China warns of battery industry overcapacity risks

China's industry ministry said on Thursday it had urged battery manufacturers to optimise industry capacity and mitigate risks of overcapacity.

The ministry highlighted the need to regulate market competition and enhance supervision within the electric vehicle and energy storage battery sectors, according to a readout of a meeting on Wednesday posted on its Wechat account.

Demand for energy storage batteries has surged as a result of the construction of data centres around the world.

The industry has blindly built out manufacturing capacity, the ministry said, echoing criticism of the solar sector where ballooning capacity led to sinking prices and industry-wide losses.

Reuters