Beijing plans to reduce export VAT rebates on lithium-ion batteries and materials gradually, starting in April 2026 and ending by Jan. 1, 2027. The announcement has already boosted lithium prices, with carbonate prices hitting a high of 156,060 yuan per metric ton. Investors expect a surge in exports before rebates are eliminated, impacting battery production and demand.

Chinese battery giants like CATL and BYD are likely to benefit from increased exports before rebates end, while South Korean and Japanese manufacturers could regain market share. Lithium producers like Albemarle, Lithium Americas, and Rio Tinto stand to gain from tighter global battery economics and increased lithium demand. Albemarle is expanding capacity, Lithium Americas has a strategic U.S. supply story, and Rio Tinto aims to become a major lithium producer.

Tesla and Rivian may face higher manufacturing costs due to rising Chinese battery prices. Tesla’s cost structure may be negatively impacted, while Rivian, still scaling and aiming for profitability, could face challenges absorbing higher battery costs. The market may see volatility in the short term, with a rush to export before rebates disappear leading to price swings and uneven supply.

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Read more at Nasdaq: China to Cut VAT Rebates on Lithium Batteries: Who Wins & Who Loses?