In 2023, the consensus within the Chinese new energy storage industry, primarily dominated by lithium-ion battery storage, was the issues of “internal competition and excess.”  As we step into 2024, a significant flag in the expanding field of new energy, the question arises: What lies ahead for the new energy storage industry in China?

Recently, the domestic research institute GGII released its top ten trend predictions for the Chinese new energy storage market in 2024.  According to GGII, the global energy storage market is entering a reshuffling period after a rapid development phase, and this trend is expected to continue over the next 1-2 years.  Factors such as slowed growth, excess capacity, compressed profits, market segmentation, technological iterations, capital cooling, and safety incidents contribute to an accelerated differentiation among enterprises.

GGII specifically points out that in 2024, the overall Chinese new energy storage market will experience oversupply, with system integration facing fiercer competition than battery cells.  More than 50% of energy storage system enterprises (including large-scale systems, industrial and commercial systems, household systems, etc.) are expected to be eliminated, with the top ten energy storage system integrators taking over more than 80% of the market share.

In 2023, the newly added capacity for new energy storage installations was approximately three times that of 2022, marking a significant surge.  However, behind the encouraging industry data lies a challenging reality.  Whether in power, industrial, or residential energy storage, both upstream material equipment and downstream components and integration face structural and phase-specific overcapacity challenges.  Companies are caught in a price war, extended delivery periods, and local service challenges.  The industry’s profit margins are being squeezed, and companies are confronting crises related to cash flow and layoffs.

GGII predicts that in 2024, the new energy storage market will continue to face oversupply issues, and economic challenges may see some improvement.  The forecast includes several key points:

1.  Global front-end newly installed capacity is expected to increase by 40% in 2024, with energy storage system/battery shipment growth of around 25%, reaching a global energy storage system shipment of over 160GWh.
2.  The overall Chinese new energy storage market will face oversupply issues, with system integration facing more intense competition than battery cell manufacturing.  Over 50% of energy storage system enterprises are expected to be eliminated, with the top ten players taking over 80% of the market.
3.  Battery cell prices are expected to stabilize around ¥0.4/Wh, while energy storage system (0.5C) prices will stabilize at ¥0.8/Wh, but disorderly competition below cost may persist.
4.  New energy storage products equipped with 314Ah high-capacity battery cells will be mass-produced in the second quarter of 2024, bringing upgrades to lithium-ion battery cells and power conversion systems (PCS).  However, 280Ah high-capacity battery cells and systems will remain mainstream in power storage applications.
5.  China’s domestic spot trading and ancillary service rules for energy storage are expected to become more complete in 2024, opening up new business models for energy storage and potentially improving economic challenges.
6.  Sodium-ion batteries and large cylindrical batteries are expected to find applications in residential energy storage in 2024, marking the beginning of the large-scale deployment of large cylindrical batteries.
7.  In 2024, the total shipment volume of all-vanadium redox flow batteries will surpass GW for the first time, with system prices dropping to ¥2/Wh.

These predictions offer insights into the challenges and opportunities that the new energy storage industry may face in the coming year.  As the sector navigates through oversupply and economic hurdles, adaptation and innovation will be crucial for companies to thrive in the evolving landscape.