China’s Strong Demand for Energy Storage Batteries Leads to Orders Extended into Next Year

China’s Strong Demand for Energy Storage Battery Cells – Orders Extended Until Early Next Year

According to recent reports, the demand for energy storage battery cells in China is exceptionally robust, driven by the government’s new initiatives for large-scale energy storage development. Battery manufacturers have indicated that they are operating at full capacity, with some orders already extending into early next year.

The National Development and Reform Commission and the National Energy Administration of China recently unveiled a special action plan for the large-scale construction of new energy storage systems. This plan aims to achieve an installed capacity of over 180 million kilowatts by 2027, which is expected to stimulate direct investments of approximately 250 billion RMB.

As of the end of 2024, the total installed capacity of newly operational energy storage projects in China was only 73.76 million kilowatts. This indicates that the installed capacity for new energy storage systems is projected to grow more than twentyfold from 2025 to 2027.

The action plan emphasizes key developments in power generation, grid integration, and various application scenarios. Leveraging advanced technologies such as big data, cloud computing, and artificial intelligence, the plan aims to cultivate innovative applications in energy storage that are technologically advanced, promising for future applications, and easily replicable.

According to a report from CCTV, Zhang Jianhui, Chairman of Beijing Haibo Technology, mentioned that their company has been operating at full production and sales since the second quarter of this year. This surge in demand is attributed to booming overseas markets, which have led to a temporary shortage of quality production capacity. Additionally, the industry is transitioning from battery cells with a capacity of 314 amp-hours to those with 500 amp-hours and 600 amp-hours. He anticipates that as these high-capacity production lines begin operations next year, the current shortages may ease.

This year, the Chinese energy storage battery cell sector has faced significant challenges, with reports of a “shortage of battery cells” becoming commonplace. Market analyses indicate that both internal and external factors are contributing to this situation. Externally, the demand from overseas markets has surged due to the U.S. Inflation Reduction Act, which offers a 30% subsidy for energy storage projects. Simultaneously, the European home energy storage market is recovering, and large-scale storage projects in Australia and the Middle East are gaining momentum. In the first half of 2025, international orders for Chinese energy storage battery cells surpassed 188 GWh, showing a year-on-year increase of 100%.

Internally, factors such as the aforementioned action plan and the previous “531 rush to install” policy (which encouraged a rapid installation of new energy systems following the introduction of new pricing for renewable energy on June 1) have significantly boosted the installed capacity. In the first half of 2025, China added 55.2 GWh of new capacity, representing a 76.6% increase year-on-year. The reform of renewable energy pricing has shifted the focus of energy storage from being “policy-driven” to “market-driven.”

Reports indicate that in 2024, the utilization rate of China’s battery industry will remain below 35%, and companies are hesitant to invest in capacity expansion. However, with demand expected to exceed forecasts in 2025, leading firms have already achieved utilization rates exceeding 90%. Given that capacity expansion typically requires 6 to 12 months, it will be challenging to alleviate supply tensions in the short term.

According to a report from the Securities Daily, He Zhuoxin, a researcher at the China Chemical and Physical Power Industry Association, noted that the global market for energy storage battery cells is primarily dominated by the top ten Chinese companies. The competitive advantage of Chinese firms in producing large capacity cells of 300 Ah+ is becoming increasingly pronounced, enhancing their competitiveness in the energy storage battery market.