China urges battery makers to avoid excess capacity growth
Focus on improving product quality and protecting intellectual property instead, say government agencies
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[BEIJING] China summoned the country’s leading battery makers for the second time in a little more than three months, reinforcing a call to restrict capacity expansion – and avoid the price wars that have damaged other renewable-energy industries in the past.
Several government agencies, including the Ministry of Industry and Information Technology, called on 16 manufacturers of electric vehicles and stationary batteries to step up efforts to improve product quality and safeguard intellectual property, as well as control growth.
The companies should “thoroughly understand the significance and urgency” of resisting unreasonable and improper competitive behaviour, the ministry said after the meeting on Thursday (Apr 9).
Promotional activities by local governments to attract investment in the sector should also be regulated, it said.
Battery makers’ shares surged on Friday.
Industry giant Contemporary Amperex Technology jumped as much as 7.4 per cent on the mainland and 7 per cent in Hong Kong in the afternoon session, while Gotion High-tech and Shenzhen Xinyuren Technology rallied by their respective daily limits.
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The latest gathering appeared to take a stricter tone than a similar meeting in January and comes at a critical time for China’s battery industry.
Producers – particularly those involved in energy storage – have largely delivered a strong performance over the past year, as the global energy transition drives demand at home and abroad.
More recently, fossil-fuel supply disruptions from the war in the Middle East have made energy security a more urgent issue for import-dependent nations.
War-related demand is already supporting profits for some Chinese battery makers, while others have announced capacity expansions to capitalise on surging demand.
However, the pattern has raised concerns in Beijing.
This is due in part to the parallels with the solar industry’s post-2021 cycle, when surging demand triggered a wave of investment that ultimately led to oversupply and collapsing prices, consultancy Trivium China said.
Intense competition is already weighing on the performance of some companies.
Sungrow Power Supply, one of the world’s top energy-storage system providers, attributed its lower-than-expected profit for 2025 to the pressures that such challenges have put on its margins. BLOOMBERG
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