China pauses approvals for battery storage manufacturing projects

China, the world's largest manufacturer of ​batteries for energy ​storage, has temporarily suspended approvals for ​new factories, Chinese financial news outlet Cailianshe reported on Saturday.

The pause comes as authorities conduct a review of ‌existing and ⁠planned energy ⁠storage production capacity, with a focus on battery cells, ​the report said, citing industry sources.

The move comes amid growing concerns about overcapacity risks in the energy storage sector, according to the report. That is despite a surge in demand ⁠for batteries ‌used to balance grids and provide backup power.


Projects that have not broken ground ⁠will not move forward for the moment ​but those already under construction will ​not be affected, Cailianshe sources said, adding the policy could be adjusted later.

China's energy storage industry has expanded rapidly alongside the country's renewable energy build-out but, as with other industries ‌like solar panels and electric vehicle manufacturing, manufacturers have faced mounting pressure from intense ​competition and ​falling prices.

⁠China's leading solar manufacturers have also expanded aggressively into battery energy storage as shrinking profits and overcapacity in ​the panel sector push them to seek new growth opportunities.

China has taken other steps to rationalise the market including levying a consumption tax on lithium-ion batteries and solar cells.