Changes to battery taxation in China could help accelerate the development and commercialisation of next-generation battery technologies, with a potential impact on the future electrification of HGVs and commercial vehicle fleets.

That is one of the implications of a new update to the International Energy Agency’s annual Global EV Outlook, which examines how changes in battery technology, manufacturing and costs could affect the road transport sector.

The IEA says road vehicles account for almost half of global oil consumption, leaving the sector particularly exposed to fuel price spikes and supply disruption. While much of the report focuses on passenger cars, developments in battery technology are also highly relevant to the commercial vehicle sector, where vehicle range, payload, charging times and battery weight remain key considerations in the move towards electrification.

Electric vehicle sales are expected to account for 29% of global car sales in 2026, but the development of cheaper and potentially more energy-dense batteries could also have implications for heavier vehicles, where the limitations of current battery technology can be more challenging.

China already occupies a leading position across much of the global battery supply chain, and the IEA says the gap between average battery prices in China and those in Europe and North America has widened over the past year.

New Chinese rules published in July could further influence the direction of battery development. Consumption taxes on batteries are due to be phased in from April 2027, starting at 2% and rising to 4% in April 2028.

However, the tax will apply to mature battery technologies, notably lithium-ion batteries, while sodium-ion and solid-state batteries will remain exempt until the end of 2028.

The IEA says the exemption is intended to provide an incentive to develop and commercialise the newer technologies.

For HGV manufacturers and operators, the development of alternative battery chemistries could prove significant. Batteries that offer improvements in energy density, cost, charging performance or weight could help address some of the challenges currently associated with electrifying heavier commercial vehicles.

The IEA says Chinese battery manufacturers have achieved their cost competitiveness through large-scale production and what it describes as “learning-by-doing”, while China’s integrated domestic supply chain has further reduced costs by limiting inefficiencies and reliance on imports.

The report suggests these advantages could increasingly benefit emerging battery technologies as they move towards commercial production.

For the road transport industry, the development of solid-state and sodium-ion batteries therefore represents more than a passenger-car trend. If the technologies can achieve the required combination of cost, energy density, durability and charging performance, they could eventually broaden the range of commercial vehicle applications where battery-electric power is viable.