The energy storage battery market is undergoing disruptive changes. At the beginning of 2025, the grid-type energy storage system still maintained a technical premium of 0.519-0.558 yuan/Wh, 12%-18% higher than the ordinary system, but now the average price of 0.41-0.42 yuan/Wh in Xinjiang's bidding has completely wiped out the premium space. This price is even close to the theoretical cost bottom line of lithium iron phosphate battery energy storage system (0.5-0.6 yuan/Wh), forcing battery suppliers to accelerate the technological breakthrough.
Three major drivers of price bottoming out
1. Overcapacity and low-price orders
In 2024, the overall supply of energy storage battery capacity will exceed demand, the price of battery cells will plummet by 60% to 0.3 yuan/Wh, and the average system price will be halved to 0.5-0.6 yuan/Wh. In order to maintain the operation of production lines, leading enterprises would rather sell at a loss; small and medium-sized enterprises will exchange low prices for market share, exacerbating vicious competition.
2. Policy shift to marketization
After the country canceled the mandatory storage policy for new energy, the owners' willingness to purchase declined, forcing equipment manufacturers to reduce prices to survive. The bidding rules of central enterprises were adjusted simultaneously, and the price weight was reduced from 45% to 35%, pushing the industry from "lowest price bid" to "mid-price bid".
3. Technical cost optimization
314Ah large-capacity lithium iron phosphate battery is accelerating popularization (penetration rate may reach 70% in 2025), and the cost of battery cells is reduced on a large scale; the network-based PCS compresses the hardware premium through algorithm upgrades, and leading enterprises self-develop PCS, BMS, and EMS collaborative innovation to achieve system-level cost reduction.Industry reshuffle and reconstruction of a new orderThe current energy storage system quotation has broken through the cost line of most companies, and the industry is accelerating its clearance. In 2024, 72% of energy storage companies will have an increase in inventory, 60% will have a decline in performance, and some companies will have a net profit plunge of more than 90%. However, leading companies have risen against the trend with their technological barriers and global layout: CATL, BYD, etc. have seized the 20GWh incremental market in the Middle East and 51GWh in North America with their overseas channel advantages; Sungrow has deployed 12GW+ grid-type energy storage systems around the world, reconstructing its competitiveness through cutting-edge technologies such as instantaneous 300% overload; Central enterprises have set a 5GWh cumulative shipment bidding threshold to eliminate small and medium-sized battery suppliers, and the top ten companies in the industry have a share of more than 90%.The turning point has appeared: from price war to value war
The signal that the price of energy storage batteries has bottomed out is clear:
1. Material costs stabilize: The prices of lithium iron phosphate positive electrodes, copper foil, etc. will stop falling and rebound at the end of 2024, and the cost of battery cells will be anchored at 0.28-0.34 yuan/Wh, with limited room for further decline;
2. Safety standard upgrade: In 2025, the "New Energy Storage Safety Technical Specifications" will increase the proportion of mandatory fire protection costs to 5%, and the elimination of inferior and low-priced equipment will be accelerated;
3. Premium ability returns: As the electricity spot market matures, the proportion of auxiliary service revenue of grid-type energy storage systems may increase from 10% to 40%, and the quotation is expected to rise to 0.5-0.6 yuan/Wh.
The global energy storage industry is undergoing a transformation from "manufacturing involution" to "technology leadership". When a Chinese battery supplier won 7.8GWh orders in Saudi Arabia and broke through the localized capacity barriers in the European and American markets, the competitive dimension of energy storage batteries has shifted from the price list to the laboratory. With the completion of capacity clearance by the end of 2025, the lithium iron phosphate battery energy storage system may usher in a rational price recovery of 15%-20%, and the companies that truly survive must be those who bury technology deep in the moat and anchor their vision in the wave of global energy transformation.
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