Shares of lithium battery companies are trading lower across the board in Hong Kong, with notable declines seen in major players. Ganfeng Lithium Group Co.,Ltd. (01772) dropped 4.41% to HK$37.28, while CALB (03931) fell 3.84% to HK$20.02. CATL (03750) declined 3.15% to HK$630, and Tianqi Lithium Corporation (09696) slid 3.13% to HK$34.

On the news front, the lithium battery consumption tax is set to be reinstated starting in September. Analysts point out that the most immediate impact of this policy shift will be felt at the power battery production end. With the current battery consumption tax rate standing at 4%, a full resumption of collection will lead to a noticeable increase in the tax burden for battery manufacturers.

However, leading companies are expected to have the capacity to pass on most of these costs to automakers, while second- and third-tier manufacturers may be forced to absorb a larger share of the burden themselves. It is worth noting that Cui Dongshu, Secretary-General of the China Passenger Car Association, believes that the imposition of the lithium battery consumption tax will significantly benefit automakers with in-house battery research and production capabilities, further pushing mainstream carmakers to enter the battery manufacturing space.