China Solar Stocks Rise After Beijing Issues Consumption Tax

Skip to Content News Archives Economy Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions Saved Articles My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePMN BusinessChina Solar Stocks Rise After Beijing Issues Consumption TaxShares of most Chinese solar and major battery makers rose on Monday after Beijing unveiled a consumption tax on solar cells and lithium batteries, raising hopes it will hasten industry consolidation, particularly in the oversupplied solar sector.Author of the article: You can save this article by registering for free here. Or sign-in if you have an account.(Bloomberg) — Shares of most Chinese solar and major battery makers rose on Monday after Beijing unveiled a consumption tax on solar cells and lithium batteries, raising hopes it will hasten industry consolidation, particularly in the oversupplied solar sector.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountSolar manufacturer Longi Green Energy Technology Co. advanced as much as 2.4% and Jinko Solar Co. gained 1.8%. Battery giant Contemporary Amperex Technology Co. climbed as much as 4.3% in Shenzhen, while its Hong Kong-listed shares were up by as much as 3.4%.The gains followed Friday’s announcement that China will impose a 2% consumption tax on lithium-ion batteries from September this year, rising to 4% a year later. Solar cells will face the same levy from April 2027, with the rate doubling in April 2028.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againChina exempted solar and lithium batteries from the consumption tax in 2015 to help build up its clean-energy industries. The policy fueled years of rapid capacity expansion that made Chinese manufacturers global leaders, but also left the sectors plagued by brutal price wars.The solar sector, in particular, has grappled with over two years of persistent overcapacity and mounting losses. Beijing has recently stepped up efforts to curb excess production, including by rolling out tougher national efficiency standards for solar and polysilicon products.The battery sector has so far been supported by strong demand from electric vehicles and energy storage. Still, analysts have warned that rapid capacity expansion risks creating the same oversupply problems that have beset solar.“The policy could negatively impact demand or margins for the industry,” Bernstein analysts including Neil Beveridge wrote in a note. “The China battery industry is plagued by overcapacity at the Tier 2 level,” they said, adding that manufacturers will either have to absorb the tax or pass it on to customers.JPMorgan analysts including Rebecca Wen said the tax is in line with market expectations and should further Beijing’s push to rein in excess capacity. Leading battery makers such as CATL should be better placed to absorb or pass on the additional costs than smaller rivals.The tax will not apply to newer technologies such as perovskite solar cells, sodium-ion batteries and solid-state batteries, which will remain exempt through the end of 2028.“The tax adjustment fully reflects the gradual reform approach of the consumption tax, providing companies across industrial chain with sufficient time to adjust inventory and absorb cost impacts,” Citic Securities analysts wrote in a research note, adding that the changes could bring as much as 45 billion yuan ($6.6 billion) of additional revenue for the government.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.