Breaking Through Three Challenges for the New Energy Storage Industry to Expand Internationally
As the global energy sector shifts towards green and low-carbon solutions, the new energy storage market is experiencing rapid growth. The International Energy Agency predicts that global installed energy storage capacity will reach approximately 270 GW by 2026. For China’s new energy storage industry, international markets represent a critical battleground, making overseas expansion an inevitable trend.
Recently, reporters from Outlook News Weekly gathered insights from various regions, including Anhui and Jiangsu, where several new energy storage companies are leveraging continuous technological innovation and a robust supply chain to explore emerging markets. This effort supports the internationalization of new energy storage solutions, contributing significantly to the global transition towards green and low-carbon energy.
As the overseas market environment grows increasingly complex, Chinese energy storage companies face challenges such as intensified competition in technology development, new trade barriers, and outdated standards. Industry insiders suggest that tackling key core technologies, improving technical standards and systems, and establishing collaborative mechanisms can help overcome the three main challenges: technological, standardization, and collaboration.
Advantages of Expanding Internationally
As a leading company in the renewable energy sector, Sunshine New Energy Development Co., Ltd. is seizing the opportunity for transformation by adopting a dual strategy of domestic and international operations. The company has rapidly expanded its overseas business to over twenty countries, including Kazakhstan, Australia, and Spain.
“The new energy storage market has vast potential. Our company is continually increasing R&D investments, focusing on the integrated development of wind, solar, hydrogen, and storage technologies. We are accelerating breakthroughs in core technologies and collaborating with local partners to explore new markets for mutual benefit,” said Liu Bin, the company’s Business Director. Thanks to its core technological advantages and a comprehensive domestic supply chain, the company is making significant progress in its international ventures.
In the race for overseas markets, new energy storage companies are showcasing their development potential and competitiveness through technological, industrial, and strategic advantages.
Technologically, China’s new energy storage industry encompasses diverse technological routes, including lithium-ion batteries, compressed air energy storage, flow batteries, solid-state and semi-solid-state batteries, and sodium-ion energy storage. “China’s new energy storage technology is generally at the forefront internationally, providing high-performance energy storage products to the global market,” stated Liu Yanlong, former Secretary-General of the China Chemical and Physical Power Industry Association. For instance, in the realm of lithium batteries, China possesses a complete industrial chain, substantial cost advantages, and a skilled workforce, commanding over 75% of the global market share.
According to statistics from the China Chemical and Physical Power Industry Association, the cumulative export of lithium-ion batteries from China reached 3.914 billion units in 2024, marking an 8.1% increase year-on-year.
From an industrial development perspective, the continuous evolution of various technologies has expanded different application scenarios, extending the energy storage industry’s supply chain. The completion of a 300,000 kW compressed air energy storage power station has promoted the research and application of domestically produced large-capacity air compressors, placing China’s compressed air energy storage technology at the forefront globally. The implementation of sodium-ion battery storage projects has further deepened the exploration of large-scale sodium-ion energy storage applications, while multiple regions have established grid-connected energy storage projects, effectively enhancing the ability of new energy storage to support the safe and stable operation of power grids.
Three Major Challenges for International Expansion
Despite the rapid international expansion of new energy storage companies, the industry faces three significant challenges: intensified competition, new trade barriers, and outdated standards.
Competition in the global energy storage sector is intensifying. As countries accelerate their transitions to green and low-carbon energy, they are eager to capture market opportunities. Industry insiders indicate that while China’s energy storage sector has multiple advantages, the rapid pace of technological innovation means that those who gain an early technological advantage will dominate the global market.
For example, solid-state battery technology, regarded as a crucial development direction for next-generation energy storage, has become a competitive target for countries such as the United States, Japan, and those in Europe. Each nation is striving for advancements in the research, industrialization, and commercialization of solid-state batteries to seize market leadership and foster growth in related supply chains.
Trade barriers are also hindering industry expansion. Industry insiders report that the European Union has introduced new policies, such as the Critical Raw Materials Act and regulations on batteries and waste batteries, while the U.S. has imposed tariffs on China’s lithium battery exports. These developments, alongside the rapid emergence of new green trade barriers, pose significant challenges for China’s energy storage sector.
Liu Yanlong notes that the U.S., one of the world’s major energy storage markets, has been accelerating the establishment of its domestic supply chain. The U.S. Inflation Reduction Act and its related regulations promote local procurement of lithium batteries and their core materials, while restricting Chinese companies from investing in manufacturing plants on U.S. soil. Additionally, lithium battery exports are facing increasingly stringent “green” standards. According to the EU’s carbon footprint accounting rules for batteries, relevant battery manufacturers must establish effective carbon footprint management systems to accurately measure and report emissions. However, China currently lacks comprehensive standards for carbon footprint accounting and data on battery carbon footprints.
Outdated standards are also affecting the industry’s high-quality development. Companies report that participating in international competition requires adapting to new global market rules and changes. The lagging standards have become a bottleneck for companies seeking to expand internationally and negatively impact product quality.
Industry insiders argue that domestic energy storage products lag behind international mainstream standards in critical indicators such as thermal runaway management and fire protection. For instance, Europe requires energy storage systems to pass stricter “thermal propagation” tests, which forces Chinese companies to invest additional resources in research and testing, diminishing their price competitiveness and potentially causing them to miss bidding opportunities in overseas markets.
“The safety of energy storage batteries is crucial for the sustainable development of the industry. Product safety involves manufacturing, management systems, and system integration, necessitating a comprehensive testing and evaluation standard system,” Liu Yanlong said. The current standard system lags behind the speed of industry development, hindering expansion into overseas markets.
Additionally, outdated standards contribute to chaotic competition. Exporting companies report that disorganized competition among domestic manufacturers has driven down cell prices from about 1 yuan per watt-hour two years ago to as low as 0.4 yuan per watt-hour.
Establishing New Pathways for International Expansion
To address the challenges faced by new energy storage companies in their international endeavors, industry insiders recommend accelerating the development of key core technologies, enhancing internal motivation, improving technical standards and industry regulations, and building multi-channel collaboration and communication platforms to better support the international expansion of new energy storage companies.
Focusing on key competitive areas, it is essential to accelerate technological research and development. Liu Yanlong suggests that there should be increased policy support for the development of key technologies and materials, especially in next-generation battery technology, where countries like the U.S., Japan, and South Korea are rapidly catching up. Relevant authorities should enhance support for leading research institutions and enterprises, focusing on next-generation battery technology and new materials to maintain the technological edge of the energy storage industry.
From the perspective of the companies themselves, enhancing internal motivation remains a crucial development strategy. Sha Aimin, Deputy General Manager of Shanghai Haiowei New Materials Co., Ltd., advises that small and medium-sized new energy enterprises should abandon the “borrowed” approach to technological innovation and actively shift their mindset to improve R&D and operational management capabilities.
Moreover, Sha Aimin suggests that the future could see a combination of mobile and residential energy storage as one method for energy storage products to expand internationally. Companies should transition from solely providing residential solar energy storage solutions to offering comprehensive energy storage solutions tailored to individual needs, continuously exploring new opportunities in foreign markets.
To proactively respond to changes in foreign markets, it is important to enhance the industry regulatory framework. From a top-level design perspective, relevant authorities should further refine technical standards and management systems in areas such as product safety and low-carbon environmental protection.
Chen Derong, Executive Dean of Central Research Institute at GCL-Poly Energy Holdings Limited, advocates for the establishment of effective technical standards and a carbon emission management system for new energy storage products, as well as participation in the formulation of global carbon neutrality rules to elevate China’s influence in trade rule-making. Additionally, industry production norms should be improved, and rigorous testing and certification processes for export products should be enforced.
Industry associations should play a vital role in fostering consensus and establishing development norms. Yang Bao, Global Marketing President of Trina Solar Limited, emphasizes the need for relevant authorities to organize industry associations and companies to strengthen self-discipline and oversight, avoiding industry “involution” while enhancing patent protection to prevent core technology leakage.
Furthermore, fostering collaboration both domestically and internationally will create favorable conditions for companies to expand overseas. Some critical raw materials for energy storage batteries have a high dependence on international sources, necessitating strengthened cooperation with resource-rich nations to enhance the environment for international expansion. Liu Yanlong suggests constructing an international market information exchange platform to provide small and medium-sized enterprises with technical support and consulting services for overseas market exploration.
Finally, leading industries must broaden their approach to internationalization, transforming product exports into technology exports, and establishing overseas joint ventures. Sha Aimin asserts that as industries align with international technical and environmental standards, upstream and downstream enterprises should collaborate and support each other in international markets. Relevant departments, chambers of commerce, and financial institutions should provide robust services, while state-owned enterprises abroad can form investment funds to better adapt to new international market conditions.
