China is reportedly reviewing existing and planned energy storage manufacturing capacity in the country
New manufacturing projects that are yet to start construction could face delays
The review comes as Chinese authorities step up efforts to control capacity expansion and 'involutionary' competition across the battery industry
China has temporarily paused approvals for some new energy storage manufacturing projects as authorities review the sector’s capacity growth, amidst concerns of overcapacity in this space.
The review covers existing and planned production capacity. Manufacturing projects still in the planning stage and not yet under construction could be held back. Projects already registered and under construction are not expected to be affected, according to a report by local news outlet, Cailian Press.
It says that the move comes amid growing concerns about excess capacity and intense competition in China’s energy storage industry.
The Chinese report quotes Tian Qingjun, Senior Vice President of Envision Energy, who said energy storage cell manufacturers have planned more than 800 GWh of additional production capacity this year, with planned capacity potentially reaching about 1.2 TWh to 1.5 TWh by year-end. Total planned capacity is expected to exceed 2 TWh.
According to Qingjun, the sharp rise in demand was driven by stronger domestic demand, overseas buying ahead of lower export tax rebates, and the industry’s short capacity-building cycle. He expects the boom to ease as new factories come online, potentially leading to industry consolidation in the next few years.
So far, no formal government policy or official notice has confirmed a broad suspension of new manufacturing approvals. However, Chinese authorities have taken steps this year to address capacity expansion in this field and ‘involutionary’ competition in the lithium battery industry.
On January 7, 2026, the Ministry of Industry and Information Technology (MIIT) held a symposium on the power and energy storage battery industry, and called for better capacity management, stronger monitoring and early-warning mechanisms, and tighter controls on redundant construction to reduce overcapacity risks.
The authorities returned to the issue at a meeting with industry participants on April 9, 2026, wherein they called for continued capacity early warning and control, tighter regulation of price competition, stronger product quality oversight, and action against intellectual property violations.
At the meeting, the ministry discussed ‘negative behaviors’ associated with irrational competition in the power and energy storage battery industries. The April meeting was attended by industry associations and 16 major power and energy storage battery companies.
This follows similar measures taken by the Chinese government in China’s PV industry, where authorities and manufacturers have moved to address excess capacity, curb aggressive price competition, and limit disorderly expansion. Recent steps have included tighter energy standards for solar manufacturing and efforts to discourage below-cost selling (see Eight Chinese Polysilicon Makers Agree To Fair Pricing).
