Mid-Year Turning Point for the Energy Storage Battery Industry Emerges

The energy storage battery industry may be on the verge of a turning point, as indicated by recent developments. A surge in demand for energy storage batteries, driven by a structural imbalance in lithium battery production capacity, is expected to peak between late May and early June before gradually cooling down. This situation has given rise to an industry transformation focused on technological upgrades and restructuring in overseas markets.

According to a technical director from a leading battery manufacturer in East China, the current market is experiencing a dual scenario of high-end capacity shortages alongside an oversupply of low-end products. While there is significant demand for energy storage cells with high safety and long cycle life, certain low-performance products are facing sales risks due to technological obsolescence. This structural imbalance has resulted in demand surges being concentrated on specific technological routes rather than reflecting an overall explosion in industry demand.

Notably, several companies are moving away from a reliance on scale worship. Internal strategic documents from a publicly listed company reveal plans to increase their R&D investment from 3% to 6% by 2025, focusing on next-generation technologies such as solid-state and sodium-ion batteries. “The era of purely pursuing GWh expansion is over,” stated the company’s board secretary, emphasizing that the new competitive landscape is shifting towards profitability and differentiated technology.

From a technological evolution perspective, three major directions are reshaping industry growth:

• Safety revolution: Accelerated development of inherently safe energy storage systems, with lithium iron phosphate and cascading utilization schemes becoming popular in overseas home storage markets.
• Efficiency breakthroughs: Liquid cooling system upgrades have increased energy density by 20% per unit space, with cycle counts exceeding 10,000.
• Cost innovations: Sodium-ion cell mass production is progressing faster than expected, potentially reducing BOM costs by 30% compared to traditional solutions.

As competition intensifies in the domestic market, leading companies are now looking towards more promising overseas markets. An international business leader from a technology innovation board company revealed that they have developed a “solar-storage-charging” integrated solution for the European home storage market, securing a 50MWh order as their first deal. Additionally, the demand for local supply chains spurred by the U.S. IRA Act has made the North American market a key battleground.

June could serve as a significant turning point, as noted by the chief analyst of new energy at a brokerage firm in North China. With concentrated capacity releases in the second quarter, the structural shortage issue is expected to ease, and the industry may transition into a phase of true growth driven by technology. Some listed companies have already begun financing through dual platforms, accelerating overseas capacity expansion and technological acquisitions to gain a first-mover advantage in new growth areas.

This surge in demand, initially sparked by capacity mismatches, will ultimately lead to an industry evolution characterized by technological revolution and global positioning. For investors, focusing on companies that can navigate cyclical fluctuations while making significant advancements at technological turning points may yield dividends in the restructured industry.