Global demand for electric vehicles (EVs) and energy storage, lifted by the energy crisis, is pushing China's battery industry to new highs, even as EV sales slow at home. Chinese firms supplied roughly three-quarters of the world's EV batteries in the first half of 2026, while a parallel grid storage sector is booming at home and abroad. Amid fierce competition in Chinese cleantech, batteries stand out as one bright spot with strong demand and healthy returns. But that has drawn a crowd, and battery manufacturing capacity is set to swell. Beijing is now pulling various levers to rein in excess.