China introduced new export restrictions on key EV battery technologies, effective immediately on September 10, 2026.
China has imposed immediate export controls on advanced lithium-ion batteries and artificial graphite anode materials, a move that reshapes global supply chains for electric vehicles and energy storage systems from 10 September 2026.
The restrictions target high-performance batteries with energy density of 300 watt-hours per kilogram or more and the specialised equipment used to manufacture them. They also cover graphite anodes with compaction density above 2.5 grams per cubic centimetre, a critical component in nearly all lithium-ion cells. The delivered cost of every battery inside the new rules will rise because exporters must now obtain a pre-issued export licence and pay a 6 % value-added tax that was previously rebated.
It comes after China removed the same rebate for photovoltaic products in April and signalled the end of all battery rebates by January 2027. The combined measures tighten Beijing’s grip on the midstream of the battery supply chain, where it already refines 95 % of the world’s graphite and produces 85 % of cathode materials.
The licence that every shipment must carry
Exporters must apply to the Ministry of Commerce for a licence before they can ship any controlled item. The application must list the dual-use item control number and declare that the goods are not diverted to military end-users. Customs will not release the shipment during any period of questioning, and false declarations can trigger a permanent ban on future exports1.
Before any controlled shipment leaves China
The ministry said in a statement that the controls are “an international practice” and not a prohibition. It has already approved licences for several South Korean manufacturers, but the approval process remains opaque: the documents do not specify how long a review will take or what criteria will be used2.
What the rules leave open is how the quota will be allocated. The notification does not set a tonnage cap, so the effective ceiling is the number of licences the ministry chooses to issue. At current export volumes—roughly 120,000 tonnes of artificial graphite anodes in 2025—the licence requirement alone could delay or block up to a third of global shipments3.
The products that are now caught
The directive covers three groups of goods. First, rechargeable lithium-ion batteries with energy density of 300 Wh/kg or above, including both cells and battery packs (HS 8507.60.00). Second, six types of manufacturing equipment: winding machines, stacking machines, electrolyte filling machines, hot presses, formation systems and capacity sorting cabinets (HS 8479.89.99). Third, the technology used to produce the controlled batteries1.
What the directive covers
Graphite anodes are caught if their compaction density exceeds 2.5 g/cm³. The ministry also controls the liquid-phase coating technology used to improve anode performance. Together, these two items account for about 40 % of the cost of a lithium-ion cell and are almost entirely sourced from China1.
The old regime placed the same battery in several categories at once, creating redundant paperwork. The new list is harmonised across the region and removes the overlap, but it still leaves exporters with the burden of identifying which of their products now require a licence.
Who pays the new tax and the compliance bill
The 6 % VAT that was previously rebated now falls on the exporter. For a battery that sells for $100, the tax adds $6 to the invoice. Because the rebate is being phased out entirely by January 2027, the delivered cost of every battery outside China will rise again when the tax jumps to the full 13 % rate4.
The cost stack on every controlled battery
| Component | Cost | Charged on |
|---|---|---|
| Lost VAT rebate, now | 6% | Export value, paid by the exporter |
| Lost VAT rebate, from 1 Jan 2027 | 13% | Full rate, once the rebate ends |
| Licence application fee | $200 – $500 | Per application, if charged — not yet confirmed |
| Broker and port time | Uncapped | Review period not limited by the ministry |
On top of the tax, exporters must pay for the licence application, the customs broker and the additional time the shipment spends in port. The ministry has not said whether it will charge a fee for the licence, but similar schemes in other sectors typically cost between $200 and $500 per application.
The compliance burden lands hardest on small and medium-sized firms that lack in-house trade teams. They must now train staff to classify products, file applications and track licence expiry dates. Larger manufacturers can spread the cost across higher volumes, but even they face delays: the ministry’s review period is not capped, so a licence could take weeks or months to arrive.
The timeline that importers must watch
The controls took effect on 10 September 2026, the day the notification was published. Any shipment that left China before that date is grandfathered; everything after must carry the new licence1.
The dates that bind
The VAT rebate for batteries falls to 6 % on 1 April 2026 and disappears entirely on 1 January 2027. Photovoltaic products lost their rebate on 1 April 2026, so the battery timeline mirrors the earlier solar measure4.
The ministry said it will review the controls annually, but the documents do not set a date for the first review. Importers should expect the rules to remain in place for at least two years, given that the rare-earth controls introduced in 2023 are still in force5.
What the controls signal—and what they do not change
The measures are small enough that the effect on regional prices will be marginal. China exported 1.2 million tonnes of lithium-ion batteries in 2025, and the controlled items account for less than 10 % of that volume. The real signal is Beijing’s willingness to use export controls as a tool of industrial policy, not just national security.
China’s share of the midstream, %
Coming eleven months after the rare-earth controls, the notification tells importers that China is prepared to tighten the spigot on any segment of the battery supply chain where it holds a dominant position. The next target could be cathode materials or electrolyte salts, both of which China also refines at scale.
What the controls do not change is China’s dominance in the midstream. The country still produces 80 % of the world’s battery cells and 95 % of its graphite anodes. The new rules simply ensure that every tonne of those materials carries a licence and a tax, raising the delivered cost for every importer outside China.
Sources
- ↩ 2025 Export Control Requirements for Lithium Batteries and Artificial Graphite Anode Materials https://www.mofcom.gov.cn/zwgk/zcfb/art/2025/art_79646f0161564975a938fe00fee158d5.html
- ↩ Ministry of Commerce of the People’s Republic of China http://english.mofcom.gov.cn/News/PressConference/art/2024/art_7e1282d1fc37494aaa51bc84bb9b8014.html
- ↩ Here’s where the U.S. is behind China on battery technology https://www.cnbc.com/2026/09/08/heres-where-the-us-is-behind-china-on-battery-technology.html
- ↩ China to Cancel or Reduce Export Tax Rebates for PV and Battery Products http://english.scio.gov.cn/pressroom/2026-01/12/content_118274454.html
- ↩ Export Control on Medium and Heavy Rare Earth Items Announced by MOFCOM and CAIC (2025) https://english.mofcom.gov.cn/Policies/AnnouncementsOrders/art/2025/art_0dd87cbee7b045bf93fabe6ab2faceee.html