The overall performance of the energy storage industry is under pressure as it continues to face the impact of a “cold wave.” In recent years, the energy storage sector has experienced rapid development. Currently, on one hand, the market is expanding quickly, and by 2025, leading battery companies are starting a new round of capacity expansion to meet the anticipated continuous growth in the energy storage market. On the other hand, competition within the industry is intensifying, leading to a fierce “price war.” Many companies, especially small and medium-sized enterprises, are facing severe challenges. If they cannot differentiate themselves in specific scenarios, they risk being eliminated from the market.
Industry analysts attribute the phenomenon of a “two-tier” market in the energy storage sector to several factors. While the ongoing global economic downturn and the increasingly complex international political environment have caused speculative impulses as capital seeks undervalued areas, the core issue lies in the fact that “the energy storage industry is still in its early, rough ‘pioneering stage.’ This has led to a mismatch and waste of resources, including technology, products, supply chains, and capital.”
Recently, several battery companies in the energy storage field, including CATL, BYD, Ruipu Lanjun, Zhongxin Innovation, Funeng Technology, Penghui Energy, Hichain Energy, Pylon Technologies, Zhuhai Guanyu, Hengdian Dongci, LG Energy, Samsung SDI, and SK On, have disclosed their performance for 2024. Battery China has highlighted advancements in energy storage from these companies, which may provide insights into the primary development trends of the industry.
1. Global Energy Storage Lithium Battery Shipments Surge, Some Companies Face Revenue Decline
According to statistics, the shipment volume of energy storage cells in the Chinese market is expected to reach **170 GWh** in 2024, a **146%** increase year-on-year. The shipment volumes for the U.S. and European markets are projected to be **78 GWh** and **50 GWh**, respectively. Overall, the global shipments of lithium batteries for energy storage continue to grow rapidly.
In terms of installed capacity, CNESA data indicates that the global newly added installed capacity for energy storage in 2024 will reach **177.8 GWh**, marking a **62%** year-on-year increase, with lithium-ion batteries remaining the dominant technology. In China, the construction of new power systems is accelerating, with over **100 GWh** of new energy storage installation expected, reflecting a **136%** growth year-on-year, thereby capturing **62%** of the global market share (based on energy scale).
Notably, a new wave of capacity expansion continues, with preliminary statistics showing that over **332 GWh** of new energy storage capacity has been planned in the first two months of this year, of which **282 GWh** is accounted for by lithium-ion storage batteries. This figure exceeds the total global new energy storage installation capacity from the previous year. The industry has reached a consensus that China’s energy storage sector has entered a challenging era of supply-demand imbalance.
From the recently released performance reports of various battery companies in the energy storage sector for 2024, some companies have experienced a decline in revenue, indicating that they are under significant pressure due to the “price war.” However, some companies have achieved impressive results despite the adverse conditions. For example, Ruipu Lanjun reported an operating income of **17.796 billion yuan** in 2024, a **29.4%** increase year-on-year, marking a historic high, while its net loss significantly narrowed to **1.353 billion yuan**, a **30.4%** reduction compared to the previous year.
CATL, a leader in lithium batteries, reported a negative revenue growth for the first time since its listing in 2018. According to its financial report, CATL achieved a total revenue of **362 billion yuan** in 2024, down **9.70%** year-on-year, while its net profit attributable to shareholders reached **50.7 billion yuan**, a **15%** increase. Interestingly, its energy storage systems business grew against the trend, generating **57.29 billion yuan** in revenue, which accounted for **15.83%** of its total revenue, with energy storage battery system sales reaching **93 GWh**, an increase of **34.32%**.
Despite CATL maintaining the top position in global energy storage battery shipments for four consecutive years from 2021 to 2024, its market share has declined gradually, standing at **43.4%**, **40%**, and **36.5%** over the past three years. Some analysts believe this may be due to leading system integrators fostering alternative cell suppliers to avoid over-reliance on a single battery manufacturer.
Hengdian Dongci reported an operating income of **18.559 billion yuan** in 2024, down **5.95%**, with a net profit of **1.827 billion yuan**, a slight increase of **0.46%** year-on-year. Meanwhile, Pylon Technologies, which has excelled in the overseas household storage market, also faced a revenue drop, with its operating income declining to **2.006 billion yuan**, down **39.19%**, and its non-recurring net profit showing a loss of **41.02 million yuan**, a **92.04%** decrease.
Pylon Technologies attributed its revenue decline to the complex and changing global economic conditions, a slowdown in industry growth, continued destocking by downstream companies, intensified industry competition, and pressure on the selling prices of energy storage products. Additionally, fluctuations in the international foreign exchange market significantly impacted its foreign exchange gains compared to the previous year.
Industry insiders have pointed out that Pylon Technologies’ deeper crisis stems from the fragile structure of the market, with **90%** of its revenue dependent on overseas markets, particularly as the growth rate for household storage in Europe has sharply declined. Even with the backing of a strong parent company, Pylon Technologies needs to refine its technology and business models in the energy storage sector to turn the tide. Furthermore, regarding cell costs, Pylon Technologies relies heavily on purchased cells, lacking a cost advantage, with some industry practitioners noting that leading companies can produce self-developed cells at costs that are **30%** lower than those of purchased cells.
2. Second and Third-Tier Battery Manufacturers Struggle to Survive
Chinese battery companies have demonstrated strong competitiveness in the international market due to their core technologies and supply chain advantages. Recent rankings of energy storage cell shipment volumes show that Chinese lithium battery manufacturers hold a dominant position. Concurrently, South Korean battery manufacturers like LG Energy, Samsung SDI, and SK On have also exhibited noteworthy capabilities.
However, according to the annual reports for 2024, SK On reported a loss of **1.127 trillion won** (approximately **5.57 billion yuan**), while both LG Energy and Samsung SDI experienced revenue declines exceeding **20%**, with net profits dropping by more than **70%**. Nevertheless, Samsung SDI’s energy storage systems business showed growth in 2024 and announced plans to further enhance its energy storage battery production capacity by 2025.
While leading battery companies face collective pressure, second and third-tier manufacturers are finding it increasingly challenging. Industry data indicate that the current average price for square lithium iron phosphate energy storage cells (280Ah type) is **0.304 yuan/Wh**, with the lowest price at **0.277 yuan/Wh**; for the 314Ah type, the average price is **0.306 yuan/Wh**, and the lowest is **0.272 yuan/Wh**. The average price for a 5MWh direct current battery cabinet is **0.43 yuan/Wh**. According to previous analyses by Dongwu Securities, the estimated cost of leading lithium iron phosphate cells is around **0.32 yuan/Wh** (excluding tax), while the cost for second and third-tier manufacturers is approximately **0.37 yuan/Wh**. This indicates that most second and third-tier manufacturers are operating at a loss, making profitability difficult in the short term.
As a result, a consensus is forming in the industry that the energy storage sector will undergo a significant reshuffle by 2025. Some opinions suggest that in certain core areas of energy storage, **80%** to **90%** of companies may be eliminated. Liu Jincheng, Chairman of Yiwei Lithium Energy, previously stated, “Battery manufacturers have already begun to differentiate in 2023, and 2024 will be a watershed year, with financial conditions becoming an important consideration for customers.” He emphasized that companies solely relying on low-price strategies will struggle to compete against top manufacturers with superior manufacturing capabilities.
Price competition is not a sustainable battleground. For second and third-tier battery companies, Liu believes they should return to the most fundamental capabilities of the industry, which is to enhance technology and quality levels. “Killing the price war has no future.” This is indeed the case; as new capacity is released and market demand slows down, competition and restructuring will intensify. Leading battery companies will engage in a new round of deep competition focusing on “technology + market + finance.” For second and third-tier manufacturers, professional analysts suggest that they either need to bind themselves to niche markets or face acquisition.
