Business

China Warns Battery Industry Against Overcapacity
By Reuters | 08 Jan, 2026

Surging global demand for storage batteries for new AI data center buildout may override the industry ministry's views with leading Chinese battery makers.

China's industry ministry said on Thursday it had urged battery manufacturers to optimize industry capacity and mitigate risks of overcapacity.

The ministry highlighted the need to regulate market competition and enhance supervision within the electric vehicle and energy storage battery sectors, according to a readout of a meeting on Wednesday posted on its Wechat account.

Top battery makers CATL, BYD, Gotion High Tech and EVE Energy were among the some 16 companies present at the meeting, state-run China Daily reported, citing sources. Energy storage system integrators Beijing HyperStrong Technology, Zhuzhou CRRC Times Electric and Trina Solar - also a top solar manufacturer - also attended, according to the report.

The industry ministry said it convened the meeting along with the state planner and energy and market regulators.

Demand for energy storage batteries has surged as a result of the construction of data centres around the world.

The industry has blindly built out manufacturing capacity, the ministry said, echoing criticism of the solar sector where ballooning capacity led to sinking prices and industry-wide losses.

(Reporting by Colleen Howe; Editing by Jacqueline Wong, Stephen Coates and Louise Heavens)