Chinese Battery Makers See Tariff Pain Added to Domestic Woes

By Bloomberg

Apr 10, 2025

image is BloomburgMedia_SUH4FDDWX2PS00_10-04-2025_07-31-34_638798400000000000.jpg

Sungrow Power Supply Co.'s PowerTitan series energy storage system at an expo in Shanghai.

(Bloomberg) -- China’s energy storage industry faces a double whammy to its sales prospects from punitive US tariffs and scaled-back support from the government in its domestic market.

Batteries used to store power from intermittent renewables are crucial to China’s pivot to high-tech manufacturing. The US and China accounted for more than 70% of the systems installed last year, according to BloombergNEF, and their escalating trade war threatens a massive upheaval to the business of leading suppliers such as Sungrow Power Supply Co.

The Trump administration’s 125% levy on Chinese goods threatens to derail exports to China’s largest overseas market. At home, meanwhile, clean energy is shifting to market-based pricing from June 1. That’s likely to slow wind and solar additions, and carries with it the warning that new projects will no longer need to install energy storage units as a compulsory requirement.

“Policy support has driven rapid growth in the sector, but it’s like taking medicine and you can’t keep taking it forever,” Cao Wei, general manager of Sungrow’s energy storage unit, said in an interview on Wednesday at a conference hosted by the company in its home city of Hefei, Anhui province.

Tariff Burden

Tariffs are a significant burden on Chinese energy storage firms, and their response is likely to include refocusing on the domestic market, said Yao Yi, project lead with Greenpeace East Asia in Beijing.

That’s no panacea, though. Chinese installations are likely to fall 17% this year, according to BNEF, as government support is dialed back and the industry struggles to find a profitable business model.

Sungrow’s stock performance is indicative of the sharp deterioration in the industry’s fortunes. From a peak of nearly 120 yuan ($16) in October, its shares in Shenzhen have halved, including a 16% loss this month as the trade war with Washington has moved into high gear.

Sungrow’s Cao is sanguine for the longer term, reasoning that tougher conditions will promote innovation and clear out companies whose products aren’t up to scratch.

“The tariff situation is changing constantly and we have been monitoring developments closely,” said Cao. “Whatever the policies, the first thing we need to do is to make good products.”

On the Wire

China’s top leaders are poised to meet Thursday to discuss additional economic stimulus after US President Donald Trump ratcheted up tariffs, according to people familiar with the matter.

China’s consumer deflation extended for a second month in March, as an escalating trade war with the US threatens to put more downward pressure on prices.

President Donald Trump has ramped up US tariffs on China by a record 125%, betting he can force Xi Jinping to the table even as Beijing vows to “fight until the end.” The question now is which leader folds first.

Traders are less optimistic about aluminum prices in April on the Shanghai Futures Exchange than in London, according to Bloomberg Intelligence.

The Trump administration is considering changes to its plan to slap a charge on Chinese ships docking at US ports after heavy pushback from industry groups, according to people familiar with the discussions.

The cost of transporting liquefied petroleum gas from the US Gulf to Asia — a boom trade for American producers of the fuel — collapsed after China pressed ahead with 84% tariffs on the cargoes.

This Week’s Diary

(All times Beijing unless noted.)

Thursday, April 10: