“China’s energy-storage batteries are expanding rapidly on the production side. This year’s output is expected to exceed 550 GWh, while power-battery output is approaching 1,000 GWh.” In an interview with Jiemian and other media, BloombergNEF energy-storage analyst Shi Jiayan provided the latest analytical figures. China’s energy-storage battery capacity is expanding quickly, with multiple companies announcing expansion plans. Upstream supply-chain price increases and vigorous demand at home and abroad downstream are together making the entire energy-storage track look thriving. What are energy-storage batteries? How should we understand the market drivers? How should we view the competitive landscape at home and abroad?
The Current Status of China’s Energy-Storage Battery Track
According to GGII (GGII Energy Storage Research Institute under GGII), China’s total shipments of energy-storage batteries reached 430 GWh in the first three quarters of 2025, already more than 30% above the full-year total for 2024. Full-year shipments are expected to reach 500 GWh, up 68% year on year, further consolidating strong demand momentum.
On the other hand, at the World Power Battery Conference held in Yibin, Sichuan on Nov. 12, 2025, Wan Gang, President of the China Association for Science and Technology, introduced that China’s power-battery sales reached 786 GWh in the first three quarters of 2025, up 48.9% year on year. Zhang Xiaofei, Chairman of Gaogong Lithium Battery, expects full-year power-battery shipments to exceed 1.05 TWh, which means that this year energy-storage battery output will reach half that of power batteries; compared with last year’s “30/70 split,” the importance of energy-storage batteries has become even more prominent.
Within this month, multiple companies have again announced expansion plans or implemented related moves, adding fuel to an already hot energy-storage track. Specifically:
- Chunen New Energy’s Xiangyang 70 GWh lithium-battery project (including 50 GWh energy-storage batteries and 20 GWh power batteries) has completed all geotechnical surveys; overall pile-foundation work is 80% complete. After reaching full production, annual output value will exceed RMB 30 billion (approximately USD 4.17 billion).
- Inovance Technology (SZ:300124): the Xi’an energy-storage and power-system manufacturing base has officially gone into production, with a designed annual capacity of 50 GWh; after reaching full production it can achieve annual revenue of about RMB 10 billion (approximately USD 1.39 billion) (caliber of energy-storage base + HQ R&D linkage).
- Hyper Strong (SH:688411) and CATL (SZ:300750) signed a Strategic Cooperation Agreement, stipulating procurement from CATL of a cumulative no less than 200 GWh of cell energy for 2026–2028.
- The Southwest Intelligent Manufacturing Center and R&D Center project of Hithium Energy Storage has officially broken ground, planning construction of 56 GWh of energy-storage lithium batteries and 22 GWh of energy-storage modules, with a total project investment of RMB 13 billion (approximately USD 1.81 billion).
Meanwhile, materials makers in the mid- and upstream across the industry chain are also benefiting significantly, with large orders signed one after another recently. For example, Longpan Technology (SH:603906) will increase sales of LFP cathode materials to Chunen New Energy with an expected total amount exceeding RMB 45 billion (approximately USD 6.25 billion); Tianci Materials (SZ:002709) will supply 725,000 tons and 870,000 tons of electrolyte respectively to CALB (HK:03931) and Gotion High-Tech (SZ:002074); Jiayuan Technology (SH:688388) will supply 626,000 tons of anode current-collector materials to CATL (SZ:300750), etc.
Energy-Storage Batteries Explained
First, what are energy-storage batteries? How do they differ from the relatively more common power batteries used in vehicles and other transportation tools?
| Energy-storage battery | Power battery | |
| Cell capacity | In continuous iteration: Gen-1 280 Ah, Gen-2 314 Ah, Gen-3 587–626 Ah, Gen-4 can reach 1,000–2,000 Ah | Stayed within 120 Ah before 2024; current mass production is 200–230 Ah, with an upper limit not exceeding 240 Ah |
| C-rate requirement | Low C-rate (typically ≤ 0.5C) | High C-rate (e.g., 2–6C for passenger cars) |
| Cell cycle life | In continuous iteration: before 2024 it was 6,000–8,000 cycles; in 2025 it reaches 8,000–10,000 cycles | Generally around 3,000 cycles; some can reach 4,000–5,000 cycles |
| Size specifications | Length 200–600 mm, width 500–1,000 mm, thickness 30–80 mm | Length 100–150 mm, width 200–220 mm, thickness 20–70 mm |
| Warranty indicator system | Uses cycle life as the core indicator; typically requires reaching a specified number of cycles when capacity retention is at 70% | Uses dual standards of time and mileage; the current mainstream is 8 years / 100,000 km, and may rise to 150,000 km in the future |
From the perspective of materials cost shares, energy-storage battery cells also differ: cathode materials account for 60%; structural parts 15%; electrolyte and anode materials 5% each; current collectors 10%; and separator costs 5%. At the same time, in the cost structure of energy-storage battery electrolyte, LiPF₆ accounts for 60%, pure carbonate solvents 30%, and VC (vinylene carbonate) as the only additive 10%.
Market Drivers for the Energy-Storage Battery Industry
The high-speed development of the energy-storage battery industry is closely related to the parallel driving of technological breakthroughs and market-based incentives.
Technological development has improved cell quality and cycling efficiency. Storage durations are shifting from mainly 2–4 hours to over 4 hours (currently ~20%). Combined with better cell quality consistency, one full charge and one full discharge per day can be achieved, extending utilization hours. Moreover, as raw-material prices such as lithium carbonate decline—driving cell prices down—the economics of long-duration pairing have begun to stand out.
Policy orientation has shifted from simple mandatory pairing to market-based incentive models. Early mandatory pairing policies required 1 hour of storage for 10% of installed capacity before grid connection, lacking incentives for adding more storage. The original intent was to solve the mismatch between intermittent renewable generation and electricity-use timing, preventing wind/solar curtailment, but it failed to generate effective economic returns for capacity-leasing models, and idle storage stations were quite common. Now, capacity tariffs and spot-market mechanisms provide positive incentives; especially in policy-favored regions such as Gansu, Inner Mongolia, Henan, and Hebei, profitability has become possible.
Specifically, energy-storage revenues mainly consist of three parts: capacity tariffs, spot-market peak-valley arbitrage, and frequency-regulation ancillary services. Capacity tariffs and spot-market arbitrage generally cannot be participated in simultaneously, and frequency-regulation ancillary services in China are still largely non-marketized. Capacity tariffs are settled based on actual throughput and provide a floor income, with settlement based on the actual charge/discharge capacity of the storage system; for example, a 2 MWh installed system can obtain the corresponding subsidy for each full charge and full discharge. Peak-valley arbitrage returns depend on the actual number of charge-discharge cycles per day and use a coefficient-adjustment mechanism to expand arbitrage space. Some regions use 1.5× or 2× coefficients to raise an original price spread of RMB 0.1 to an effective arbitrage level; when the normal electricity price is RMB 0.4 (approximately USD 0.056), the peak can reach more than RMB 1 (approximately USD 0.14), and the valley can be RMB 0.2–0.3 (approximately USD 0.028–0.042), forming a significant spread that incentivizes renewables to participate in the spot market.
Future Development Trends for Energy-Storage Batteries
From a technical perspective, energy-storage battery capacities are moving toward larger sizes, with 500–1,000 Ah specifications expected to account for 60%–70%; cycle life will rise to 10,000–15,000 cycles; first-pass yield will align with power batteries (yield 99%, Grade-A rate 97%). While large-capacity cells bring advantages in consistency, they also pose higher demands on safety and cycle life; how to ensure reliability is a factor that all market players must consider.
Regarding industry scale, experts interviewed by BCC believe that compared with power batteries, energy storage can maintain about four more years of high-speed growth, with particularly broad prospects overseas. Europe’s energy-storage market, driven by the energy-transition strategy and grid-stability needs plus national subsidy tilts, may maintain year-over-year doubling; North America’s market, with rigid large-scale storage demand, can still keep 20%–30% annual growth despite tariff impacts; Southeast Asia, South Asia, and the Middle East are still in the early stages, but demand is very active with great growth potential.
[Disclaimer]: The above content reflects analysis of publicly available information, expert insights, and BCC research. It does not constitute investment advice. BCC is not responsible for any losses resulting from reliance on the views expressed herein. Investors should exercise caution.