A global increase in renewable energies and demand from the data center feeds a boom in the use of batteries for storage on electrical networks, creating a new front in the battle between Chinese and South Korean companies that have dominated cellular production for electric vehicles.
Fueled by a rapid increase in demand within China itself, Chinese batteries represent almost 90% of the global capacity of energy storage systems (ESS), including a market share of more than 80% in the United States and more than 75% in Europe.
But after having undergone an American price of 11% last year, the total now imposed by President Donald Trump and his predecessor Joe Biden mean that Chinese battery companies are in fact faced with a rate of 155.9%, which should increase to 173.4% next year – offering hope to Korean battery companies that try to organize a return to the United States and Europe.
Energy storage systemsComposed of battery module racks regulated by management software, help national electricity networks – as well as houses, businesses and individual factories – to operate the fluctuation in wind and solar energy supplies.
They also provide a safeguarding power for the grids which become under the pressure of intensification during the next decade due to the energy requirements of the equipment linked to artificial intelligence and clean technologies such as electric vehicles and heat pumps.
According to a report by the International Energy Agency published this month, global electricity demand for AI data centers should more than double over the next five years and will represent almost half of the growth in American electricity demand by 2030.
“Energy storage is often considered the least sexy aspect of the renewable energy industry,” said Iola Hughes, research manager at Battery Consultancy Rhotion. “But it is technology that will prevent countries from living current breakdowns in the years to come.”
ESS increased to 20% of the global 5% battery market in 2020, according to Rho Motion. After the global battery storage capacity increased by 52% between 2023 and 2024, the Council provides that it will now be more than doubled by 340 hours of gigawatt storage last year at 760GWH in 2030 – equivalent to the batteries of 7.6 million combined electric vehicles.
The booming sector has also helped Tesla to compensate for sales of disappointing electric vehicles with an increase in those of its energy storage systems – the power wall for domestic use and the megapack on a network scale. Last year, Tesla director general, Elon Musk, told a call for results that ESS “grew up as forest fires”.
However, Tesla is still based on other battery manufacturers, mainly China CATL, to provide cells for its products due to persistent problems to increase the production of its internal 4680 batteries. Its financial director Vaibhav Taneja warned this week a “disproportionate” impact of prices on her energy storage activities while working to reduce her dependence on China. “It will take time,” he said.
Hughes noted that Korean battery manufacturers had once directed the sector when they specialize in the “high nickel” batteries, which offer higher energy density than lithium iron phosphate (LFP) batteries preferred by Chinese manufacturers.
But a series of fires involving Korean batteries with high nickel, associated with the rise in Chinese Chinese alternatives cheaper and more and more efficient, has led to a change in the last decade to the LFP.
Tesla's Rival EV is an important participant, but Catl dominates both the EV and Storage Battery markets and now represents 90% of the industry profits pool. Its economies of scale have enabled an increase in research and development spending, further strengthening its position.
The total CATL production capacity is expected to double at 1.5 terawatt in 2027, against 684GWH at the end of last year, reflecting an annual growth rate composed of around 30%.
On the other hand, Korean companies have reduced their short -term capital expenditure plans, because the beneficiary margins turned to a negative territory after sales of electric vehicles have dropped projections from American manufacturers.
Neil Beveridge, who directs the energy research from Bernstein to Hong Kong, said that the divergent fortune of Chinese and Korean energy storage companies was “a story of two battery markets”.
“CATL is not only the largest player at industry level, but it also has the best technology and the highest levels of use (in its battery factories),” said Beveridge. “It gives it a clear advantage.”
But the domination of the ESS of China has caused discomfort to certain Western decision-makers, especially in the United States, where Chinese battery systems have already been prohibited from military facilities.
This has given hope to Korean companies that build new LFP production lines, converting high lines and even by pampering the EV battery production lines to produce cells for energy storage.
LG Energy Solution, the largest non -Chinese battery producer in the world, told Financial Times that prices meant that the American market “became favorable to non -Chinese companies with (American) production bases”.
But Hughes noted that Chinese exporters could potentially resist prices, even more than 150%, taking into account their existing cost advantages compared to nickel Korean batteries, cheaper lithium prices and a series of technological innovations that have dropped the prices of batteries.
“A Chinese system on the Chinese market can sell about $ 80 per kilowatt hour, while on the American market, they would consider $ 130 to $ 140 per kWh, which gives them a lot of margin,” said Hughes, noting that Chinese companies will also set up manufacturing facilities in the South-East Prevention countries at much lower tariffs.
Tim Bush, a battery analyst at UBS, noted that even if the main Korean manufacturers, including LG and Samsung SDI, were likely to “take a larger share of a smaller market” due to American prices, they were not yet to prove that they could produce LFP batteries on a large scale and at a competitive cost.
Another possibility, however, is that the United States decides to completely prohibit Chinese batteries from energy storage projects on a network scale.
“You can take a very wide bet and say that in the end, I do not think that the United States will allow themselves to be in a situation of total dependence in China with regard to this energy on a network level,” said Bush.
Chinese energy storage manufacturers should also focus on other markets such as Europe, as they have at home with low recipient margins due to excess and brutal competition.
“They are very eager to develop abroad,” said Hughes. “And if China does not provide in the United States, there will be an abundance of cheap supply for other markets.”
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