China Launches Crackdown on Cut-Throat Competition in Power and Storage Battery Sector

BEIJING, April 9 – Four key Chinese government departments have jointly convened industry players to tackle intensifying "involutionary" competition and restore order in the domestic power and energy storage battery market, according to an official statement released late Wednesday

The meeting, held by the Ministry of Industry and Information Technology (MIIT), National Development and Reform Commission (NDRC), State Administration for Market Regulation (SAMR), and National Energy Administration (NEA), aimed to curb cut-throat practices that have disrupted market dynamics. Senior officials emphasized the urgency of addressing irrational competition to safeguard the sector's long-term, high-quality development.

Participants reviewed the severity of unhealthy rivalry, including predatory pricing, prolonged payment terms for suppliers, intellectual property infringements, and aggressive local government investment incentives that risk overcapacity. Such practices have eroded profit margins, compromised product safety, and hindered technological innovation across the supply chain.

Under the newly outlined framework, authorities will implement targeted measures: strengthening production capacity monitoring and early warning systems; standardising pricing mechanisms to prevent below-cost dumping; enforcing stricter payment terms to ease financial strain on upstream firms; ramping up product quality inspections; cracking down on IP theft; and curbing the externalisation of cut-throat tactics. Regulators will also guide local governments to avoid overly competitive investment promotion policies that fuel redundant construction.

Notably, delegates deliberated on a draft negative list detailing specific prohibited unfair competition behaviours, marking a systematic approach to enforcement. Industry associations and 16 leading battery manufacturers attended the session, signalling broad stakeholder alignment with the regulatory push.

The coordinated intervention follows repeated warnings over unsustainable price wars that have plagued China's battery industry, a global leader in production capacity and technological advancement. While the sector has expanded rapidly, unchecked competition has raised concerns over financial stability and compliance standards, prompting state intervention to recalibrate growth toward value-driven innovation rather than volume-based expansion.

The regulatory offensive underscores Beijing's commitment to fostering a healthy industrial ecosystem as the power and storage battery sector remains pivotal to China's energy transition and electric vehicle ambitions. Authorities will continue cross-departmental coordination to ensure effective implementation of the corrective measures.