Intense Competition in the Energy Storage Industry: Prices and Bids for Battery Systems Plummet as Manufacturers Race in Technology and Cost

The energy storage industry is entering a phase of intense competition, with both the scale and price of battery systems declining sharply. According to recent data from GaoGong Industry Research, in March 2025, the bidding scale for energy storage systems dropped by 55%, with bid prices entering the “0.3 yuan era.” The bid prices for energy storage system procurement ranged between 0.368 yuan/Wh and 1.050 yuan/Wh, with an average price of 0.463 yuan/Wh, marking a 21% decrease from the previous month. The lowest bid price was recorded for a direct current-side energy storage system project, priced at just 0.368 yuan/Wh.

Over the past two years, the energy storage sector has faced significant challenges, including falling lithium carbonate prices, structural overcapacity, and a strategy of “quantity for price.” This has led to a halving of cell prices, with system prices falling below cost and EPC (Engineering, Procurement, and Construction) costs being significantly compressed. As the price war intensifies, traditional integrators are under pressure, and there are growing calls within the industry for a return to rational competition. Industry insiders have reported that some major integrators are no longer participating in the largest industry exhibitions.

It appears that the previous fervor for large-capacity systems has diminished. Instead, companies are now focusing on upgrades such as liquid cooling technologies and diversified application scenarios. The trend of low prices is expected to continue.

Large Capacity Loses Its Appeal

At the recent ESIE 2025 Energy Storage Exhibition, several energy storage cell and integration manufacturers showcased liquid cooling and modular energy storage products. These included products from Sunshine Power’s industrial storage family, EVE Energy’s 6.9 MWh storage system, BYD’s Cube system, Haibo Technology’s liquid cooling battery pack, Rongjie Group’s 261 kWh commercial storage cabinet, Ganfeng Lithium’s 5.02 MWh liquid cooling prefabricated cabin, and New Source’s fully submerged commercial energy storage unit.

Currently, large capacity and size are not only prominent marketing terms for companies but also the focal point of discussions among industry professionals. Since 2023, energy storage battery products have transitioned from 280 Ah to over 300 Ah high-capacity cells. Numerous domestic battery manufacturers, including CATL and EVE Energy, are racing to launch cells with capacities exceeding 300 Ah, with some companies even venturing into 500 Ah, 600 Ah, and 1000 Ah capacities. Mainstream integrators are also following suit, upgrading standard 20-foot energy storage systems from less than 4 MWh to 5 MWh.

However, enthusiasm for larger sizes has noticeably cooled. A staff member at Kelu Electronics (002121.SZ) mentioned, “The mainstream still remains at 5 MWh. For commercial energy storage, it is essential to prioritize safety; currently, the dominant cell capacity is still 314 Ah, which was 280 Ah last year.” Wang Kai, the product director of Kelu Energy at Midea Group, stated in a group interview, “The competitiveness of future energy storage products will depend on a company’s profound understanding of the power grid and its ability to provide one-stop solutions. Although the development of large cells is a significant trend, what truly matters is the comprehensive strength of enterprises in research and development, manufacturing, quality control, and after-sales service. Providing high-quality one-stop solutions is the key for energy storage companies to succeed in market competition.”

He Hongyan, a storage solutions manager at Xinwanda, echoed this sentiment, saying, “Larger cells are not always better; we hope to see more innovative products. The energy storage industry should not be limited to just competing on technology; it can explore various application scenarios and business models as well.”

Technological Upgrades

The energy storage sector has undergone dramatic changes over the past two years, transitioning from a profitable landscape to one marked by losses. 2023 witnessed rapid development in energy storage, with China adding 21.5 GW of new energy storage installations, tripling the scale of new grid-connected capacity compared to 2022. This year also saw intensified competition among energy storage companies. From a market perspective, the prices of energy storage systems have continued to decline. According to data from the Zhongguancun Energy Storage Industry Technology Alliance, by December 2023, the average bid price for energy storage systems had fallen to 0.79 yuan/Wh, down 50% year-on-year and 48% lower than at the beginning of 2023, marking a historical low. Data from the Qianzhan Industry Research Institute indicated that the average bid price for energy storage projects fluctuated upward in 2022, with an average price of 2.64 yuan/Wh for EPC contracts in December.

The continuous decline in lithium carbonate prices has helped drive down the costs of energy storage products. However, the increasingly fierce price war among energy storage companies also contributes to the continual drop in bid prices. In this competitive environment, it seems that only those with larger product sizes can remain viable.

By 2025, energy storage technology is undergoing rapid updates. Liquid cooling technology is quickly replacing traditional air cooling as the mainstream choice, especially in the commercial energy storage sector, where it is becoming widely adopted. Liquid cooling utilizes fluids such as glycol solutions that come into direct contact with battery packs, facilitating rapid heat transfer and reducing temperature differences among cells, leading to improved accuracy in heat dissipation and temperature control.

A staff member from Inovance (002837.SZ) explained, “Most companies already have air cooling products. Showcasing air cooling products no longer offers any competitive advantage. Compared to air cooling, liquid cooling enhances energy consumption and efficiency, with significantly improved heat dissipation.” Reports indicate that several new products are set to enter mass production, with clients expected to favor liquid cooling products by 2025.

Inovance, established in 2005, is a leading manufacturer of cooling solutions and equipment, focusing on temperature control, and it holds the top position in energy storage temperature control. Financially, Inovance has remained unaffected by the fluctuations in the lithium battery cycle, with steady growth in both revenue and net profit over the past decade, and recent annual growth rates of 20% to 30%. The latest quarterly report revealed that Inovance achieved revenue of 2.872 billion yuan in the first three quarters of 2024, a 38.61% increase year-on-year, with net profit attributable to the parent company reaching 353 million yuan, up 67.79%.

Staff from Hemai (688032.SH) noted, “There are still some air-cooled PCS units available, but air-cooled direct current battery containers are virtually non-existent, as they have poor thermal performance and the charging and discharging of batteries requires strict environmental temperature controls. Therefore, virtually all have transitioned to liquid cooling, which may cost about 20% more than air-cooled containers.”

Low Prices Remain a Choice

As technological upgrades occur, the trend of low pricing continues. In 2024, the energy storage industry chain maintained the downward trend seen in 2023, with prices for cells, systems, and EPC contracts hitting historical lows. The average price of energy storage cells dropped from 0.9 yuan/Wh at the beginning of 2023 to between 0.3 and 0.4 yuan/Wh by August 2024. The average bid price for two-hour energy storage systems fell from 1 yuan/Wh in 2023 to below 0.6 yuan/Wh by August 2024, with some direct current-side systems priced as low as 0.58 yuan/Wh. The average bid price for lithium battery energy storage EPC contracts declined to 0.8 yuan/Wh in 2024.

In March 2025, data from GaoGong Industry Research indicated that the bid prices for energy storage EPC projects ranged from 0.566 yuan/Wh to 1.433 yuan/Wh, with an average of 1.027 yuan/Wh. Bidding for energy storage system procurement entered the “0.3 yuan era,” with prices ranging from 0.368 yuan/Wh to 1.05 yuan/Wh and an average of 0.46 yuan/Wh, representing a 21% drop from the previous month.

At Kelu Electronics’ commercial energy storage cabinet, several small advertisement boards read “0.588,” indicating the price for orders of twenty units, which includes equipment and on-site installation costs, using Ruipulan Jun (0666.HK) cells. If using CATL cells, the price would be around 0.65 yuan/Wh. Corin Electric (6603050.SH) showcased a new 135 kW/261 kWh liquid cooling energy storage cabinet, with the publicly announced price for the commercial storage unit starting at just 0.568 yuan/Wh. For some companies with costs around 0.6 yuan/Wh, these prices have dropped below cost.

Overall, the energy storage industry is navigating through a challenging landscape of price wars and technological upgrades, resulting in an accelerated reconfiguration of the market. In the future, companies that can effectively control costs, maintain technological barriers, and expand globally will demonstrate greater resilience.