"Several integrators have approached us to buy battery cells these days, but we have no cells available until the end of this year," said a representative from a domestic energy storage cell manufacturer. The market supply and demand have become so tight that despite the energy storage cell market experiencing overcapacity in 2024, it has suddenly entered a state where for some cell types, "you can't get supply even with price premiums". The speed of this supply-demand reversal has exceeded market expectations.

Current Cell Shortage Situation

According to industry chain feedback, tight energy storage supply and demand have already prompted some companies to begin raising prices. Infolink Consulting's energy storage cell price report shows that prices for square lithium iron phosphate cells of different capacities have increased slightly month-on-month.

The price range for 100Ah energy storage cells is 0.34-0.4 yuan/Wh, with an average price of 0.37 yuan/Wh; The average prices for both 280Ah and 314Ah energy storage cells are 0.298 yuan/Wh. Prices for mainstream cell models accumulated increases of 10%-20% in June-July, with many companies operating at high capacity utilization rates.

The price recovery has driven profit improvements. With rising cell prices and increased capacity utilization, industry profitability is expected to gradually improve from the third quarter of 2025, with the full impact of price increases reflected in the fourth quarter.

Roots of Demand Explosion

The unexpected explosion in energy storage demand is the direct root cause of the cell shortage.

Domestically, the new energy online electricity price marketization reform implemented on June 1, 2025 (known as "Document 136") became a key variable. The policy required existing projects to be grid-connected before June 1, otherwise they would have to compete completely through market-based electricity prices.

This rule directly stimulated a rush installation by new energy companies, with energy storage as a grid-connection necessity, leading to concentrated order release. According to statistics from the China Industrial Association of Power Sources, in May 2025 alone, domestic newly installed energy storage capacity reached 10.25GW/26.03GWh, hitting a historical monthly high.

The overseas market showed a "multi-point blooming" pattern. In the first half of 2025, Chinese companies received 199 overseas energy storage orders, with a total scale exceeding 160GWh, a year-on-year increase of 220%.

The Middle Eastern market became the fastest-growing dark horse, with orders reaching 37.55GWh, accounting for 23.44%; Australia contributed 32.31GWh (20.17%); and Europe 22.81GWh (14.24%).

Supply Can't Keep Up with Demand

In 2024, the industry's overall capacity utilization was low, and companies were reluctant to expand production. However, with the sudden demand explosion in 2025 and the 6-12 month capacity expansion cycle, coupled with the accelerated exit of small and medium-sized enterprises due to industry internal competition, the short-term reliance on leading enterprises for capacity expansion makes it difficult to alleviate the supply-demand contradiction.

Leading companies are facing production capacity constraints. Contemporary Amperex Technology (CATL), Eve Energy, and other leading enterprises are operating their production lines at full capacity, with orders scheduled until the first quarter of 2026.

New Pattern of Technological Competition

While demand is growing rapidly, technical barriers are also rising quickly. 2025 is the year when 314Ah cells truly comprehensively replace 280Ah cells, with market share reaching about 70%.

However, leading cell companies are expanding their competitive advantage by mass-producing 500Ah+ large cells. In June 2025, CATL announced the mass production of 587Ah large energy storage cells. Most second-tier companies still remain at the 314Ah stage, and some laggards may be eliminated within the next 1-2 years.

500Ah+ large cells are becoming the next focus of technological competition, and this "large cell competition" will trigger a new round of industry reshuffle. The gap in technological evolution cycles between enterprises has extended from a few months to over a year and a half.

Industry Future Outlook

Despite short-term supply-demand imbalance, the industry remains cautious about medium-to-long-term risks. From the fourth quarter of 2025, newly planned domestic production capacity will be concentrically released, and it is estimated that the industry's total production capacity will exceed 800GWh in 2026, which may trigger price wars again.

Overseas policy risks cannot be ignored either: US tariff barriers, increasingly strict carbon footprint certification in Europe, and "implicit barriers" in Middle Eastern markets such as localization rate requirements.

On September 12, the "Large-Scale Construction Action Plan for New Energy Storage (2025-2027)" jointly issued by the National Development and Reform Commission and the National Energy Administration clearly proposed that by 2027, the national new energy storage installed capacity should reach over 180 million kilowatts, driving approximately 250 billion yuan in direct project investment.

This means the energy storage industry is entering a new cycle of "dual competition in scale and technology". On the surface, it's a supply-demand imbalance, but beneath lies the emerging industrial opportunities of power market reform and global energy transition.