by TIAN Heqi

China's electrolyzer manufacturers have launched their first coordinated effort to curb a worsening price war that has pushed most producers into losses and echoes similar pressures across the country's solar, battery and EV supply chains.

Electrolyzers, essential for producing green hydrogen, attracted rapid investment after becoming a policy priority. But capacity has expanded far faster than actual project demand. At a meeting in Inner Mongolia, more than 40 manufacturers and 120 supply-chain representatives endorsed a ten-point initiative organized by the Hydrogen Energy Industry Promotion Association. Signatories — including LONGi, Qing Jingji, Peric Hydrogen and Sinosynergy (09663.HK) — pledged to end below-cost bidding, avoid inflated technical claims and focus on innovation rather than further capacity expansion, including more disciplined pricing abroad.

Association secretary-general ZHANG Yu told Jiemian News nearly all producers are now loss-making. Of the fewer than 50 Chinese firms capable of bidding for major state-owned projects, almost 90% — 44 companies — have joined the initiative. Most firms compete in alkaline electrolyzers, the most mature and easily commoditized technology. More advanced PEM, AEM and SOEC systems have yet to reach volume production, leaving little differentiation and intensifying price undercutting.

Cost pressure has moved up the supply chain. Electrolyzers account for only a small share of total investment in green-hydrogen projects, and with wind and solar developers facing lower power prices and thinner margins, project owners have demanded cheaper equipment, longer warranties and higher retention payments — terms many private firms cannot absorb.

Prices have tumbled. Alkaline units that sold for about 3.4 million yuan in January were awarded at roughly 2.7 million yuan by September — a 21% drop in just eight months. A PEM/AEM producer said prices in those segments have fallen 30–50% from late last year, despite China's green-hydrogen market still operating at small scale.

Low bids are also spilling into overseas markets. Shuangliang Group president MA Fulin said some foreign developers are now asking Chinese suppliers to match China's deeply discounted prices, risking the erosion of margins abroad as well.

The industry move aligns with Beijing's broader effort to temper overinvestment in clean-energy sectors while maintaining growth in strategic technologies. Hydrogen has been identified as a priority in China's upcoming 15th Five-Year Plan (2026-2030), and recent regulatory guidance supports integrating green hydrogen with ammonia and methanol production. Inner Mongolia has separately outlined plans to pair hydrogen development with coal-chemical and carbon-capture projects.

Analysts say policy support may help steady expectations, but restoring pricing discipline will be critical. Zhang said the unusually high participation in the initiative reflects a shared concern over deteriorating economics: "This is no longer about gaining share. It is about ensuring the industry can survive."