China Cracks Down on Cut‑Throat Battery Price Wars: A New Era for Energy Storage Stability Published By Anupam Nath In a decisive move to restore stability in its rapidly expanding energy storage sector, the Chinese Ministry of Industry and Information Technology (MIIT) has called for urgent action to curb “irrational competition” that is eroding profit margins and risking long-term sustainability. The announcement, made during a high-level meeting on November 28, marks one of the strongest government interventions yet in the global energy storage market.Over the past two years, China’s battery energy storage (BESS) industry has witnessed enormous capacity growth, driven by national decarbonization goals and falling component costs. Yet this boom has also triggered an industry-wide race to the bottom. Oversupply, aggressive bidding, and ultra-low prices—some as low as $65/kWh—have put immense pressure on manufacturers, integrators, and supply chains. Industry voices now warn that uncontrolled expansion could mirror the initial “involution” phase seen during China’s early solar boom.MIIT Minister Li Lecheng underscored that the Central Committee of the Communist Party attaches great importance to the sound development of the power and battery sector. He emphasized that instead of reckless undercutting, companies must “strengthen quality supervision, ensure production consistency, and build a fair, innovative ecosystem.” The ministry aims to guide enterprises toward scientific production planning and a rational overseas expansion strategy.This shift signifies a major policy pivot—from rapid growth to sustainable consolidation. Rather than chasing market share through low bids, the government wants manufacturers to focus on innovation, technology differentiation, and safety. Stronger regulations are expected to standardize testing, supervise capacity, enhance product traceability, and crack down on intellectual property violations.The industry, too, appears willing to cooperate. In mid‑2025, nearly 150 companies, including lithium‑ion, sodium‑ion, and flow‑battery firms, backed an “anti‑involution” initiative to stop destructive price wars. Earlier in 2024, both the China Energy Storage Alliance (CNESA) and the CPC Political Bureau had already signaled that the country needs stronger self-discipline and an orderly exit of outdated capacity.China’s approach closely resembles the transformation of its solar photovoltaic (PV) sector a decade earlier. After years of chaotic price competition, the solar industry stabilized through strict regulation, consolidation, and innovation. Many analysts predict that China’s energy storage industry is now entering a similar phase—where quality, safety, and export competitiveness will define future winners.For the rest of the world, this restructuring may have mixed effects. In the short term, it could slightly slow the pace of China’s battery exports and project installations. However, in the long run, it promises to produce more reliable, efficient, and sustainable energy systems. As the global transition toward renewable power intensifies, China’s commitment to curbing price wars may set a benchmark for balancing industrial growth with environmental and economic sustainability.
