The tax refund policy has been cancelled, forcing the photovoltaic and lithium battery industries to undergo a rapid reshuffle.
On January 9th, the Ministry of Finance and the State Taxation Administration issued an announcement regarding the adjustment of export tax rebate policies for certain products, which caused a huge stir.
"Starting from April 1, 2026, the export tax rebates for photovoltaic products and lithium batteries (such as lithium hexafluorophosphate, cobalt oxide, and ternary cathode materials) will be abolished. The tax rebates for lithium battery finished products will be phased out and will be completely abolished as of January 1, 2027. This means that the export costs will significantly increase and profits will be under pressure, having a profound impact on the industry. Relevant enterprises are expected to rush to declare customs before April 1, 2026, in order to enjoy the last tax rebate benefits." On January 12, Li Zhongyang, the executive deputy secretary of the Guangdong Battery Industry Association, said.
It is known that currently, China's photovoltaic industry accounts for 80% to 90% of the global production capacity. Its output and installed capacity have remained the world's top for over 10 consecutive years. However, behind this prosperity, structural contradictions are prominent - a large amount of capital has flooded in, coupled with subsidy policy support, many small enterprises have flocked in, resulting in disorderly expansion of production capacity. By the end of 2024, the production capacity of the main photovoltaic industry chain in China has exceeded 1200 gigawatts. However, the global demand in 2025 is only about 580 gigawatts. The lithium battery sector is also experiencing continuous turmoil. Recently, the State Taxation Administration announced cases of tax evasion and fraud in the lithium battery-related fields. Jiangxi Nan Shi Lithium Battery New Materials Co., Ltd. fraudulently enjoyed tax benefits and falsely issued invoices to defraud export tax rebates; 11 enterprises in Shenzhen, such as Daowei New Energy Technology Co., Ltd., exported "lead-acid batteries" under the name of "lithium batteries" that were not eligible for tax rebates, and defrauded the country of 149 million yuan in export tax rebates.
The cancellation of tax rebates is a measure of precise policy implementation. China's photovoltaic and battery industries have strong global competitiveness and large export volumes, and no longer need tax rebates and subsidies. In the face of the objective situation of low-price internal competition in the industry, reducing tax rebates can alleviate trade frictions, guide enterprises to carry out technological transformation and product innovation, and will promote the industry to move from "low-price competition" to "value competition", gradually upgrading from a global factory to an innovation leader. Zhou Bo, the general manager of the Research Center of the Power Battery Application Branch of the China Chemical and Physical Power Sources Industry Association, said.
Lithium batteries involve products related to the fluorine chemical industry chain such as lithium hexafluorophosphate and trichloroethylene. After the policy is implemented, the industry will bid farewell to the tax rebate benefits and the long-term reliance on export cost support. According to statistics from Fluorine Online, in 2025, China's production of lithium hexafluorophosphate will be approximately 249,000 tons, and the total export volume will be about 18,000 tons, accounting for approximately 7% of the production; in the same year, the production of trichloroethylene is expected to be about 260,000 tons, and the export volume will be about 40,000 tons, accounting for approximately 15%. This adjustment did not include materials related to lithium iron phosphate, mainly because its tariff code belongs to inorganic chemicals. This long-term implementation of a zero export rebate rate also reflects the targeted nature of the policy adjustment.
"The policies are beneficial for leading enterprises, which will enhance industry concentration, prevent low-price competition in the market, and force the industry to eliminate outdated production capacity. Leading enterprises with advanced technology, strong cost control capabilities, and a well-developed global layout are likely to benefit in the medium to long term," said a staff member from the securities department of Longi Green Energy. According to the data, the company's revenue from overseas in the photovoltaic business exceeded 12 billion yuan, accounting for approximately 40% of the total revenue.
However, some enterprises have taken the opposite approach, sending out cautious signals that are different from the previous large-scale expansion. On January 5th, Tianzhi Materials issued a notice stating that, in accordance with the requirements for the operation cycle of production facilities in chemical enterprises, the company plans to suspend the production line of 150,000 tons of liquid hexafluorophosphoric acid lithium at Longshanbei Base starting from March 1, 2026. The expected downtime for the maintenance is 20 to 30 days. At the same time, the investment project has been changed. The original plan of producing 300,000 tons of electrolyte and 100,000 tons of battery dismantling and recycling has been adjusted to a production project of 250,000 tons of electrolyte, and the construction of the 100,000-ton battery dismantling and recycling project has been cancelled. The total investment after the change will not exceed 600 million yuan.
Industry insiders say that the introduction of the export rebate policy will intensify the competition between the upstream and downstream sectors, and is expected to drive up the prices of some materials further. In fact, since December last year, except for the limited price increases of the anode and separator, the other main materials have generally shown a significant upward trend.
