ESS Business Emerges as a New Growth Engine for Multiple Top-Tier Battery Producers

Recently, Tesla released its financial results for the first quarter of 2025. The report showed that Tesla achieved revenue of $19.335 billion (approximately RMB 141.1 billion) in Q1, down 9% YoY. The growth rate of its automotive business, a key revenue pillar, also slowed significantly, with sales of only 337,000 units, a 13% decrease YoY.

Notably, in stark contrast to the sharp decline in the automotive business, its energy storage business experienced robust growth. Data showed that in the first quarter of this year, its global energy storage systems achieved new installations of 10.4 GWh, up 156.6% YoY, hitting a record high. Among them, the Powerwall energy storage system achieved quarterly deployments exceeding 1 GWh for the first time.

As an important part of Tesla's strategic layout, its Shanghai Energy Storage Megafactory officially commenced production in February this year, with the first Megapack energy storage system successfully rolling off the production line, marking the factory's official entry into mass production with a planned annual capacity of 40 GWh.

Just over a month later, on March 21, the first batch of Megapack energy storage systems from Tesla's Shanghai Energy Storage Megafactory were exported to Australia. It is reported that Tesla has recently secured a 548 MWh energy storage order from Japan's Orix Group and reached a cooperation agreement with Chile's Celda Solar project. Tesla is continuously consolidating its leading position in the global energy storage sector.

In addition, there are reports that Tesla plans to invest over $150 million (approximately RMB 1.087 billion) to build a new energy storage megafactory in Texas, US, with a target annual capacity of 40 GWh.

From this perspective, the energy storage business is expected to become a new growth engine for Tesla's performance. Musk has emphasized that the energy storage business is at the core of Tesla's diversification strategy, aiming for over 50% YoY growth in installations throughout 2025. However, at the Q1 earnings call this year, Musk also clearly stated that "the energy storage business is significantly impacted by tariffs."

In fact, apart from Tesla, based on the 2024 annual reports recently disclosed by China's top-tier battery enterprises, multiple companies have demonstrated strong growth momentum in their energy storage businesses, contributing significantly to their respective companies' revenues. The energy storage business has become their second growth pole.

01

EVE and Sunwoda Achieve Rapid Growth in Energy Storage Business

EVE Energy, a leading player in the power battery sector, delivered impressive results in its energy storage business in 2024, ranking second globally in energy storage cell shipments.

According to its 2024 annual report released in mid-April, during the reporting period, EVE Energy achieved revenue of RMB 48.615 billion, a slight decrease of 0.3% YoY. Net profit attributable to shareholders of the listed company was RMB 4.076 billion, up 0.63% YoY. Net profit excluding non-recurring gains and losses was RMB 3.162 billion, up 14.76% YoY, indicating a significant enhancement in its core profitability.

The most noteworthy aspect is the simultaneous leap in the scale and technological level of its energy storage business. In 2024, its annual energy storage battery shipments reached 50.45 GWh, soaring 91.90% YoY, far exceeding the industry's average growth rate of 60%.

In terms of revenue breakdown, its energy storage and power battery businesses began to "share the spotlight." The financial report showed that EVE Energy's power battery business revenue was RMB 19.667 billion, accounting for 39.43% of total revenue, with a gross profit margin of 4.21%. In contrast, its energy storage battery business revenue was RMB 19.027 billion, accounting for 39.13%, with a gross profit margin of 14.72%. In terms of shipments, its 50.45 GWh of energy storage batteries far exceeded the 30.29 GWh of power battery shipments for the whole year.

In terms of capacity expansion, in December 2024, EVE Energy's 60 GWh megafactory commenced production, with its core product being the Mr.Big series 600Ah+ energy storage cells, making it the first company in the industry to achieve mass production of large 600Ah+ (628Ah) cells. The annual report showed that EVE Energy's energy storage project at its Malaysia factory is progressing steadily according to the established plan and is expected to commence mass production in early 2026, effectively supporting the implementation of its global delivery strategy. It is worth mentioning that EVE Energy has secured multiple large overseas energy storage orders, including 15 GWh from Powin and 19.5 GWh from AESI.

Similarly, Sunwoda, one of the leading players in the consumer battery sector, also achieved rapid breakthroughs in its energy storage battery segment in 2024. The financial report showed that in 2024, Sunwoda's energy storage system installations reached 8.88 GWh, up 107% YoY, achieving a doubling of growth.

In terms of business segments, Sunwoda's consumer battery business accounted for over 54% of revenue, occupying more than "half of the market." Its power battery business achieved revenue of RMB 15.139 billion, up 40.24% YoY, accounting for 27.02% of total revenue. Energy storage system revenue was RMB 1.889 billion, up 70.19% YoY, accounting for 3.37%. Overall, although its energy storage business currently accounts for a relatively small portion of revenue, both in terms of installations and revenue growth, Sunwoda's energy storage business is demonstrating strong growth momentum, indicating that it has become a new growth engine for the company's performance.

It is worth mentioning that in terms of the proportion of energy storage battery shipments, Sunwoda recently stated in an interview with China Battery Network that in 2024, its energy storage battery shipments accounted for approximately 20%, achieving a significant leap from 2023.

In terms of energy storage products, Sunwoda's "Xinyue" 625Ah energy storage cell achieved a single-cell "precise 2 kWh" capacity, with a cell energy density of 426 Wh/L, and a 20-foot container achieving a capacity of 6.8 MWh. It is reported that the "Xinyue" 625Ah cell is expected to achieve mass production in Q3 this year. Recently, Sunwoda also unveiled the world's first 10-meter-class 2 MWh liquid-cooled integrated mobile energy storage vehicle prototype, the "Xinjiyuan 2000," in the industry and plans to officially commence mass production and delivery in May this year.

02

Energy Storage Emerges as a New Growth Engine for Revenues

Not limited to the aforementioned battery companies, including CATL, BYD, CALB, REPT Battero, and other top-tier battery enterprises, all achieved high growth in their energy storage businesses in 2024.

The financial report showed that in 2024, CATL's lithium battery sales reached 475 GWh, including 93 GWh of energy storage battery sales, up 34.32% YoY, far exceeding the 18.85% growth rate of its power batteries. The revenue contribution ratio increased to 16%. CALB's energy storage system revenue in 2024 surged 72.4% YoY to RMB 8.2 billion, with its share of total revenue jumping from 17.6% to 29.6%.

It is understood that the energy storage production lines of multiple producers are operating at almost full capacity. EVE Energy's 2024 financial report showed that the company's capacity utilization rate reached 86.56%. In addition, there are reports that CATL's capacity utilization rate has climbed to 90% since Q4 last year, operating at full capacity.

This has been followed by a new round of "capacity expansion rush" among battery manufacturers. On April 8, EVE Energy announced that its wholly-owned grandchild company, EVE Hungary, would establish a battery manufacturing plant in Debrecen to further expand the production scale of power and energy storage batteries. In March, CATL publicly disclosed its plan to add 40 GWh of battery production capacity in Dongying, Shandong, and invest RMB 500 million to build a 2 GWh ecological energy storage Pack production line to meet the demands of domestic and overseas markets.

Also in March, the second phase of CALB's project in Chengdu, Sichuan, commenced construction, with plans to commence production in Q2 2026. Upon completion, it will form an annual production capacity of approximately 30 GWh for power batteries and energy storage systems. In January, REPT Battero's 10 GWh energy storage system project commenced construction in Huai'an, Jiangsu, covering battery modules, PACKs, energy storage system integration, inverters, and energy storage batteries.

It is worth noting that the current energy storage industry has entered a new round of in-depth adjustment period. Under the price war, market share is further concentrating among top-tier enterprises, which are leveraging their advantages in capital, technology, scale, and brand to further expand production capacity, forming economies of scale and rapid delivery capabilities.

Meanwhile, the implementation of China's "Document No. 136" has triggered an "installation rush" in the industry, directly leading to a surge in energy storage demand. In Sunwoda's view, in the long run, market-oriented transactions will activate the value of energy storage. The shift from "mandatory energy storage allocation" to "on-demand energy storage allocation" will promote the healthy and orderly development of the industry. With the advancement of the "dual carbon" goals, energy storage demand will continue to rise.

In the long run, the overseas energy storage market is rapidly emerging, with multiple emerging markets in Southeast Asia, the Middle East, and South America experiencing explosive growth. It is expected that more energy storage orders will be released in the future. Research reports from Soochow Securities show that the certainty of a global large-scale energy storage boom is increasing, with the US maintaining a high growth trajectory, Europe and emerging markets experiencing grid connection peaks, and this trend is expected to continue until 2026. Among them, large projects in emerging markets are being implemented in batches, with installations expected to grow 221% to 34 GWh in 2025. In the Middle East, tenders for 50-60 GWh projects are expected to be awarded in the first half of 2025, with installations expected to quadruple to 20 GWh in 2025.

Please note that this news is sourced from http://m.cbea.com/djgcwap/202504/120583.html and translated by SMM.