Energy storage battery cell prices still have downward room as the iteration of 300+Ah battery cells accelerated

[SMM Analysis: Structural Tightness in Electrolyte Raw Materials in August; Finished Product Price Transmission Lags] In August, the lithium battery industry chain entered a pre-stocking cycle ahead of the "September-October peak season." Demand from both the power battery and energy storage sectors continued to be released, driving a steady rise in electrolyte industry operating rates and production. The industry as a whole continued to show a structural pattern of ample nominal capacity for finished electrolyte but tight supply of core raw materials such as LiPF6 and VC. Rising prices of upstream lithium chemicals and additives pushed up finished electrolyte prices, but these increases had not yet been fully transmitted to downstream clients. Future price trends still need to be continuously monitored along with raw material price changes and the extent of transmission.

SMM believes that the State Taxation Administration’s latest response on August 27 significantly reduced the largest policy uncertainty ahead of the implementation of the energy storage consumption tax. Previously, market discussions focused mainly on “whether the consumption tax would be levied at the PACK or battery cabin level.” The official position has now been further clarified: battery clusters are taxable batteries, while ESSs are non-taxable complete sets of power equipment. The consumption tax base will not continue to expand to the full value of ESSs. The export side follows a different logic. The consumption tax refund mechanism means that, in principle, the 2% tax burden will not become a permanent cost for ESS exports. Therefore, compared with the Chinese market, export quotations are significantly less directly affected by the consumption tax. For overseas business, more attention should be paid to the VAT export rebate rate for battery products, which has already been reduced to 6% and will be eliminated in 2027, and to the VAT export policy corresponding to the HS code of complete ESSs themselves.

[SMM Analysis] Battery cell prices in the energy storage sector pulled back slightly this week. Prices for 100Ah cells softened more noticeably, pressured by elevated residential ESS inventory and weakening demand. Outside China, the US further tightened access for large-capacity power system equipment, but the near-term impact on actual energy storage shipments from China remained relatively limited.