China's Ministry of Finance and State Taxation Administration imposed a 2% consumption tax on lithium-ion battery products starting September 1, 2026, with the rate set to double to 4% a year later, according to a joint policy notice. Exempted from that tax through December 31, 2028 are solid-state, sodium-ion and fuel-cell batteries, provided they meet the relevant national standard and carry a qualifying test report. The timing lines up with a wave of automaker announcements: Dongfeng Motor is targeting a September 2026 launch for its first solid-state electric vehicle, while GAC-backed Greater Bay Technology and Changan run parallel pilot programs of their own.
Dongfeng's battery pairs a high-capacity ternary cathode with a silicon-carbon anode and an oxide-polymer composite solid electrolyte, delivering what the company describes as 350 Wh/kg of energy density and up to 621 miles of range on a full charge. Already operational, a 0.2 GWh pilot line handles production, the automaker has said. Separately, Changan is targeting the end of the third quarter of 2026 to deploy solid-state cells in vehicles and robots for validation, ahead of a push toward mass production in 2027.
Standards work is moving alongside the hardware. On August 21, 2026, the International Electrotechnical Commission approved a China-led proposal to develop an international application guide for solid-state EV batteries, with experts from France, Japan and South Korea joining the drafting group; the process is expected to take 24 to 36 months. China's own domestic standard, GB/T 43568-2026, which classifies liquid, hybrid solid-liquid and all-solid-state batteries by electrolyte-content thresholds, took effect on July 1, 2026.
Battery suppliers report mixed progress on production readiness. For its part, Sunwoda has cited a 400 Wh/kg target for its first-generation polymer-based solid-state chemistry, with vehicle trials planned for late 2026 and 2027 — though the company describes the figure as a development target rather than a verified production result. EVE Energy, meanwhile, has confirmed the roll-off of a 60 Ah prototype cell from its Longquan series, and Gaoneng Digital reported that a 20 Ah cell showed no thermal runaway or open flame after a nail-penetration test conducted under the GB 38031-2025 safety standard.
Cost remains a barrier separate from the tax question. Sulfide-based solid electrolyte such as Li6PS5Cl has traded near 4,300 yuan, or roughly $605, per kilogram in China this year — more than 80 times the price of the liquid electrolyte used in conventional lithium-ion cells, according to pricing from Shanghai Metals Market. Meanwhile, Japanese rivals Toyota and Idemitsu Kosan have targeted 2027 to 2028 for their own solid-state EV commercialization, putting China's tax exemption and the Dongfeng launch on a collision course with a broader Asia-wide race to bring the technology to market.