China pauses approvals for battery storage manufacturing projects

China has temporarily suspended approvals for new battery storage manufacturing projects, a regulatory move that signals growing unease about runaway capacity growth in one of the country’s most strategically important industries. The pause, reported by Chinese financial outlet Cailianshe on September 7, 2026, targets new factories dedicated to battery cell production specifically. Projects that have not yet broken ground are frozen in place. Those already under construction are allowed to continue, at least for now. Too much of a good thing China is the world’s largest battery manufacturer by a considerable distance. New energy storage capacity commissioned in the first half of 2026 fell 18% compared to the same period a year earlier. Mandatory co-location rules that once required renewable energy projects to pair with on-site storage were relaxed, removing a significant source of guaranteed demand for battery installations. At the same time, solar manufacturers have muscled into the storage space, intensifying competition at precisely the moment when prices were already declining. The approval freeze is designed to give Beijing time to assess the gap between existing operational ...