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October 23, 2024 – China’s market regulator has escalated its antitrust oversight of the lithium battery industry, releasing six representative merger review cases in late August as part of a broader campaign to curb “irrational competition” and restructure the sector. The State Administration for Market Regulation (SAMR) has identified lithium batteries, alongside solar photovoltaics and new energy vehicles, as key areas for regulatory intervention — a move that directly impacts U.S. companies reliant on Chinese battery supply chains.
The campaign, which began in early 2024, signals a shift from lenient oversight to active enforcement. In April, the Ministry of Industry and Information Technology (MIIT) and three other ministries held a closed-door meeting with power and energy storage battery manufacturers, demanding stronger capacity monitoring, shorter payment terms for suppliers, and tighter control over product quality and intellectual property. The meeting also discussed a list of “irrational competitive practices,” including below-cost pricing and false advertising.
Since the start of 2026 — a target date set by regulators — lithium battery mergers will face a dual-track system: high-quality consolidation projects that revitalize idle assets and strengthen industrial chains will receive expedited approval, while concentrations that worsen destructive price wars or redundant investment will face stricter review. “We support lawful mergers that improve efficiency, but we will not tolerate anti-competitive behavior disguised as consolidation,” a SAMR official told state media.
One typical case is the joint venture between Cangzhou Mingzhu Plastic Co., Ltd. and Guangzhou Zengcheng Development Zone Eastern Center Investment Co., Ltd. for a wet-process lithium-ion battery separator project. The transaction received unconditional approval in May 2024, with regulators stating it would “optimize the industry’s competitive structure.” The case illustrates how China differentiates between efficiency-enhancing consolidation and anti-competitive concentration.
To handle the surge in merger filings, China expanded its delegated merger review program on August 1, 2024, adding Liaoning, Zhejiang, and Sichuan provinces to the pilot. Under the earlier program, cases were completed in an average of 17.5 days — well within the 20-day target. The expansion is expected to cut review times further, especially for small- and medium-sized deals.
China’s lithium battery antitrust push is not limited to domestic players. U.S. automakers and battery manufacturers that source from China — including Tesla, Ford, and LG Energy Solution — are closely watching the policy. Tighter oversight could lead to higher prices for Chinese-made battery cells, which currently dominate the global supply chain. The U.S. Energy Information Administration (EIA) estimates that China controls over 70% of global lithium-ion battery production capacity.
“If China forces smaller players to exit or merge, the remaining state-controlled giants will have even more pricing power,” said Dr. Michael Zhang, a supply chain analyst at the Peterson Institute for International Economics. “This could accelerate the U.S. push for domestic battery manufacturing under the Inflation Reduction Act.”
The SAMR has not yet issued specific guidelines for the 2026 antitrust review threshold for lithium battery mergers. However, industry insiders expect detailed rules by mid-2025. In the meantime, companies planning cross-border or domestic consolidation should prepare for heightened scrutiny, especially if their deals involve overlapping capacity or aggressive pricing strategies.
For U.S. investors and manufacturers, the key takeaway is clear: China’s lithium battery sector is moving from a free-for-all market to a regulated oligopoly. The winners will be those that align with Beijing’s goal of “efficiency first” — and that may mean smaller players will be forced to sell to state-backed champions.
