China's New Battery Tax Hits Chilean Lithium Miner SQM

China announced a new consumption tax on lithium-ion batteries, ending a long-standing exemption in place since 2015. The tax starts at 2% in September 2026 and rises to 4% in 2027. This move sent shares of Chilean lithium miner SQM down 4% in Santiago on the day of the announcement, while the broader IPSA index also fell. SQM is a major supplier of lithium, a key component for batteries used in electric vehicles and electronics. Investors are concerned that higher taxes will increase costs for battery producers and potentially reduce demand for lithium. China is the world's largest electric vehicle market, so the policy could have global effects on supply chains and prices. The tax is part of China's efforts to regulate the battery industry and encourage more efficient use of resources. It applies to both domestic and imported lithium-ion batteries. The policy will take effect in over two years, giving companies time to adjust. SQM's stock drop reflects market uncertainty about future demand. The company has not commented publicly yet. Analysts will watch for further impacts on lithium prices and the broader battery supply chain. This is a developing story.