China Urges Battery Makers to Curb Overcapacity

China's Ministry of Industry and Information Technology has issued a call to battery manufacturers, urging them to optimize industry capacity and preemptively address risks of overcapacity. The ministry highlighted the critical need for regulated market competition and strengthened oversight across both the electric vehicle and energy storage battery sectors.

This proactive measure follows a surge in demand for energy storage batteries, largely propelled by the global expansion of data centers. However, the ministry expressed concern over "blind" manufacturing expansion, drawing parallels to the solar industry's past struggles with ballooning capacity that led to price drops and financial losses.

The directive aims to foster sustainable growth within the battery industry, ensuring it aligns with market demands and avoids the pitfalls of unchecked development. Enhanced supervision is expected to guide industry players towards more responsible production practices.