US Vapes Warehouse Explosion China Vape Factories Closure

In 2025, a crisis triggered by the stockpile of vapes in the United States is rapidly spreading. The first batch of Chinese vape suppliers have begun to taste the bitter taste. With factory shutdowns, employee vacations, and tight funding chains plaguing the vast majority of vape factories.
Data from December 2025 shows that the inventory of vape products in major ports and distribution centers across the United States has reached a historical peak. And the backlog of products will take at least three months to fully digest.

The current situation of vape factories in China and the vape market in the United States

The vape inventory at the Port of Los Angeles has not yet cleared customs. In Shenzhen, China, which is separated by an ocean, another batch of vape products has been taken offline, packaged, and is waiting to be sent to the United States. The once bustling Shenzhen vape production line has gradually quieted down, while the price war on American shelves has just begun. The US Customs seized illegal vapes worth $81.5 million in Chicago alone by 2025, and this number is still increasing. Transformation compliance is no longer a multiple-choice question, but a life and death question. Whoever can survive in the gap between compliance and the market will be able to occupy a place in the new cycle of vapes. The reshuffle is quietly underway, who will be affected next in the US market?

The increasingly strict supervision of the US Food and Drug Administration, coupled with the gradual introduction of restrictive policies for vape products in various states, has led to increased market uncertainty

At a US port thousands of kilometers away from China, vape devices piled up in warehouses are waiting for customs clearance. This batch of goods has been lying at customs for more than half a month, and the shipper pays thousands of dollars in storage fees every day for it.
A salesperson who has been engaged in overseas warehousing of vapes for a long time said, “Starting from October 2025, the amount of incoming vapes in US warehouses will be significantly greater than the amount of outgoing vapes, and some warehouses have stored vapes for more than three months. According to the US warehousing fee standards, the longer the time, the higher the cost”.

In addition to intensified market competition, the PMTA registration laws that have come into effect in various states of the United States have made the inventory problem of vape companies even more severe

In this inventory crisis, some Chinese vape factories can no longer sustain themselves

There are rumors that the current backlog of vape products in the United States has exceeded 100 million, covering a full range of products from disposable vapes to rechargeable devices.
A leading e-liquid factory in China had to shut down early at the end of 2025 due to excessive orders in the second half of the year, resulting in direct consumption of production capacity. Production will only resume after New Year’s Day in 2026.
A vape brand focused on the US market has encountered difficulties in cash flow due to inventory backlog, and some employees have been notified to take a break and stop work. They stocked up heavily based on market forecasts last year, but with changes in US regulatory policies, market activity slowed down and products were stockpiled in warehouses. Warehouse expenses and capital occupation costs continue to increase, and cash flow is very tight. The pressure transmitted involves the upstream and downstream supply chains, such as plastics, hardware, atomizing cores, and downstream service providers.

Chinese vape companies are now adopting a wait-and-see and steadfast attitude

Faced with the confusion of the US market, different companies have adopted vastly different response strategies. A founder who has been deeply involved in the US vape market for many years said that most brands with low inventory pressure choose to wait and see, and hold their ground. The most crucial thing now is to defend their core states and fight a battle on the battlefield. This positional warfare strategy means that companies concentrate their resources in a few advantageous states rather than expanding nationwide. A state with a surrounding market is also large enough to support a small and medium-sized brand. Companies also need to adjust their product strategies and sales priorities according to different policies in each state to ensure competitiveness in the core market. However, the founder has always maintained a conservative and wait-and-see attitude towards whether to continue shipping vapes to the United States. The uncertainty of regulatory policies is another important reason for companies to remain cautious. The regulatory policies for vape products vary among different states in the United States, and federal legislation continues to advance. In this environment, conservative operation has become a natural choice for many companies.

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