CCM: Li-ion battery exempted from consumption tax in China 09-05-2016

On 27 Jan., 2015, the MOF notified that consumption tax will be levied on some batteries, excluding Li-ion battery. This policy will have an impact on the development of Chinese battery market and promote the popularity of Li-ion battery in China.


 


On 27 Jan., 2015, the Ministry of Finance of the People’s Republic of China (MOF) issued the Notice to Levy Consumption Tax on Batteries and Coatings. From 1 Feb., 2015, consumption tax will be levied on batteries and coatings. Procedures including production, consigned processing and import will be taxed, at a rate of 4%.

 

It is noteworthy that the consumption tax is not targeted at all batteries. Mercury-free battery, Ni-MH battery, lithium primary battery, Li-ion battery, solar cell, fuel cell and vanadium redox flow battery (VRB) are exempted from the taxation. Lead-acid battery will be exempted before 31 Dec., 2015, and be taxed (4%) from 1 Jan., 2016.

 

In a long term, the consumption tax policy issued will have an impact on the development of Chinese battery market. Also, it will promote the popularity of Li-ion battery in China and propel lead-acid battery enterprises to transform and upgrade.

 

Batteries exempted from consumption tax are energy-saving and environmental-friendly batteries. The government is leading the battery industry to develop in line with the concept of energy saving and environmental protection. Lead-acid battery, in comparison with energy saving and environmental-friendly battery, generates heavy pollution. Specifically it is disadvantaged in energy density, service life, etc.

 

Regarding application, vehicle start-stop system will be a breakthrough for Li-ion battery. At present, absorbed glass mat (AGM) lead-acid battery is commonly used in vehicle start-stop system in Chinese vehicle market. Domestic enterprises have not yet launched any Li-ion batteries applied in this field. However, technology is maturing. In January 2015, foreign enterprises, Johnson Controls, Inc. and Toshiba Corporation jointly released lithium titanate (LTO) battery for start-stop system.


 


In comparison with lead-acid battery, Li-ion battery boasts remarkable advantages, such as longer cycle life, higher power density and higher-rate charging and discharging. Now the price of Li-ion battery is higher than that of lead-acid battery. The implementation of the consumption tax policy will weaken the price advantage of lead-acid battery, and furthermore create opportunities for Li-ion battery to penetrate into lead-acid battery market.

 

Insiders of lead-acid battery industry revealed that consumption tax levied will negatively influence lead-acid battery enterprises. Under such a circumstance, lead-acid battery enterprises may develop Li-ion battery instead.


About CCM:

CCM is the leading market intelligence provider for China’s agriculture, chemicals, food & ingredients and life science markets. Founded in 2001, CCM offers a range of data and content solutions, from price and trade data to industry newsletters and customized market research reports. Our clients include Monsanto, DuPont, Shell, Bayer, and Syngenta. CCM is a brand of Kcomber Inc.

 

For more information about CCM, please visit www.cnchemicals.com or get in touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.



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