On July 18, according to reports from Financial Associated Press, China’s cumulative export volume of energy storage batteries reached 8.4 GWh from January to May 2024, a year-on-year increase of 50.1%, significantly higher than the 2.9% growth of power batteries during the same period.
In May alone, the domestic export volume of energy storage batteries was as high as 4 GWh, marking a year-on-year growth of 664%. According to data from the China Automotive Power Battery Industry Innovation Alliance, the export volume of domestic power batteries during the same period was 9.8 GWh, showing a month-on-month increase of 8.9% but a year-on-year decrease of 13.1%.
Slowing Electrification in Europe and America
The outpacing growth of energy storage battery exports over power batteries in the first five months of this year is not surprising.
A closer look reveals that the slowing year-on-year growth rate of power battery exports is somewhat related to the decelerating pace of electric vehicle transformation overseas.
Since 2024, major companies like Mercedes-Benz and Apple have announced delays or terminations in their electric vehicle businesses, casting a shadow over the rapid shift to electrification. The critical issue for Europe and America is not just the setbacks faced by these giants but the consequent decline in enthusiasm and the slowdown in transformation efforts.
Given the current scenario, the slowing pace of electrification in Europe and America naturally impacts China’s power battery exports, one of the "new three items" for exports.
Looking ahead, the impact of policies such as the U.S. Inflation Reduction Act and Europe’s Net Zero Industry Act introduces uncertainties in China’s power battery exports.
Global Energy Transition Drives Demand
From a technical perspective, energy storage batteries and power batteries are closely related. However, unlike power batteries, which are closely tied to electric vehicles, energy storage systems equipped with energy storage batteries have more diverse applications, including grid-side, power-side, and user-side applications. Nonetheless, the key driver behind the booming export of energy storage batteries is the accelerating global energy transition.
In recent years, as the global energy transition accelerates, the value of energy storage in mitigating the volatility and instability of renewable energy continues to increase. Public data shows that by the end of 2023, the cumulative installed capacity of new energy storage globally reached 91.3 GW, nearly double the capacity from the same period in 2022, indicating a promising growth trend.
China, Europe, and the United States are key markets for global energy storage, with China being the most significant. According to a research report by Zheshang Securities, in 2023, the combined new installed capacity of China, the United States, and Europe accounted for 88% of the global market, with China alone contributing nearly 50%.
Additionally, regions like Southeast Asia, the Middle East, Australia, South Asia, South Africa, and South America are also witnessing growing energy storage demands. For instance, as the share of renewable energy installations increases in the Middle East and Australia, their energy storage installations are also rising. Australia has set a clear target of adding 9 GW of energy storage capacity and 23 GW of renewable energy capacity by 2030.
Beyond the acceleration of green energy transitions, the growth in energy storage installations also contributes to energy equity. In markets like South Africa and Southeast Asia, where grid construction is not yet perfect, energy storage systems help address energy needs and ensure power supply.
Future Outlook
Wood Mackenzie predicts that the global new installed capacity of energy storage will reach 133.7 GWh in 2024, and the cumulative installed capacity will reach 1,607 GWh by 2030, with a compound annual growth rate of 36.81%. Given the leading position of Chinese companies in the global lithium battery market, the significant increase in China’s energy storage battery exports in the first five months of the year is logical.
However, aside from the growth in overseas energy storage demand, the impact of trade policy changes on energy storage battery growth should also be considered, with U.S. tariffs being a notable example.
In May this year, the Biden administration announced an increase in tariffs on electric vehicles, lithium batteries, photovoltaic cells, critical minerals, semiconductors, steel, aluminum, port cranes, and personal protective equipment imported from China, from the original 7.5% to 25%.
Nevertheless, the U.S. faces the challenge of an aging grid, with over 70% of transmission lines and power transformers in operation for more than 25 years. Given the high cost of grid upgrades, energy storage has become crucial for ensuring power supply and balancing peak and off-peak differences. Consequently, the Biden administration delayed the tariff adjustment for non-electric vehicle lithium-ion batteries, which the industry views as a window of opportunity for China’s energy storage market.
For instance, Haichen Energy signed a supply agreement with U.S. company Jupiter Power in June this year to deliver and deploy 3 GWh of battery energy storage systems by the end of 2025. Similarly, EVE Energy signed a strategic cooperation agreement with U.S. system integrator Powin to provide 15 GWh of battery products.
Positive Market Outlook for the Second Half of the Year
With strong market demand and high product cost performance, domestic energy storage companies achieved impressive performance in the first half of the year.
For example, Canadian Solar is expected to achieve a net profit attributable to shareholders of 1.2 to 1.4 billion yuan in the first half of the year, a 7% to 42% increase compared to the previous year. During this period, the company actively reduced the shipment volume of photovoltaic products and prioritized profitability due to the sluggish photovoltaic market. Its energy storage business performed particularly well, with an order reserve of 56 GWh of energy storage systems and signed contracts totaling $2.5 billion.
DeYe International achieved a net profit attributable to shareholders of 1.183 to 1.283 billion yuan in the first half of the year. The company saw sustained improvement in grid-connected demand in mature markets such as Brazil, India, and Germany, and a surge in household energy storage demand in emerging markets like Southeast Asia and the Middle East, leading to strong overall shipments and a steady increase in market share.
Sungrow disclosed its first-quarter report for 2024, showing a revenue of approximately 711 million yuan, a year-on-year increase of 14.71%, and a net profit attributable to shareholders of approximately 51.09 million yuan, a year-on-year increase of 39.91%. The company’s strong performance was mainly due to its robust energy storage business, particularly in bidirectional energy storage converters and system integration products.
Looking ahead to the second half of the year, companies that have established a foothold overseas are expected to continue to grow steadily. Given Trump’s strong election prospects and his preference for high tariffs, there is potential for further growth in the North American energy storage market. Companies with strong capabilities but slower overseas expansion might accelerate their overseas efforts in the second half of the year due to domestic price competition pressures.
The overseas market remains promising. In the European market, despite inventory pressure, favorable policies for residential energy storage installations continue to be introduced. For example, Austria’s second-round solar + storage subsidy budget plan adds an additional 40 million euros to the previously allocated 20 million euros.
Moreover, companies like EVE Energy, CATL, Ruipu Energy, Gotion High-Tech, Penghui Energy, Haichen Energy, and Far East Battery have signed energy storage system orders with overseas customers, with an estimated order volume exceeding 32 GWh.
The growth in overseas orders reflects the strong demand for energy storage abroad. For energy storage companies, competing in the international market may be more beneficial than engaging in domestic price wars. Compared to fierce competition at home, expanding abroad still offers some hope.
Source：Solarbe