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China's Ministry of Industry and Information Technology has urged battery manufacturers to curb capacity expansion to mitigate overcapacity risks in the electric vehicle and energy storage sectors. This warning, which highlights the need for industry optimization and regulation, reflects a shift in Beijing's industrial policy towards prioritizing quality and sustainability over mere output growth. As demand for energy storage batteries surges, the ministry's intervention may lead to tighter scrutiny of production, potentially benefiting larger firms while impacting the broader battery and EV supply-chain stocks.