China is giving sodium-ion batteries a temporary tax advantage over conventional lithium-ion technology as manufacturers look to bring the alternative chemistry into commercial electric vehicles. One of the country’s leading sodium-ion battery developers, Hina Battery, is planning a 10 GWh production base in Wuhan and has partnered with a vehicle manufacturer to develop electric sanitation trucks.

The expansion comes as China introduces a consumption tax on specified lithium-ion batteries while exempting qualifying sodium-ion batteries through 2028. The policy could improve the economics of sodium-ion production, although falling lithium prices have narrowed the cost gap between the two chemistries.

The technology is also attracting attention for its performance in extreme cold. FAW Jiefang reported that one of its electric heavy trucks equipped with a sodium-ion battery retained more than 90% of its usable capacity during testing at minus 40 degrees Fahrenheit.

China’s Ministry of Finance, General Administration of Customs and State Taxation Administration issued Announcement No. 20 (2026) on July 16, revising consumption tax rules for several battery categories.

From September 1, 2026, specified lithium-ion batteries became subject to a 2% consumption tax. The rate is scheduled to rise to 4% on September 1, 2027. Qualifying sodium-ion batteries, solid-state batteries and fuel cells are exempt from the tax through December 31, 2028, provided they meet applicable national standards.

The exemption gives sodium-ion manufacturers a temporary fiscal advantage, but it does not automatically make their products cheaper to produce. Battery-grade lithium carbonate averaged approximately $13,500, per metric ton on October 28.

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