Consumption Tax to Add to Pressure on Chinese Lead-Acid Battery Producers

SHANGHAI, Aug. 6 (SMM) – China will roll out measures for consumption tax adjustment in October. Consumption tax is expected to be imposed on lead-acid battery, which will add to pressure on China’s lead-acid battery producers.

SMM learns that prices branded 48v20Ah batteries have fallen to 480-500 yuan per set as demand remained lackluster in traditional boom season. Distributors reported sizable battery inventories and heightened competition. In this context, producers will suffer from higher costs should consumption tax be imposed on lead-acid battery.

Industry insiders had voiced objection to imposition of consumption tax since 2012, but it appeared to be the inevitable result of China’s financial and tax reforms. That said, the government may set comparatively low tax rate in the early stage considering the sluggishness across the industry.