"Online, it's said that the production capacity of energy storage batteries is now in excess, but our actual feeling is that the capacity is insufficient."

This is a statement from an employee of a certain PACK factory in the industry as reported by the media. The company mainly focuses on the overseas market, reflecting a current situation: competition is always present, but if you find the right direction, doing business is like "picking up money."

Take the most recent period, for example. This might be the busiest and most exciting two months for Chinese energy storage manufacturers. International energy storage industry exhibitions are being held frequently, and major companies have also begun to concentrate on large orders.

Whether it's a competitive environment or not, it doesn't affect the manufacturers' optimistic outlook on the future of going global during the "golden September and silver October."

01 "Chinese Energy Storage 'Rolls' Out to Sea"

"I've already attended five or six exhibitions this year, and I'm really exhausted," said a frontline employee of an energy storage company.

How frequent are the exhibitions this year? In just September, there were the 3rd EESA Energy Storage Exhibition, the U.S. RE+ Exhibition, the Mexico International Solar and Energy Storage Exhibition, the European (Portugal) Solar Photovoltaic Conference EU PVSEC, and the UK Solar and Energy Storage Exhibition Solar&Storage Live, among others. For the leading manufacturer EVE Energy, 17 out of 29 posts on their public account in September were related to exhibitions.

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Peers and customers gather, making exhibitions an important medium for Chinese manufacturers to secure large orders and win overseas customers.

For example, at one of the most highly regarded exhibitions, the U.S. RE+ Exhibition, more than 300 Chinese photovoltaic and energy storage companies made their presence known, with orders being signed continuously. Chu Energy New Energy signed a 1.5GWh power storage system supply agreement with Bison Energy; Winstar Energy Storage signed a contract for a 530MWh energy storage project on-site; and Guoxuan High-Tech secured a 2GWh order on-site.

The proactivity of the "big factories" goes beyond exhibitions. In September alone, EVE Energy's subsidiary EVE Power signed a 19.5GWh supply agreement with the U.S. energy storage giant AESI; Sungrow successfully signed contracts with the UK renewable energy and energy storage company Penso Power and the investment company BW BW ESS, with a target of 1.4GWh; and BYD made progress in Spain, significantly increasing the cooperation order with the Spanish manufacturer Grenergy Renovables from the originally planned 1.1GWh to 3GWh.Data from China Energy Storage Network indicates that the global energy storage installation capacity is expected to reach 223 GWh, 343 GWh, and 456 GWh in 2024, 2025, and 2026, respectively, with year-on-year growth rates of 48%, 54%, and 33%. Chinese manufacturers, regardless of size, are fully engaged in the global energy storage upgrade trend. According to statistics from the China Energy Storage Alliance (CNESA), Chinese energy storage companies signed orders exceeding 80 GWh in the first half of the year, with 50 GWh being overseas.

As reported by Hightech Lithium Electricity, this large-scale order has become a new normal. Currently, leading manufacturers such as Contemporary Amperex Technology Co. Limited (CATL), BYD, EVE Energy, and Guoxuan High-Tech are operating at full production capacity to meet the demand during the peak season of "Golden September and Silver October" and the restocking needs at the end of the year.

In fact, we can also see the huge opportunities for Chinese manufacturers from the current state of the overseas market.

Taking Europe as an example, this summer, countries like Germany, France, Spain, and the Netherlands experienced negative electricity prices. So-called negative electricity prices occur when the generation capacity exceeds consumption, forcing the power grid to subsidize externally and even pay consumers to use electricity.

This is not a free money-making opportunity. Negative electricity prices arise because the power plant's generation capacity exceeds consumption, but power plants cannot shut down as it would cost a huge amount to restart after a shutdown; meanwhile, the power grid cannot store excess electricity, and if the extra electricity is not addressed, the power grid will be on the brink of collapse. If this continues, electricity prices will be too low, and no capital will be willing to invest in energy, affecting energy transition and even basic supply.

Therefore, essentially, this reveals the dilemma of flawed power grid planning and insufficient energy storage facilities in overseas markets. Tian Qingjun, President of Envision Energy Storage, said: "The essence of energy storage is trading, which is charging and discharging." This attribute determines that Chinese manufacturers going overseas is a timely commercial cooperation for overseas customers in need.

For current Chinese energy storage manufacturers, the overseas market has truly reached a point where there is a gold mine every three steps.

02 "Collective Going Overseas to 'Compete' in Sub-segments"

To forge iron, one must be strong. This round of going overseas is not a desperate attempt by customers but is indeed due to the leading strength of Chinese energy storage.

Firstly, although the production of energy storage batteries in China also requires the support of overseas lithium mines, with the improvement of China's manufacturing capabilities and the stabilization of lithium prices, the advantages of the lithium battery industry chain have fully exploded, and the cost-performance ratio of Chinese manufacturers is unparalleled.The domestic energy storage installation boom has led to a short-term price war, but behind the price war is actually the progress of battery cell technology, the reduction of lithium battery costs, and the improvement of energy density and cycle life of energy storage systems. A low bid is internal competition within the country, but once exported, it becomes an advantage. Therefore, there is also a scene in the industry where, on one hand, people call for no price war, and on the other hand, some companies are too busy with orders and counting money until their hands are soft.

"According to our calculations, the current full life cycle cost per kilowatt-hour of energy storage is between 1 jiao and 2 jiao. In the future, with technological progress, the cost per kilowatt-hour will only be a matter of time to drop to 1 jiao." This is Tian Qingjun's judgment.

Last year, BYD took the lead in bringing the price of energy storage systems below 1 yuan. This year, Kelon Electronics has pushed the price of commercial energy storage into the 0.5 yuan era. Many people think this is simply internal competition within the industry, but they never thought that for large manufacturers, adjusting project costs is itself a core competitiveness.

Large manufacturers have become the mainstay of the overseas tide. This is the second characteristic of this round of overseas tide, where manufacturers have a very clear positioning.

Looking at the market, first-line manufacturers such as BYD, Eve Energy, and CATL are thriving in the main markets of Europe and the United States. For example, CATL said in July during a survey that its market share in Europe has reached as high as 35% and is still increasing. This year, it has locked in orders of more than 45GWh in markets such as Italy and Australia, and its energy storage performance has also achieved good results.

Is the advantage of first-line manufacturers only cost? The answer is no. The head of CATL, Zeng Yuqun, recently accepted an interview with the chairman of the Norwegian Sovereign Wealth Fund's podcast. He believes that operational ability is the key to testing the market value of a brand: "If someone tells you that energy storage is very simple, then you should know that he will pay for it in 10 years. Maybe only in 5 years, they will have to pay a huge maintenance cost."

The projects of large overseas customers are often large in scale, long in duration, and involve different regions around the world, so they need suppliers to be able to provide long-term maintenance. The guarantee ability of leading manufacturers is also their competitiveness in competing for orders.

This does not mean that small manufacturers can only share in the profits. On the contrary, in emerging markets such as the Middle East and Southeast Asia, mid-sized manufacturers can be closer to customer needs and make more detailed product configurations for them.

The infrastructure in regions such as Southeast Asia and Central Asia is not complete, and the demand for stable electricity is high, but they lack developed ultra-high voltage transmission technology like China. For them, the development model of large power grids is not suitable, "but like a small and medium-sized photovoltaic + energy storage system, it can make a small local community generate and use electricity by itself, which is acceptable in terms of technology and cost locally." A small and medium-sized company said in an interview with New Energy Industry Home.

For example, in the Belt and Road markets such as Central Asia, manufacturers such as Huazhi Technology, Telonmei, and Yilanke can also find their positioning and take root locally.In conclusion, as Chinese enterprises venture abroad, energy storage products are also undergoing iterations, with 5MWh+ energy storage products becoming the mainstream of the second generation. The larger the scale, the more it actually signifies an upgrade in overseas demand.

In the long run, the conditions of the overseas market are favorable. In the short term, manufacturers still need to be vigilant against high-frequency issues such as trade barriers.

03 "The True Strength of 'Rolling' Abroad"

Energy storage is, after all, a part of China's industrial capacity going global. As long as the advantages are played out, it is easy to trigger regional trade protectionist sentiments. This has created many interesting cycles.

In the European market, the large-scale launch of energy storage projects previously led to an excess of inventory, but now that the inventory cycle has bottomed out, demand has rebounded rapidly. In the U.S. market, tariffs are set to increase in 2026. As a result, many U.S. energy storage owners are rushing to complete the installation of energy storage systems this year and next year, bringing an explosion of orders for energy storage manufacturers.

Of course, regional risks are ultimately inevitable. The United States just released the final version of the Section 301 tariff bill on September 13th, which will impose additional tariffs on imported photovoltaic cells, steel, aluminum, and other materials in stages over the next three years, significantly weakening the cost advantages of Chinese enterprises.

Wang Yu, the chairman of Farasis Energy, which manufactures power batteries, said: "If a country suddenly increases the import tax rate from 7.5% to 25%, it would have a significant impact on Farasis Energy. For instance, if all Chinese-funded enterprises are banned from selling products in the United States tomorrow, then all the previously invested capital would go to waste."

However, abandoning potential markets due to events that have not occurred is not a reasonable business decision. There may not be eternal enemies or friends in the world, but as long as there are common interests, methods to avoid risks can be explored through communication. This is the strategy of Chinese manufacturers' alliances and collaborations.

On one hand, industrial capacity is going global, either by directly establishing factories in the market or by building factories in other overseas regions to achieve a global layout and diversify risks.

Taking EVE Energy as an example, EVE Energy has made significant investments in battery factory layouts in four regions: Mississippi in the United States, Hungary, Malaysia, and Turkey. This not only allows for direct service to the U.S. market but also relies on Turkey, a middle ground that can be both offensive and defensive.As overseas production capacity expands, EVE Energy has even transformed from a second-tier manufacturer of power batteries to a first-tier player in energy storage. Data from InfoLink shows that EVE Energy's energy storage cell shipments ranked second globally from January to June 2024.

EVE Energy's energy storage battery shipments in the first half of the year have significantly exceeded those of power batteries, with the company's energy storage battery revenue increasing by 9.93% year-on-year, while power battery revenue decreased by 25.79%. Overseas demand accounts for 60-70% of the total, indicating a market strength capable of altering the face of a company.

Contemporary Amperex Technology Co. Limited (CATL) is no different. Since the completion of its first overseas factory in Germany in 2023, CATL's layout spans regions such as the United States, Hungary, Indonesia, Thailand, Spain, and Morocco, including both energy storage and power battery factories.

With the deepening of overseas layout to increase revenue and efficiency, CATL's gross margin in overseas markets reached 29.65% in the first half of 2024, an increase of 8.16 percentage points year-on-year, driving the overall gross margin of energy storage business to increase by about 7 percentage points.

On the other hand, deeply binding with overseas channel merchants and property owners has also created conditions for many companies to expand their overseas sales scale.

For example, Zhuoyang Energy Storage recently signed a cooperation with Ahsell, the largest industrial retailer in the Nordic region, gaining the conditions to deeply enter the regional market.

On July 15, Sungrow Power Supply signed a cooperation agreement with Saudi energy company AlGihaz for the world's largest installed capacity energy storage project, with a total installed capacity of 7.8GWh. Sungrow Power Supply is the energy storage company that won the most orders overseas in the first half of the year, with its revenue increasing by 8.38% year-on-year to 31.02 billion yuan, and net profit increasing by 13.89% to 4.959 billion yuan. Energy storage, as the business with the highest gross margin, saw its gross margin rise by 12.61 percentage points year-on-year to 40.08%, greatly enhancing its profitability.

In summary, going overseas can significantly optimize the growth curve of Chinese energy storage companies at present. Going overseas itself is a profit-driven matter, but under the profit lies China's industrial upgrading and the strength progress of manufacturers, as well as the unstoppable global industry trend. These factors work together to ensure that the future of China's energy storage remains bright.