Tax Rebate Cut by 4 Percentage Points, Renewal of China-EU Price Commitment, Battery Passport Countdown: New Challenges After 570,000 Units Exported
On October 12, the Ministry of Finance and the State Taxation Administration issued Announcement No. 29 of 2026, stipulating that from April 1, 2027, the export tax rebate rate for value-added tax on NEVs will be reduced from 13% to 9%, covering 67 categories of products, including both battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs).
On the same day, the Passenger Car Association (PCA) disclosed that NEV passenger car exports in September reached 558,000 units, a year-on-year increase of 163.5%; under the China Association of Automobile Manufacturers (CAAM) caliber, NEV exports were 571,000 units, a year-on-year increase of approximately 1.6 times.
Four days earlier, from October 8 to 9, Minister of Commerce Wang Wentao and European Commission Trade Commissioner Maroš Šefčovič co-chaired the second regular meeting of the China-EU Trade and Investment Consultation Mechanism in Beijing. The two sides reached an understanding on hybrid vehicle trade in a manner consistent with WTO rules and confirmed the continuation of the price commitment and review procedures for enterprises in the anti-subsidy case on electric vehicles.
Earlier, on September 25, the Global Battery Alliance (GBA) released the Battery Baseline System and established a new partnership with the International Trade Centre; on October 13, the GBA held a joint seminar with the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters (CCCMC) on sustainable certification for battery passports and the Chinese supply chain due diligence guidelines.
Within a week, three major events occurred simultaneously: the reduction of the tax rebate, the extension of the China-EU price commitment, and the countdown to the GBA battery passport. While the figure of 570,000 exported units is still making headlines, the constraints on the global layout of Chinese power batteries have been quietly rewritten.
01 Top 10 Exporting Automakers and Their Battery Lineups
The ranking of NEV passenger car exporting enterprises in September released by the PCA outlines the main lineup for this round of global expansion.
Table 1 Top 10 NEV Passenger Car Exporting Enterprises and Supporting Batteries in September 2026
(Data source: PCA, comprehensive automaker announcements, and public disclosures by suppliers)
This table hides two clear mainlines of the supply chain. One is the "self-supply camp": BYD is fully covered by FinDreams Battery, and this single automaker accounts for 31.5% of the NEV passenger car export share in September.
The other is the "external procurement camp": the second tier of exporters, consisting of Chery, Geely, SAIC, Changan, Leapmotor, XPeng, and Dongfeng, has battery orders highly concentrated in the hands of three companies: CATL, CALB, and Gotion High-Tech.
According to industry conventions, calculating with an average battery capacity of 50kWh per NEV passenger car, the export of 570,000 units corresponds to a monthly overseas battery demand of approximately 28GWh.
Currently, the vast majority of this demand is still produced by domestic factories in China and shipped overseas along with the complete vehicles. The real variable is that this model of "Chinese cells, global vehicles" is being forced towards "localized cells" by tariffs and compliance rules, and the recent export tax rebate policy will accelerate this process.
02 Tax Rebate Cut by 4 Percentage Points, the Profit Calculation of the Export Model Has Changed
The reduction of the export tax rebate rate from 13% to 9% means that for every NEV passenger car exported, enterprises will get back 4 percentage points less in the value-added tax link. Taking a rough calculation of a BEV model with a free-on-board (FOB) price of USD 20,000, the profit margin per vehicle is directly compressed by approximately USD 800.
Calculations from institutional research reports indicate that this policy is generally in line with expectations and will not reverse the upward trend of going global, but it is indeed systematically raising the cost of the "complete vehicle export from China" path.
The timing of the policy is worth pondering. Its implementation on April 1, 2027, exactly overlaps with the time window for the production launch of BYD's Szeged passenger car plant in Hungary, the mass production of Chery's plant in Spain, and the capacity expansion of XPeng's Magna production line in Europe.
This is equivalent to telling automakers: the bonus period of relying on domestic production in China and directly exporting complete vehicles is coming to an end, and the next step is to rely on localized manufacturing overseas to absorb costs.
The calculation for battery manufacturers is the same. For a car assembled in Europe, if the cells are still shipped from China, the battery pack itself does not directly suffer from the reduction in the complete vehicle export tax rebate. However, the accumulation of Ro-Ro shipping freight, inventory cycles, and tariffs, coupled with the impending mandatory battery passport compliance costs, will further squeeze the profit margins of the intermediate route of "Chinese cells, European vehicles."
03 Extension of China-EU Price Commitment, the Door to Exporting to Europe Is Not Fully Open
In January 2026, China and the EU achieved a "soft landing" on the anti-subsidy case for electric vehicles. The European side issued general guidance documents on price commitments, with the core mechanism being a Minimum Import Price (MIP) plus annual quotas.
The consultations from October 8 to 9 merely confirmed the continuation of the enterprise price commitment and review procedures, without opening up new export space. On October 14, BYD, Geely, and Chery issued statements on the same day, which is precisely the confirmation of this mechanism by the three main exporting forces.
The understanding on hybrid vehicle trade is another signal.
In the past, China-EU friction was concentrated on BEVs. This time, incorporating PHEVs and extended-range electric vehicles (EREVs) into the trade arrangement under the WTO framework is a marginal benefit for this batch of PHEV export mainstays like Chery, Geely, and Changan, but it is also premised on "orderly exports."
Under the price commitment mechanism, the path of simply relying on price cuts to seize the European market has been blocked. The remaining space must be fought for through product competitiveness and localized manufacturing.
For battery enterprises, the price commitment locks the complete vehicle export end, but inversely drives the demand for local assembly in Europe.
For automakers to bypass quotas and MIP, the most direct way is to build factories in Europe and supply the European market with cars produced locally in Europe. And for cars assembled locally in Europe, where will the batteries come from? This is precisely the window of opportunity for CATL's Hungary plant, Gotion High-Tech's Spanish joint venture base, and EVE Energy's Debrecen large cylindrical cell project.
04 GBA Battery Passport Countdown, the Carbon Footprint of Cells Must Be Calculated Locally in Europe
If the tax rebate and China-EU consultations are hard constraints on the trade end, the GBA battery passport is a soft threshold on the compliance end.
In September 2026, the GBA announced the results of the battery passport operational pilot. 40 organizations from 13 countries formed 18 consortia to participate, covering chemical systems such as LFP, NCM, and NCA, as well as the entire supply chain of lithium, cobalt, nickel, and natural graphite. The battery capacity of participating enterprises accounts for more than half of the global EV battery capacity.
On September 25, the GBA released the battery baseline system and cooperated with the International Trade Centre; on October 13, the GBA held a joint seminar with the CCCMC to promote the alignment of sustainable certification for battery passports with the Chinese supply chain due diligence guidelines.
According to the timetable of the EU Battery Regulation (EU 2023/1542), starting from 2027, EV power batteries must be equipped with digital battery passports, featuring one code per item, recording raw material traceability, carbon footprint, production data, due diligence, and recycling information.
For cells produced only domestically and shipped to Europe by sea, proving in the passport that the carbon footprint is low, mineral sources are traceable, and the supply chain is responsible is far more difficult than building a factory locally in Europe, using local grid electricity, and local upstream materials.
This is also why Sunwoda specifically mentioned building a battery passport platform in its semi-annual report, CALB plans to build a factory in Portugal, and CATL treats its Hungary plant as a sample of "moving Chinese efficiency into the heart of Europe."
The battery passport is not a simple QR code label, but a complete set of data systems, requiring battery manufacturers to complete data collection and certification at the production site. Doing this within China and doing it locally in Europe have completely different compliance costs and credibility.
05 Overseas Capacity Map of Chinese Battery Enterprises
Looking at the overseas layout of major Chinese battery enterprises, the divergence of paths has become quite obvious.
Table 2 Overseas Capacity Layout of Major Chinese Power Battery Enterprises (as of the end of September 2026)
(Data source: Incompletely compiled based on announcements and public reports)
In this table, three paradigms of going global have become clearer under the triple policies.
CATL adopts "capital binding + major customer locking," forming a joint venture with Stellantis and building a factory adjacent to BMW in Hungary. In essence, it turns the orders from European automakers into its own capacity investment in advance.
Gotion High-Tech joins hands with Volkswagen PowerCo to land in three countries at once, which is a sample of second-tier battery factories using overseas automotive giants to exchange for tickets.
BYD's FinDreams, on the other hand, follows the "going global with complete vehicles" approach. The battery factory follows its own automaker, does not take large external orders, but has the highest certainty.
There are also those who have hit the brakes. SVOLT once announced building a factory in Europe in 2022, and terminated the operations of two European subsidiaries in October 2024. Chairman Yang Hongxin publicly stated that "blindly making large-scale investments in Europe is too heavy a burden, and the risk is too great without orders," choosing to deeply cultivate Thailand for its overseas part.
EVE Energy, on the other hand, chose to "take the Arctic Express route" in 2026 to ship large cylindrical cells from China to Europe, serving as a transitional bridge before the production launch of its Hungary plant in 2027.
06 Resonance of Three Policies, Battery Global Expansion Changes from a Multiple-Choice Question to a Mandatory One
In the short term, the monthly battery demand of 28GWh corresponding to the export of 570,000 units does not constitute a supply bottleneck, relative to CATL's domestic capacity utilization rate of 94.86% alone, and the industry's annual capacity of over 1,200GWh.
What is truly tight is the effective capacity that is "local in Europe, compliant with European standards, meets battery passport data requirements, and serves European automakers constrained by price commitments."
In the medium term, 2027 is a node pushed up jointly by the triple policies. The reduction of the export tax rebate takes effect on April 1, the GBA battery passport is mandatorily launched, CATL's Hungary plant ramps up production, the Zaragoza plant in Spain starts production, EVE Energy's Hungary plant rolls off the production line, and Gotion High-Tech's three-country joint venture base is completed—all time points are squeezed into the same year.
The concentration of time points is not a coincidence, but the inevitable convergence in 2027 of the overseas factory construction cycle initiated by Chinese battery enterprises around 2023 and the two policy timetables of the EU Battery Regulation and China's tax rebate adjustment.
Power battery enterprises following automakers to go global are forming four replicable paths: forming joint ventures to bind major customers and exchanging investment for orders; building self-owned factories to radiate regional markets; going global in packages with automakers; and taking the lead at the resource end to build a local closed loop of nickel-cathode-cell.
For second-tier battery enterprises, the most realistic strategy is not to blindly copy CATL's heavy assets, but to bind a mainstream European automotive giant like Gotion, use a Thailand base to first capture the Southeast Asian market and then cut into Europe with a Hungary base like Sunwoda, or gain a first-mover advantage in compliance by borrowing the GBA battery passport pilot like CALB.
The export of 570,000 units is just a monthly figure. The real signal is that the tax rebate reduction, the China-EU price commitment, and the GBA battery passport landed in the same week: the global competition for Chinese NEVs has moved from the "complete vehicle export" stage to the stage of "reorganizing the industrial chain overseas according to local rules."
The moment automakers land in Thailand, Brazil, and Hungary, the competition for power batteries is no longer a capacity contest between Chinese factories, but rather competing on land outside China, using local workers, following local regulations, serving local automakers, and completely writing carbon footprint and due diligence data into a globally accessible battery passport.
This reshuffling of the layout has just begun.