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Reported by China Energy Storage Network: Effective August 1, 2026, numerous companies across the battery industry chain have announced price hikes of 10%–30% on their full product portfolios, including power quality equipment, charging and swapping infrastructure, storage and microgrid systems, and residential energy storage solutions.
The price increases have rapidly spread from lithium iron phosphate (LFP) cathode materials and battery cells to power supplies, power conversion systems (PCS), charging piles, solar-storage-charging integrated systems, and comprehensive energy storage equipment.
Within just twenty days, a sweeping price surge has taken shape across the upstream and downstream segments of the energy storage industry chain. However, what truly merits attention is not merely the magnitude of the price increases, but the fact that—after years of extreme price competition—the energy storage sector is now fundamentally reassessing its cost structures, profit margins, and risk exposure.
A review of recent corporate price adjustment notices reveals that this round of price hikes is driven by two primary factors: first, cost pass-through from rising raw material and core component prices driven by market forces; and second, statutory cost transmission resulting from changes in excise tax policy. These two mechanisms are mutually reinforcing, channeling cost pressures from upstream materials downstream to battery cells, PCS, charging and swapping equipment, system integration, and ultimately to project bids.
At present, price adjustments across several industry segments—particularly PCS, charging piles, solar-storage-charging systems, and storage equipment—share a common cause: sustained increases in upstream procurement costs.
While product types vary, cost structures exhibit strong commonalities. Copper, aluminum, silver, and tin are widely used in cables, structural components, connectors, and magnetic devices; PCBs, IGBTs, power semiconductors, memory chips, relays, and circuit breakers are core components of PCS, charging modules, and electrical equipment for energy storage. Once these materials and components experience concentrated price increases, equipment manufacturers face an immediate rise in production costs.
Multiple companies have stated in their price adjustment notices that they have already absorbed earlier cost pressures through centralized procurement, supply chain optimization, efficiency improvements, and cost controls since the beginning of the year. However, the current round of increases—both in magnitude and scope—has exceeded their internal capacity to absorb.
Hunan Yuneng’s price adjustment further indicates that cost pressures are propagating further upstream. On July 16, Hunan Yuneng announced a uniform price increase of RMB 2,000 per ton on its full range of LFP cathode materials, effective August 1, citing rising prices of core raw materials such as phosphoric acid, sulfur, and ferrous sulfate, alongside sustained tightness in high-end production capacity.
Thus, this round of price increases has formed two market-driven cost channels: one driven by rising resource and chemical raw material prices, pushing up costs for cathode materials and battery cells; the other driven by rising metal and electronic component prices, pushing up costs for PCS, charging and swapping equipment, and storage devices. Ultimately, both channels converge at the level of energy storage system integration and project quotation.
Unlike the aforementioned companies, EVE Energy’s price adjustment was directly triggered by changes in battery excise tax policy. On July 16, the Ministry of Finance, the General Administration of Customs, and the State Taxation Administration jointly issued an announcement clarifying that, effective September 1, 2026, primary lithium batteries, lithium-ion batteries, and all-vanadium flow batteries would be subject to an excise tax at a rate of 2%, with the rate increasing to 4% effective September 1, 2027.
On July 24, EVE Energy issued a price adjustment notice, announcing that, effective September 1, domestically sold products would have an additional 2% excise tax cost added to the original tax-exclusive supply price. This new pricing applies to orders shipped, invoiced, or settled on or after September 1, including framework orders already executed but not yet delivered. This signals that the excise tax is no longer merely a new cost item on corporate balance sheets, but has begun to be incorporated into actual quotations, contracts, and settlement systems.
Unlike raw material prices, excise tax is a statutory levy that cannot simply be offset through procurement cost reductions or efficiency gains. Enterprises must reallocate the burden among absorbing it internally, pressuring upstream suppliers, and passing it downstream. EVE Energy’s decision to add 2% upfront provides the industry with a first reference model for tax pass-through.
On the surface, the price adjustments by cathode material manufacturers, PCS suppliers, and battery makers appear as discrete events. However, for system integrators and project developers, all these costs ultimately converge on the same procurement list.
Clearly, this round of price increases is not a localized fluctuation in any single material, but a simultaneous rise across multiple core cost items for energy storage systems. The industry is moving from isolated price hikes toward a systemic cost reassessment.
Based on current mainstream LFP energy storage cell costs of approximately RMB 0.4–0.5 per Wh, a 2% excise tax corresponds to an additional cost of roughly RMB 0.007–0.008 per Wh. For a 100 MWh energy storage project, the additional tax on the battery segment alone amounts to approximately RMB 700,000–800,000. When the tax rate rises to 4% in 2027, that figure will double.
However, the long-term impact of the excise tax cannot be measured solely in terms of a few pennies per Wh. In 2015, batteries were first included in the excise tax scope at a rate of 4%, but primary lithium batteries, lithium-ion batteries, solar cells, fuel cells, and all-vanadium flow batteries were granted tax exemptions. At that time, China’s lithium battery industry was still in a rapid incubation phase, and policy priorities focused on encouraging technological application and industrial expansion.
More than a decade later, China has established the world’s largest lithium battery industry chain. Lithium-ion batteries have evolved from a nascent product requiring support to the dominant technology in new energy vehicles and grid-scale energy storage.
Against this backdrop, the shift from tax exemption to phased taxation reflects a policy recalibration: as lithium-ion batteries have matured and scaled, they are gradually being brought back into the tax net, while emerging technology pathways such as sodium-ion batteries, solid-state batteries, and fuel cells continue to receive temporary tax relief. This is not a simple withdrawal of support, but rather a reorientation of policy focus from blanket support for mature products toward encouraging technological upgrades and differentiated innovation.
The policy sends a clear signal to the industry: lithium batteries have entered a mature phase, and companies can no longer rely on long-term policy exemptions and cutthroat pricing to expand market share. Instead, they must establish normal tax-bearing mechanisms, reasonable profit margins, and more disciplined competitive practices.
Following the policy announcement, a view emerged in the market that vehicle manufacturers and energy storage companies with in-house battery production capabilities could avoid the excise tax through “self-production for self-use.” However, this interpretation is inaccurate.
The policy explicitly states that batteries produced and self-used by taxpayers are only exempt from excise tax if they are further used in the production of other taxable battery products. If they are used for non-taxable battery products or other purposes, the tax must be declared and paid at the time of transfer.
Meanwhile, enterprises that purchase or import batteries on which excise tax has already been paid, and use them in the further production of taxable battery products, may deduct the tax already paid based on the quantity consumed in production.
Thus, while cells used in the production of modules, battery packs, and other taxable battery products may qualify for non-duplication or deduction mechanisms, the further use of battery packs in vehicles, energy storage systems, or other non-battery products does not automatically qualify for exemption.
The policy primarily addresses the issue of duplicate taxation within the battery industry chain, rather than granting blanket tax exemptions to all vertically integrated enterprises. This means that going forward, companies will need to carefully re-examine product classifications, production processes, internal transfers, invoicing nodes, and cost-accounting boundaries. For enterprises operating multiple technology roadmaps, shared production lines, or both domestic and export businesses, tax compliance capability will become a new competitive variable.
The imposition of the excise tax will directly raise the tax-inclusive factory cost of lithium-ion batteries, but the final price of energy storage systems will not mechanically increase by 2%. On one hand, batteries are only one component of a complete energy storage system, which also includes PCS, BMS, EMS, thermal management, fire suppression, enclosures, electrical equipment, and integration services. The tax impact, when spread across the entire system, will be diluted to some extent. On the other hand, whether the full incremental cost can be passed downstream depends on the bargaining power among battery manufacturers, system integrators, project developers, and end-users.
EVE Energy’s decision to add the tax directly to its original tax-exclusive price represents a leading player’s attempt to establish a clear tax pass-through mechanism. However, for battery manufacturers with weaker bargaining positions, or those already bound by fixed-price long-term agreements, the excise tax may not be fully passed through. Some of the burden may be absorbed by battery companies, some passed to system integrators, and some offset through adjustments in services, payment terms, or pricing of other equipment.
The greatest pressure may fall on small- and medium-sized system integrators in the middle of the supply chain. On one side, cells, PCS, and electrical equipment are all seeing broad price increases; on the other, state-owned enterprise tenders for energy storage still exert strong pricing constraints. These integrators lack both the scale to pressure upstream suppliers and the bargaining power to pass costs downstream to project owners. In such a context, their only options are to walk away from low-margin orders, raise system quotations, or further compress their own profits.
In past years, some storage projects sustained superficial returns based on extremely low equipment prices, but those low prices often came with reduced safety margins, limited warranty coverage, and inadequate after-sales support. With the combination of excise tax and upstream cost increases, such business models will become increasingly unsustainable.
In the first half of 2026, domestic energy storage prices and demand moved upward in tandem. According to the CESA Energy Storage Application Branch industry database, a total of 1,660 new tenders for energy storage projects were announced in January–June 2026, representing an aggregate scale of 141.19 GW / 517.58 GWh in capacity terms, with year-over-year growth of 184.77% in capacity. Compared to the same period last year, monthly tender growth rates in H1 2026 all exceeded 100%. This indicates that the current price recovery is not driven purely by supply constraints, but by a combination of rising demand and escalating costs.
However, rising prices do not automatically translate into improved corporate profitability. In the utility-scale storage market, growing demand has provided battery and PCS manufacturers with some basis for price increases. Yet because upstream materials and components have risen even more steeply, many companies’ price adjustments can only moderate margin erosion, rather than deliver meaningful profit recovery.
Commercial and industrial (C&I) energy storage faces even greater transmission pressure. Previously, some C&I PCS and system quotations had already been compressed to relatively low levels, and project returns depend heavily on peak-to-valley tariff spreads, utilization rates, and financing costs. If equipment cost increases cannot be absorbed through technical optimization and operational efficiency gains, some projects that were already marginal may be delayed or shelved.
This also means that the procurement logic for energy storage projects must evolve. In the past, owners focused primarily on initial equipment prices; going forward, greater emphasis must be placed on cycle life, capacity degradation, system availability, safety performance, long-term warranty, and after-sales maintenance.
A rise in equipment prices does not necessarily mean a deterioration in project economics. If a higher price corresponds to more cycles, lower degradation, more reliable usable capacity, and better service, the levelized cost of storage (LCOS) over the full project life may actually decline.
In essence, the real question is not whether energy storage equipment can command higher prices, but whether, after the price increase, manufacturers can deliver product value commensurate with those prices.
Following the implementation of the excise tax, profits across the energy storage industry chain will undergo a new round of redistribution.
First, the bargaining power of battery manufacturers will further diverge. Leading players with scale procurement capabilities, stable customer bases, high capacity utilization, and mature overseas channels will find it easier to incorporate the new tax into their contract and quotation frameworks. Smaller players, in contrast, may be forced to absorb part of the tax themselves to retain orders.
Second, system integrators will place greater emphasis on supply chain management. In an environment where material prices, component costs, and tax liabilities fluctuate simultaneously, the strategy of relying on short-term low-price procurement for cost advantages becomes riskier. Lock-in agreements, price-adjustment clauses, long-term supply contracts, and risk-sharing mechanisms will gain renewed importance.
Third, project bidding rules will need to adapt. If tenders continue to use the lowest quoted price as the primary evaluation criterion, suppliers will be compelled to compress margins, reduce configurations, or lower service standards to cope with rising costs—ultimately shifting risk back to project owners and the power system. In the future, energy storage tenders should assign greater weight to technical performance, safety capabilities, long-term warranty, operations and maintenance (O&M) services, and operational track records, while also incorporating adjustment mechanisms for raw material price changes and statutory tax variations.
Fourth, emerging technology pathways will gain a relative advantage. Under the current policy framework, sodium-ion batteries, solid-state batteries, and fuel cells continue to be exempt from excise tax until the end of 2028, providing them with a temporary policy window.
That said, this does not mean sodium-ion or solid-state batteries will immediately displace LFP at scale. Their commercialization still depends on cycle life, safety, production capacity, equipment compatibility, and project track records. The excise tax primarily narrows the cost gap between emerging technologies and mature lithium-ion chemistries at the margin, buying time for technology validation and scaled deployment.
In the short term, the excise tax increases corporate costs and exerts pressure on the returns of some energy storage projects. Some of these costs will be passed on to end users, potentially prompting renegotiations, delays, or even cancellations of certain new projects. However, over the long term, the policy may mark a watershed moment, transitioning the energy storage industry from scale-driven competition to quality-driven competition.
Over the past several years, the energy storage sector has expanded rapidly, but price competition has also given rise to a host of issues: system quotations repeatedly breaching cost floors; some companies securing orders with low bids but lacking capacity for long-term warranty and after-sales support; projects emphasizing initial capital expenditure over life-cycle returns; and corporate research and development (R&D), safety buffers, and quality controls being squeezed. The reintroduction of the excise tax on lithium batteries will compel the entire energy storage value chain to revisit a fundamental question: What, ultimately, should a safe, reliable, and durable energy storage system—capable of stable operation for more than a decade—actually be worth?
For the energy storage industry, therefore, the excise tax policy represents both a cost stress test and a pivotal opportunity to accelerate the transformation of its development model. Only when high-quality products can command fair prices, technological innovation is consistently rewarded, and safety and service costs are fully accounted for, can the energy storage industry truly transition from a scale- and price-driven emerging sector to a mature, high-quality industry with rational pricing, sustainable profitability, and long-term responsibility. This is the deeper positive significance embedded in the excise tax policy.
In summary, the current price increases across the battery industry and energy storage systems remain within a reasonable range and are not expected to escalate sharply due to supply-demand imbalances.
As a leading Chinese manufacturer of residential and commercial and industrial (C&I) energy storage solutions, Lingtech has maintained the lowest possible price adjustments, ensuring that our customers are not significantly impacted. Lingtech leverages its advanced manufacturing capabilities and state-of-the-art enterprise management systems to effectively contain cost increases. The company is dedicated to providing customized small- and medium-sized energy storage systems for residential households and C&I applications, with over 100 projects successfully delivered across Europe and Southeast Asia. Lingtech looks forward to partnering with EPC contractors, business owners, installers, investors, end-users, and consultancy firms.
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Residential Storage Batteries: 5 kWh, 10 kWh, 15 kWh, 16 kWh, 20 kWh, 25 kWh, 30 kWh, 40 kWh, 50 kWh
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These products enjoy strong market demand across Europe, Africa, Southeast Asia, and South America. With over 20 years of manufacturing experience in the industry, Lingtech is your trusted partner for reliable, high-performance energy storage solutions.
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