinese
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