The True Potential of Energy Storage: A Look at the Trillion-Yuan Revenue Supported by 400,000 People During Earnings Season

Real Energy Storage During Annual Report Season: A Trillion Revenue Supported by 400,000 People

In 2024, the new energy industry is facing significant challenges, with over 130,000 professionals in the photovoltaic sector losing their jobs. However, how does the crowded energy storage sector fare? We may gain a clearer and more realistic understanding of the energy storage landscape in 2024 through the financial reports of publicly listed companies.

According to incomplete statistics from the New Energy Industry, about 20 listed companies in the energy storage supply chain maintained a combined workforce of approximately 400,000 employees in 2024, showing little change compared to the previous year. In contrast to the dire situation in the photovoltaic sector, it appears that those in energy storage are experiencing relatively calm conditions. Nonetheless, there are significant disparities within the core areas of energy storage batteries, inverters, and system integrators. Leading companies continue to expand their workforce, while some are optimizing through layoffs due to strategic adjustments.

This trend is reflected in the performance reports of various listed companies. A review of the financial results from a total of 49 companies involved in energy storage batteries, inverters, and integration indicates that top-tier firms still dominate revenue and net profit rankings. The majority of profits within the energy storage battery and integration sectors are concentrated among leading manufacturers, resulting in a situation where “one is happy while nine are worried.” The performance among second- and third-tier companies varies widely, with many firms experiencing stagnation or decline in their energy storage business.

So, is energy storage still a lucrative sector worth entering? Perhaps the “80/20 rule” will become even more pronounced.

Top Manufacturers Dominate Energy Storage Battery Market

In the energy storage battery sector, publicly listed companies with revenues exceeding 10 billion yuan include BYD, CATL (Contemporary Amperex Technology Co., Limited), and EVE Energy. In our analysis of the 14 energy storage battery manufacturers for 2024, CATL alone reported a revenue of 57.29 billion yuan in its energy storage segment. This shows that CATL’s strength has effectively transitioned from its dominance in power batteries to energy storage.

While BYD has not directly disclosed specific performance figures for its energy storage segment, data from Gaogong Lithium Battery indicates that BYD ranked first in global shipments of energy storage systems (DC side) in 2024. However, it is noteworthy that the entire energy storage battery industry has generally entered a cycle characterized by “growth without revenue increase” and “revenue increase without profit increase.” Despite a dramatic growth in the global energy storage battery market, with shipments reaching 314.7 GWh in 2024 (a 60% year-on-year increase), leading companies like CATL have experienced declines in energy storage revenue. This is primarily due to a faster-than-expected decline in energy storage cell prices; for instance, the price of a 280Ah energy storage cell fell from 0.42 yuan/Wh in January to 0.30 yuan/Wh in December, marking a 28.6% drop.

The following is a summary of the performance of the 14 battery companies:

• In terms of revenue, there is considerable disparity among energy storage battery manufacturers. BYD, CATL, and EVE Energy are among those exceeding the 10 billion yuan mark in revenue. Nine energy storage battery manufacturers reported revenue growth, but seven experienced a year-on-year decline in growth rates. CATL reported a 4.36% decline, while some companies like Guoxuan High-Tech and Baichuan Co. experienced double-digit decreases, with Guoxuan High-Tech recording a nearly 100% drop.
• Regarding net profit excluding non-recurring items, 11 energy storage battery manufacturers achieved profitability, while six incurred losses. CATL led with 44.99 billion yuan in profit.
• In terms of profit growth, the top three energy storage battery manufacturers with over 100% growth were Guoxuan High-Tech, Zhongchuang Innovation, and Baichuan Co. Some companies recorded significant declines in profits.

Combining revenue and net profit excluding non-recurring items, there are seven battery manufacturers that achieved positive growth in both metrics: BYD, EVE Energy, Zhongchuang Innovation, Guoxuan High-Tech, Xinwangda, Zhuhai Guanyu, and Xiongtai Co. Meanwhile, companies like Penghui Energy and Desay Battery saw revenue increases without corresponding profit increases, while CATL and Baichuan Co. experienced profit increases without revenue growth. Companies such as Tianneng Co., Boliview, and Funeng Technology faced losses in both metrics.

Moreover, analyzing the gross profit margins of the 14 energy storage battery manufacturers reveals that high gross margin companies do not necessarily perform well in revenue or net profit. For instance, Boliview, despite having a high gross margin, recorded losses, citing reasons such as overseas inflation, intensified market competition, and demand decline due to inventory reductions. The impact of inflation, inventory reduction, and price declines is expected to continue into the first quarter of 2025, with many second- and third-tier energy storage battery manufacturers reporting poor net profit margins over two consecutive financial disclosure periods.

The price wars are ongoing. How long can energy storage battery manufacturers endure? At present, based on the operating cash flow, cash reserves, financial assets, inventory, and construction data of publicly listed companies from 2024 to the first quarter of 2025, energy storage battery manufacturers appear to have ample cash reserves. Notably, leading companies in the first and second tiers each have over 10 billion yuan in cash reserves, while giants like BYD and CATL hold over 100 billion yuan in cash.

Only a few firms reported negative cash flow from operating activities in the first quarter, such as Tianneng Co. with a deficit of 1.386 billion yuan and Penghui Energy, the only company to report a net outflow in 2024—these companies need to step up their efforts.

This polarization is also reflected in the pace of market expansion. From 2024 to the first quarter of 2025, data on ongoing projects and inventory indicate that leading companies like BYD, CATL, EVE Energy, and Guoxuan High-Tech continue to invest in capacity expansion, while second- and third-tier firms are starting to slow down and adopt a wait-and-see approach.

Diversified Competition in Energy Storage Inverters: Opportunities and Concerns

In the energy storage inverter market, competition has diversified with participants specializing in various areas, including power grids, electrical equipment, and industrial automation. Specifically, among the 25 listed companies in this sector, none achieved a revenue exceeding 10 billion yuan from their single inverter business. TBEA and State Grid NARI have a strong foundation in grid-related businesses, while Sungrow focuses on energy storage system integration, with its inverter revenue also encompassing other business lines, such as polysilicon products and wind/solar power plant construction and operation.

Among the inverter companies, 12 have crossed the 1 billion yuan revenue threshold (excluding TBEA, State Grid NARI, and Sungrow); GoodWe and Shenghong Co. are close to this mark with revenues of 935 million yuan and 857 million yuan, respectively. Other companies like Hemai, Huazi Technology, Xingyun Co., and Inovance Technology range between 100 million yuan and 500 million yuan.

In terms of revenue growth, 15 companies reported year-on-year increases, with New Power and YN Energy growing at nearly fivefold and threefold rates, respectively. However, several firms maintained single-digit growth, barely moving forward, while 10 saw declines, with Kestar recording a -49.43% drop.

When it comes to net profit excluding non-recurring items, 21 listed companies reported profits, with State Grid NARI leading at 7.389 billion yuan. Yet, only 10 companies saw positive growth compared to the previous year, with Xingyun Co., DeYe Co., and ShangNeng Electric experiencing the fastest growth rates. DeYe Co. benefitted from the emerging household storage market in Asia, Africa, and Latin America. However, despite Xingyun Co. achieving a 53.45% increase in net profit, it ended with a loss of 97.45 million yuan, while YN Energy, although growing rapidly, saw a 28.95% decline in net profit.

In terms of revenue and net profit excluding non-recurring items, only seven companies—Sungrow, State Grid NARI, DeYe Co., Sifang Co., Times Electric, Tongrun Equipment, and XJ Electric—managed to achieve both revenue and profit growth. Meanwhile, some companies faced significant declines in net profit growth, indicating that core businesses are showing signs of fatigue.

Looking back at 2024, the market for energy storage integration systems is highly competitive, exemplified by price wars. According to CNESA Datalink, the average bid price for domestic new energy storage systems was 628.25 yuan/kWh in 2024, a 43% decrease from the average price in 2023. Although by December, the average bid price had risen to 708.81 yuan/kWh (a 16% month-on-month increase), it still reflected a 10% drop compared to the beginning of the year and the same period last year. The ongoing price wars are a direct cause of the significant discrepancies in revenue and profitability among energy storage integrators.

Only six companies—Sungrow, Haibosi Chuang, Huabao New Energy, ShangNeng Electric, Tongrun Equipment, and State Grid Storage—achieved dual profitability, while three companies saw increased revenue without profit growth. This situation inevitably places immense pressure on the cash flow of energy storage integrators.

Among the 17 listed companies, the overall cash flow situation is not very optimistic. The number of companies reporting negative cash flow from operating activities increased from one in 2024 to 13 in the first quarter of 2025. Furthermore, the number of companies with net cash outflows from cash and cash equivalents rose from 10 last year to 12 in the first quarter of this year. While this may be attributed to short-term strategic investments, industry cycle fluctuations, or cost expenditures, some companies reporting negative cash flow from financing activities for two consecutive financial disclosure periods need to be cautious.

However, in terms of gross profit margins, energy storage integrators are not as adversely affected by price competition as one might think. Aside from Zhongtian Technology and New Power, which have single-digit margins, the remaining 17 companies maintain gross profit margins between 10% and 20%. Additionally, Huabao New Energy, Sungrow, Tongrun Equipment, and Aters have margins exceeding 30%. A key factor in this is that while energy storage integrators are embroiled in price disputes, they are also actively enhancing their market competitiveness through technological innovations, such as the gradual penetration of energy storage liquid cooling systems, which have created higher barriers to entry and lowered operational costs.

In summary, despite the fierce competition and price wars compressing some companies’ profit margins, energy storage integrators can still maintain stable growth due to their advantages in scale, technology, and distribution channels.

Conclusion

According to EESA, the global new energy storage installed capacity reached 79.2 GW/188.5 GWh in 2024, with China accounting for 56.83% of this figure. The installed capacity (GWh) has more than doubled year-on-year, solidifying China’s position as a leader in global energy storage development. Based on annual and quarterly reports from 49 companies in the energy storage supply chain, for those with advantages in technology and cash flow, energy storage remains a promising industry. Although energy storage battery companies may lag behind inverter manufacturers and integrators in terms of gross profit margins, compared to the photovoltaic sector, which has entered a micro-profit era and faced significant job losses, energy storage still offers some potential for growth.

The energy storage industry in 2024 presents a dichotomy: on one side are giants like CATL and BYD, continuing to expand with substantial cash reserves, while on the other side, second- and third-tier companies struggle for survival amid price wars. Fortunately, the significant growth in global installed capacity year-on-year has prevented the job loss crisis seen in the photovoltaic sector from repeating itself in energy storage. However, the challenges posed by the “80/20 rule” and cyclical fluctuations in the new energy industry may be unavoidable in the coming years.