Cancellation of Export Tax Rebates: Challenges and Opportunities for the Photovoltaic and Battery Industry

Policy Adjustment Background and Content

Against the backdrop of economic development and continuous optimization of industrial structure, the Ministry of Finance and the State Taxation Administration issued an announcement on January 8, 2026, regarding adjustments to the export tax rebate policy for photovoltaic and other products. Effective April 1, 2026, the value-added tax (VAT) export tax rebate for photovoltaic and other products will be officially cancelled. For battery products, from April 1, 2026 to December 31, 2026, the VAT export tax rebate rate will be reduced from 9% to 6%; from January 1, 2027, the VAT export tax rebate for battery products will also be cancelled. Simultaneously, the announcement clarifies that for the portion of the aforementioned products subject to consumption tax, the export consumption tax policy will remain unchanged, continuing to apply the existing consumption tax refund (exemption) policy, and the export tax rebate rate for the products listed in this announcement will be determined based on the export date indicated on the export customs declaration.

This policy adjustment is not accidental; it is an inevitable result of my country's industrial development reaching a certain stage. With the continuous growth and expansion of the photovoltaic and battery industries, related industries have gradually matured and gained strong competitiveness in the international market. Canceling or adjusting export tax rebate policies is an important measure by the government to guide industrial upgrading and optimize the industrial structure.

Direct short-term impact on businesses

Increased costs and squeezed profits

The cancellation or reduction of export tax rebates will most directly impact photovoltaic and battery companies by increasing export costs. Taking battery products as an example, before the policy adjustment, companies could receive a 9% VAT export tax rebate, which reduced export costs and improved product price competitiveness to some extent. However, from April 1 to December 31, 2026, the export tax rebate rate will be reduced to 6%, correspondingly increasing export costs for companies. From January 1, 2027, the export tax rebate for battery products will be cancelled, leading to even higher costs for companies. This will undoubtedly squeeze profit margins, especially for those with thin profit margins who rely on export tax rebates for survival; the pressure will be even greater for them.

Increased market competition

Increased costs weaken companies' price advantage in the international market. To maintain market share, companies may resort to price reductions, which will further squeeze profit margins. Meanwhile, similar products from other countries and regions may be more price-competitive due to the lack of impact from export tax rebate policy adjustments, thus intensifying market competition. Some weaker companies may be eliminated in this fierce competition.

Long-term positive significance for the industry

Promote industrial upgrading

In the long run, adjustments to export tax rebate policies will drive the upgrading of the photovoltaic and battery industries. To cope with rising costs and market competition, companies will inevitably strengthen cost control, process development, brand enhancement, and the construction of overseas sales channels. For example, companies will increase R&D investment, improve production processes, reduce production costs, and enhance product quality and performance, thereby increasing product added value and market competitiveness. This will prompt the entire industry to transform from low-end manufacturing to high-end manufacturing, achieving industrial upgrading.

Eliminating outdated production capacity

Eliminating or reducing export tax rebates can force companies to innovate. Those with poor profitability and heavily reliant on export tax rebates for survival will face immense pressure and may even be forced out of the market. This achieves the goal of eliminating outdated production capacity and optimizing the industrial structure and market landscape across the entire industry. Through market competition, resources will concentrate on leading companies, improving the overall efficiency and competitiveness of the industry.

Corporate Response Strategies

Strengthen cost control

Enterprises should strengthen internal management, optimize production processes, and reduce production costs. For example, they can reduce raw material procurement costs by optimizing supply chain management; improve production automation levels to increase efficiency and reduce labor costs. At the same time, enterprises can also strive for more favorable procurement prices by establishing long-term and stable cooperative relationships with suppliers.

Increase R&D investment

Increased R&D investment is key for enterprises to enhance their core competitiveness. Enterprises should strengthen technological innovation, develop new products and technologies with independent intellectual property rights, and improve product quality and performance. For example, photovoltaic companies can increase R&D investment in high-efficiency solar cell technology to improve the conversion efficiency of solar cells; battery companies can develop new battery materials and technologies to improve battery energy density and safety.

Expanding the domestic market

Against the backdrop of adjustments to export tax rebate policies, enterprises should actively expand into the domestic market. With the continuous development of my country's economy and the increasing demand for clean energy, the domestic photovoltaic and battery market has enormous development potential. Enterprises can strengthen cooperation with domestic companies, participate in major domestic projects, and increase their domestic market share. Simultaneously, enterprises can strengthen brand building, improve brand awareness and reputation, and enhance consumer recognition of their products.

Optimize overseas market layout

Enterprises should optimize their overseas market layout and reduce their reliance on a single market. In addition to traditional European and American markets, companies can explore emerging markets such as Asia, Africa, and Latin America. These regions are experiencing rapid economic development, leading to increasing demand for photovoltaic and battery products, providing ample market opportunities. Simultaneously, companies can strengthen cooperation with local businesses to establish localized production and sales systems, thereby mitigating trade risks.

Policy adjustments reshape the industry landscape

Corporate differentiation intensifies

The adjustment of export tax rebate policies will exacerbate the differentiation among companies in the photovoltaic and battery industry. Some stronger, more innovative companies will be better able to cope with the challenges brought about by the policy adjustment, improving product competitiveness and further expanding market share by strengthening cost control and increasing R&D investment. Meanwhile, some weaker companies reliant on export tax rebates will face survival difficulties and may be eliminated by the market. This will prompt industry resources to concentrate on leading companies, increasing industry concentration.

Industrial cluster development

With the reshaping of the industry landscape, the photovoltaic and battery industries will exhibit a trend towards cluster development. Leading companies will create synergies in areas such as technology research and development, manufacturing, and marketing, enhancing the overall competitiveness of the industry. Simultaneously, industrial cluster development will attract more upstream and downstream enterprises to gather, forming a complete industrial chain, reducing production costs for companies, and increasing the added value of the industry.

Future Development Trends

Technological innovation leads development

In the future, the photovoltaic and battery industry will continue to be driven by technological innovation, constantly propelling its development. With continuous advancements in science and technology, photovoltaic and battery technologies will achieve breakthroughs, such as high-efficiency solar cell technology, new battery materials, and advanced battery technologies. The application of these technologies will improve the performance and efficiency of photovoltaic and battery products, reduce production costs, and promote the sustainable development of the industry.

Green development has become the mainstream.

Against the backdrop of global efforts to address climate change, green development will become the mainstream in the photovoltaic and battery industries. Enterprises will place greater emphasis on environmental protection and sustainable development, adopting green production processes to reduce pollution. Meanwhile, photovoltaic and battery products, as a crucial component of clean energy, will play a vital role in the global energy transition.

Strengthening international cooperation

With the deepening of economic globalization, international cooperation in the photovoltaic and battery industries will continue to strengthen. Enterprises will enhance cooperation with internationally renowned companies, introduce advanced technologies and management experience, and improve their competitiveness. At the same time, Chinese enterprises will actively participate in the formulation of international standards, striving for greater influence in the international market.

The cancellation of export tax rebates presents both challenges and opportunities for the photovoltaic and battery industries. Enterprises should proactively address the challenges brought about by this policy adjustment, seize the opportunities, strengthen technological innovation, optimize industrial structure, and achieve sustainable development. The government should also strengthen policy guidance and support to create a favorable environment for the industry's development.