Chinese electric vehicle (EV) manufacturers and battery makers are reportedly negotiating over who will bear the reinstated consumption tax on lithium-ion batteries, according to industry sources. Beijing ended an 11-year exemption on the 4% consumption tax for lithium-ion batteries and related products on September 1, reinstating a 2% tax rate, which will fully revert a year later. Battery manufacturers initially planned to pass on the costs to downstream customers; for example, EVE Energy had planned to add a 2% consumption tax to domestic orders shipped after September 1. However, EV manufacturers, facing squeezed profits amid reduced subsidies and weak domestic market demand, have resisted, leading to weeks of ongoing negotiations.