Energy Storage Industry Enters Commercialization Phase as Companies Tackle Challenges

The energy storage industry is entering a pivotal year of commercialization as companies implement various strategies to tackle challenges. The 13th International Energy Storage Summit and Exhibition (ESIE 2025) opened in Beijing on April 10. This event is one of the largest annual gatherings in the energy storage sector, providing insights into key developments within the industry. According to reports from the event, 2025 marks a turning point for the Chinese energy storage market as it transitions from a phase of scaled development to comprehensive commercialization. Additionally, Chinese energy storage companies are facing significant challenges due to international trade tensions.

Yu Zhenhua, Executive Vice Chairman of the Zhongguancun Energy Storage Industry Technology Alliance, noted, “Today, China is undeniably a leader in the industry, both in market and technology. However, many companies still exhibit a follower mentality, lacking the responsibility of a leader.” He expressed the hope that Chinese enterprises would shift from a passive response to actively shaping international market rules, leveraging a three-dimensional approach of 'technology + market + finance' to transform external pressures into global leadership in energy transition.

China is leading the global energy storage market, which has been dominated by the U.S., China, and Europe for several years. The latest data presented at the summit indicates that China has maintained the highest capacity of newly installed energy storage systems for three consecutive years, with its share of the global market increasing annually. The “Energy Storage Industry Research White Paper 2025” released at the summit reveals that the global newly installed capacity for electricity storage projects is expected to reach 82.7 GW in 2024, marking a year-on-year increase of 59.0%. Combined, the U.S., China, and Europe will account for 90% of the global newly installed capacity, primarily driven by new energy storage technologies.

In the new energy storage market, China’s newly installed capacity represented 36.0%, 47.2%, and 59.1% of the global total in 2020, 2021, and 2022, respectively, showing a rapid increase in its market share. In 2024, China is projected to add 43.7 GW/109.8 GWh of new energy storage projects, reflecting a year-on-year growth of 103%/136%. In comparison, the U.S. is expected to reach 11.8 GW/31.2 GWh, growing by 35.1%/20%, while Europe will see 11.1 GW/21.1 GWh, a growth of 10.7%.

In 2024, Chinese energy storage companies secured contracts exceeding 150 GWh in overseas markets. Battery manufacturers accounted for over 100 GWh of these contracts, while solar energy storage companies contributed more than 30 GWh. The white paper suggests that, in the short term, the U.S. new energy storage supply chain will continue to heavily rely on overseas resources. The domestic lithium battery supply chain in the U.S. faces multiple challenges, including delays in resource development, lack of processing capabilities, and high costs. According to Clean Energy Associates, by 2025 and 2028, the U.S. is expected to have capacity shortfalls of 63% and 29%, respectively, with over 90% of energy storage battery shipments globally coming from Chinese companies. Therefore, at least 50% of the energy storage cells in the U.S. will need to be imported from China, indicating a sustained dependence on the Chinese supply chain.

As the energy storage industry enters a critical turning point, the “Notice on Deepening the Market Reform of the Grid Connection Pricing for New Energy and Promoting High-Quality Development of New Energy” (referred to as Document No. 136) issued by China’s National Development and Reform Commission and the National Energy Administration in 2025 has halted mandatory energy storage requirements, signaling a shift towards a new phase of commercialization in the sector. Xu Qingqing, Vice President of Sungrow Power Supply Co., stated that Document No. 136 is a long-term benefit for the energy storage industry, ushering the new energy sector into a fully market-oriented environment. The new energy storage industry is moving from a phase of market cultivation to one of value realization.

According to Zhu Suran, head of the system integration business at China Innovation Aviation, the market landscape in the energy storage field is undergoing a transformation. With the removal of mandatory storage requirements, the rationale for energy storage is shifting from “policy compliance” to “value anchoring,” with economic viability and the ability to generate returns over the entire lifecycle becoming the primary benchmarks for assessing a company’s core competitiveness. Chen Haisheng, Chairman of the Zhongguancun Energy Storage Industry Technology Alliance and Director of the Institute of Engineering Thermophysics at the Chinese Academy of Sciences, analyzed that over the past five years, some Chinese energy storage technologies have been internationally leading, and the standard system has gradually improved, resulting in various business models. In the next five years, the energy storage industry must develop autonomously, aiming for international technological leadership, a complete standard system, and mature business models.

During the rapid growth phase, the energy storage industry has also accumulated numerous issues and challenges that need to be addressed in the next stage. Yu Zhenhua noted that while the market is rapidly expanding, it is also facing severe internal competition, particularly stressing small and medium-sized enterprises. This “dual reality” is influenced by the ongoing global economic downturn and increasingly complex international conditions, leading to speculative impulses driven by capital searching for undervalued opportunities. However, the core issue lies in the early-stage, rough development of the energy storage industry, which has resulted in mismatches and waste of resources related to technology, products, supply chains, and capital.

Starting from 2025, the energy storage industry is expected to mature, demanding higher standards for technological innovation, cost control, and refined management capabilities. In response to both internal and external challenges, the white paper analyzes that new technologies will reshape cost advantages, create growth opportunities in emerging markets, and accelerate the internationalization of Chinese standards in the energy storage industry. By 2025, emerging markets in the overseas sector are anticipated to grow, with investments in new energy in Gulf countries accelerating and opportunities for local collaborations increasing. The demand for commercial and industrial energy storage in Southeast Asia and Latin America is also expected to surge.

Many emerging nations are establishing trade barriers through technological cooperation and joint ventures, requiring Chinese companies to adopt more flexible approaches to enter local markets. For instance, countries like India and Turkey are enhancing localization requirements, potentially mandating foreign companies to share core technologies, such as Battery Management Systems (BMS), which will test the intellectual property protection capabilities of Chinese firms. Resource-rich countries like Indonesia and Chile may shift from export restrictions to requiring foreign companies to bind local processing supply chains, compelling Chinese companies to adjust their overseas investment models.

On April 10, Gree New Energy announced a strategic cooperation agreement with South Korea’s ECOPRO, signed on April 9, to address current tariff challenges and global market competition. Both parties agreed to jointly establish an international green industrial park in Indonesia, which will encompass a core supply chain for secondary battery materials, including “nickel resources - precursors - cathode materials.” This project will collaborate with local companies such as PT Vale Indonesia Tbk to build a world-leading green ecological park for nickel resources and downstream industries.

Yu Zhenhua suggested that in 2025, Chinese companies should actively promote solid-state batteries, sodium batteries, and long-duration (hydrogen) storage technologies to become international standards. He emphasized the importance of creating a technology certification alliance in cooperation with countries along the Belt and Road Initiative. Additionally, companies should open up certain technologies for cooperation, exchanging technology licenses for market access in Europe and the U.S. to mitigate uncertainties.

From a domestic perspective, as the energy storage industry transitions into a self-reliant commercialization phase, companies are beginning to seek value increments in areas such as energy management and electricity trading. Xu Qingqing remarked, “I have always divided energy storage into dynamic and static components. For many years, the industry has focused on developing the ‘static’ aspects, such as increasing cell size and enhancing energy density, emphasizing ‘inefficiency elimination.’ However, after 2025, the ‘dynamic’ capabilities will become the competitive point for the energy storage industry, especially in providing intelligent dynamic services to a highly uncertain grid.”

Yu Zhenhua further analyzed that energy storage systems are fundamentally tools for adjusting both energy supply and demand, particularly through flexible energy management strategies on the demand side. This process involves the processing of energy data and algorithms. Currently, the industry lacks foundational data and appropriate algorithms, presenting significant opportunities for energy storage companies, especially small and medium-sized enterprises. By 2025, there is hope for more companies to ride the wave of deep integration between AI and energy storage.