In a recent report by SNE Research, the global shipments of Lithium-Ion Batteries (LIB) for Energy Storage Systems (ESS) experienced a significant surge in 2023, marking an impressive 53% increase from the previous year. The shipments reached 185 GWh, up from 121 GWh in 2022, highlighting the booming demand for ESS solutions worldwide.
China emerged as the leading consumer in the ESS market, accounting for 45% of the global demand with a total shipment of 84 GWh. North America followed with 30% of the market share, translating to 55 GWh, while Europe and other regions each contributed 12%, amounting to 23 GWh.
Chinese battery manufacturers, particularly those specializing in Lithium Iron Phosphate (LFP) batteries, saw extraordinary growth, with companies like EVE, REPT, and HTHIUM reporting growth rates exceeding 100%. This surge is attributed to their competitive pricing strategy, offering Battery Energy Storage System (BESS) container solutions in the U.S. at prices as low as $100 per kWh or lower, significantly undercutting the prices of their Korean counterparts.
Despite the U.S. Inflation Reduction Act’s (IRA) Foreign Entity of Concern regulations, Chinese-made batteries face no export or shipping restrictions to the U.S., giving them a competitive edge in price over other global manufacturers. This advantage has allowed Chinese battery makers to dominate the LIB for ESS market, not just in the U.S., but also in Europe.
CATL maintained its position as the leading battery manufacturer, followed by BYD and EVE. This trio of Chinese companies outpaced competitors such as Samsung SDI and LG Energy Solution in terms of shipment volume. The latter two, ranked 6th and 7th, witnessed no growth from 2022, largely due to their delayed entry into the LFP battery market. Consequently, the market share for Korean battery manufacturers fell from 14% in 2022 to 9% in 2023.
In response to this challenge, Korean battery makers have announced plans to start mass production of LFP batteries in North America by 2026, aiming to regain momentum in the ESS market. This strategic shift is in part driven by the preference of North American customers for locally manufactured and supplied batteries. However, to effectively compete with the cost-competitive Chinese batteries, Korean manufacturers will need to achieve comparable cost efficiencies.
This analysis, provided by SNE Research, underscores the dynamic nature of the global ESS market and highlights the strategic moves by major players to capture growth and competitive advantage in this rapidly evolving industry.
