China’s Power and Energy Storage Battery Industry Faces “Anti-Internal Competition” Push From Government

Multiple government departments in China just held a major symposium focused on the power and energy storage battery industry — and the message was crystal clear.

The central theme?

“Anti-internal competition” (反内卷 – fan nei juan).

In other words: stop killing each other on price.

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What Happened at the Government Battery Industry Symposium

According to reports from Cailianshe (财联社), several government departments jointly convened this symposium to address what’s becoming an increasingly thorny problem in China’s energy storage and battery sector.

Company insiders who attended the meeting revealed that government officials weren’t holding back.

The conversation centered on three main pressure points:

• Production capacity control — preventing overexpansion and overcapacity issues
• Price war management — stopping the race to the bottom that’s eroding margins
• Patent protection strengthening — protecting intellectual property and innovation incentives

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Why the Chinese Government Is Getting Involved

Here’s the reality: China’s energy storage battery market has exploded.

Players are multiplying faster than cell divisions in a petri dish.

And when there are too many competitors chasing the same prize, what happens?

Everyone starts cutting prices to gain market share.

Internal competition (内卷 – nei juan) becomes toxic.

Margins get compressed.

Innovation incentives dry up.

Companies that should be investing in R&D are instead throwing resources at cost-cutting and aggressive discounting.

It’s a spiral that benefits nobody except customers in the short term — and hurts the entire industry’s long-term health.

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The Three Pillars of the Government’s Battery Industry Strategy

1. Capacity Control: Keeping Overcapacity in Check

One of the key discussion points was managing production capacity.

Too much capacity floating around in the market is what enables price wars in the first place.

When supply massively outpaces demand, every company feels pressure to drop prices to fill their factories.

The government’s message: we need better coordination on who’s building what and when.

This isn’t just good for companies — it’s also about directing resources toward China’s strategic energy storage and EV transition goals.

2. Price War Management: Stopping the Margin Collapse

The price war discussion is probably the most visible issue.

Battery companies have been absolutely brutal with each other on pricing.

When you’ve got major players like CATL (Ningde Shidai 宁德时代), BYD (Bisaya 比亚迪), and dozens of mid-tier competitors all fighting for contracts, prices inevitably tank.

The government recognizes that unsustainable price competition ultimately undermines the entire sector.

It discourages investment.

It reduces profitability for companies that could otherwise spend more on innovation.

It makes the industry less attractive for new entrants with genuine technology advantages.

3. Patent Protection: Encouraging Innovation Over Imitation

The third pillar is strengthening patent protection.

This is interesting because it signals that the government wants the battery industry to compete on innovation — not just on who can manufacture cheapest.

Stronger IP protection means companies that develop breakthrough battery chemistries, manufacturing processes, or safety innovations can actually benefit from their investments.

It shifts competitive advantage away from who has the lowest cost structure and toward who has the best technology.

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What This Means for Battery Companies and the Broader Market

This government push is essentially a call for industry self-regulation.

It’s not (yet) hard regulation with fines and penalties — it’s more of a “hey, let’s talk about this” intervention.

But the message is unmistakable: Beijing is watching.

For companies in the energy storage battery space, this creates both constraints and opportunities:

• Constraints: You can’t just undercut competitors indefinitely without pushback
• Opportunities: A more rational market with less destructive price competition might actually be better for everyone’s bottom line

It also means the companies that will thrive are the ones that compete on:

• Technology and innovation
• Manufacturing efficiency (not just raw price)
• Supply chain resilience
• Reliability and safety
• Brand reputation and customer relationships

Not just whoever can sell batteries for the cheapest price.

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The Broader Context: Why Energy Storage Matters to China

Energy storage batteries aren’t just another manufacturing category.

They’re critical infrastructure for China’s energy transition.

As China ramps up renewable energy (wind and solar), energy storage becomes essential for grid stability and reliability.

It’s also core to the EV supply chain.

A healthy, innovative battery industry isn’t optional for China’s economic strategy — it’s foundational.

That’s why the government is willing to convene these symposiums and push back on destructive competition.

They want the sector to mature and consolidate into a smaller number of dominant, highly innovative players.

Not a sprawl of low-margin commodity producers.

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Key Takeaways

Here’s what you need to know about China’s power and energy storage battery industry right now:

• Government is actively intervening to combat “anti-internal competition” in the battery sector
• Three main focus areas: capacity control, price war management, and patent protection
• The goal: Shift competition from price-based to innovation-based
• The implication: Companies that can’t compete on technology will face increasing pressure
• The opportunity: More rational market dynamics could actually improve profitability for legitimate players

The energy storage battery industry in China is at an inflection point.

The days of racing to the bottom are numbered.

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References

• Cailianshe (财联社) – Insiders: Today’s Power and Energy Storage Battery Industry Symposium Still Revolves Around ‘Anti-Internal Competition’
• Ministry of Industry and Information Technology of the People’s Republic of China (Gongye he Xinxi Hua Bu 工业和信息化部)
• CATL (Ningde Shidai 宁德时代) – Industry Trends and Sustainability