China has temporarily stopped approving new battery storage factories. Cailianshe reported the pause on September 7, 2026. Authorities are reviewing existing and planned production capacity, with attention on battery cells, as concerns grow over overcapacity in the sector.
Snapshot
Country: China
Sector: Battery Storage Manufacturing
Action: Suspension of new factory approvals
Focus Area: Battery cell production capacity
Projects Unaffected: Already under construction
China has temporarily suspended approvals for new energy storage factories. Officials are conducting a review of existing and planned energy storage production capacity. The review has a particular focus on battery cells. According to industry sources, the pause reflects growing concern about overcapacity risks in the sector.
Demand has not slowed alongside the review. Batteries used to balance power grids and provide backup power are seeing a clear surge in demand. The suspension applies mainly to projects still on paper. Factories that have not yet broken ground will not move forward for now. Projects already under construction will continue without interruption. Sources added that the policy could be adjusted later, leaving room for change as conditions shift.
China's energy storage sector expanded rapidly alongside the country's renewable energy build-out. The country remains the world's largest manufacturer of batteries for energy storage. That pace of growth has brought pressure familiar to other clean energy industries. Battery makers have faced tremendous competition and falling prices, a pattern common in solar panels and electric vehicles.
Some manufacturers are shifting focus in response. Leading Chinese solar companies have been expanding into battery energy storage. Cutting down margins and overcapacity in the solar panel market are pushing them toward new sources of growth.
Regulators have used other tools alongside this pause. China has imposed a consumption tax on lithium-ion batteries and solar cells as part of broader efforts to rationalize the market.
Sales trends among major manufacturers point to where the industry is heading. CATL has said it expects energy storage to account for half of its global sales by 2030, up from about 25 percent currently. A CATL executive for European energy storage systems noted that storage sales have grown from just 2% of the company's battery sales five years ago, driven by the need to support intermittent renewable power.