China EV Battery Installations to Log Strong Growth This Year — Market Talk

Chinese solar stocks jumped, while battery shares slid on Monday. "Chinese Solar, Battery Stocks Slide After Beijing Plans Export Tax Rebate Cuts--Update," at 04:20GMT, incorrectly said that stocks in both sectors fell.

By Jiahui Huang and Jason Chau

Chinese solar stocks rose sharply after authorities unveiled plans to cancel export tax rebates on some solar products, a sector that has faced severe overcapacity, while battery stocks fell amid investor concerns over higher costs for overseas shipments following the policy move.

Shares of Trina Solar closed 8.6% higher in Shanghai, while Jinko Solar gained 3.6%. JA Solar Technology and Longi Green Energy Technology also ended the day up 3.4% and 4.6%, respectively.

Meanwhile, shares of Chinese battery giant CATL, listed in both mainland China and Hong Kong, fell by nearly 5% on Monday morning before closing more than 2% lower. Shares of smaller peers, including Eve Energy, Gotion High-Tech and Sunwoda Electronic, also declined.

The moves followed a statement Friday from China's Ministry of Finance saying export value-added tax rebates for solar and related products will be eliminated starting April 1. The rebate rate for battery and related products will be cut to 6% from 9% for the period from April 1 to Dec. 31.

Beijing has stepped up efforts in recent months to address overcapacity across parts of the Chinese economy, including the solar, battery and automobile sectors.

"We are not surprised about the policy adjustment, especially after the previous round of refund rate cut in 2024," Nomura analysts said in a note. China's total export value in the first 11 months of 2025 was $26 billion, including solar cells and modules, the analysts said.

In response, solar-module manufacturers could raise average selling prices in markets such as Europe, while export demand in regions including Southeast Asia may come under pressure, according to Nomura.

The analysts also said leading battery makers may pass the higher costs on to downstream customers, particularly in the U.S. and Europe, while mitigating the impact through localized production in export markets, such as CATL's new plant in Hungary.

"We believe the impact is more controllable given a longer policy transition period," they added.

China previously cut the export value-added tax rebates for solar and battery products to 9% from 13% on Dec. 1, 2024.

Write to Jiahui Huang at jiahui.huang@wsj.com and Jason Chau at jason.chau@wsj.com

Goldman Sachs expects China's 10 large cap private enterprises to perform well in 2026 and beyond, thanks to an easing regulatory stance toward the private sector and breakthroughs in AI. These companies, namely Tencent, Alibaba, CATL, Xiaomi, BYD, Meituan, NetEase, Midea, Hengrui and Trip.com, are seen to further increase their dominance in China's stock market, similar to the Magnificent 7 stocks in the U.S. The group, dubbed the Chinese Prominent 10, is forecast to deliver earnings growth of 13% on a compound annual basis in 2026-2027. GS also sees scope for further global market-share gains by Chinese companies, citing export strength. About half of the Chinese Prominent 10 are well positioned to benefit, given their strong balance sheets, cash flows, scale advantages and leading technologies, they say. (jason.chau@wsj.com)

Hong Kong is set to reclaim the global IPO crown for 2025, KPMG says. The Hong Kong IPO market is projected to raise HK$272.1 billion across 100 listings. That would represent a 210% increase in terms of funds raised compared with 2024. Growth has been driven by increasing numbers of Chinese companies seeking dual listings in Hong Kong, which accounted for half of total IPO funds raised, according to KPMG. Chinese battery giant CATL raised HK$41.0 billion, making it the world's largest IPO this year, it notes. Paul Lau, head of capital markets and professional practice at KPMG China, expects this trend to continue into 2026, with AI-related listings poised to accelerate as the technology matures. (sherry.qin@wsj.com)

Chinese battery manufacturers are expected to capitalize for some time on rising demand from U.S. developers of energy-storage systems, despite the limitations that the One Big Beautiful Bill Act imposed on the use of Chinese equipment in clean-energy projects, according to Jefferies. The investment bank cites battery makers CATL and Sungrow as "best positioned" to benefit. "While foreign-entity-of-concern requirements pose challenges, we expect continued deployment of Chinese [battery systems] via safe harbored inventory procured prior to Jan. 1 2026," when such restrictions for new projects become effective, the investment bank says. "Chinese systems remain meaningfully cheaper and more advanced in energy density and efficiency," Jefferies adds, pointing to an uptick in Chinese exports as evidence of its view. (luis.garcia@wsj.com; @lhvgarcia)

By Jiahui Huang

Shares of Chinese battery maker Contemporary Amperex Technology rose sharply in Hong Kong and Shenzhen, after CATL's deal with an energy storage-system manufacturer boosted sentiment about the battery sector.

The company's Hong Kong-listed shares closed 3.2% higher at 567.50 Hong Kong dollars, equivalent to $73.02, on Thursday. Its Shenzhen-listed shares closed 7.6% higher at a record 415.60 yuan, or $58.43.

The gains came after CATL signed a 10-year partnership with Beijing HyperStrong Technology, the leading manufacturer of energy storage systems worldwide. HyperStrong said that it will buy up to 200 gigawatt hours of battery energy storage systems from CATL between 2026 and 2028.

Beijing HyperStrong Technology closed 20% higher, hitting the Shanghai Stock Exchange's daily trading limit.

Considering it is the fourth quarter, the peak season for EV manufacturing, the pricing of the ESS contract was likely set at an advantage to CATL, Morningstar senior equity analyst Vincent Sun said.

The gains were also likely driven by news that the national standard for solid-state batteries will be released soon, which would benefit the development of the solid-state battery industry, Sun added.

"After two years of disciplined capacity growth, the battery sector is entering a new expansion phase," said HSBC Global Research analysts led by Yuqian Ding in a recent note. The rebalancing of supply and demand has slightly increased battery and supply chain pricing from trough levels, they said.

Demand is surging across the energy storage system and EV segments, they said. China's battery energy storage system sales in the domestic market reached 211 gigawatt-hours in the first nine months of this year, they added.

The deal between HyperStrong and CATL added to signs of stronger demand for battery energy storage systems in the next few years.

The battery maker maintains a leading position in its home market of China. It held a 46% share of the EV-battery industry in October, according to data from the China Automotive Battery Innovation Alliance. CATL is also a top battery supplier for major automakers, counting Tesla, Volkswagen, BMW and Geely among its clients.

Write to Jiahui Huang at jiahui.huang@wsj.com