China’s energy storage market will be worth $8.7bn by 2025

Transport applications will dominate with $7.4bn, or 85% share of the revenues. Stationary applications will earn $1.3bn. Overall, revenues will grow slower than volumes on account of continually falling battery and systems prices. 

Lux Research analysts studied China’s growing energy storage market in the backdrop of drivers such as environmental pollution, the push toward renewables, and government incentives. The company found that while transportation leads, stationary is a growth driver. Total demand for energy storage will grow to 31GWh per year in 2025, with transportation again the dominant player. Transportation’s share of the market will grow to 29GWh. The stationary market, at 2.3GWh, is smaller but grows at a faster 30% CAGR.

After a spike in sales of new energy vehicles in 2014, China will settle to a more leisurely pace of growth, mainly on account of inadequate charging infrastructure. Still, the market will grow at a 19% CAGR, reaching 500,000 units in 2025, across passenger and heavy vehicles.

Growth in China’s stationary storage will follow from an aggressive deployment of renewables. China leads the world in installed capacity of renewables, with plans for much more. In addition, preliminary policy developments suggest the electricity sector will implement pricing reforms, encouraging efficiency-boosting technologies including grid storage.

“Besides understanding the market dynamics and producing cost-competitive products, most players in these markets will require strong partnerships to succeed,” said Lilia Xie, Lux Research Associate and lead author of the report titled Clearing the Haze: Demystifying Energy Storage Opportunities in China.

“Early leaders such as BYD will try their best to hold onto their positions but the diversification of the market will gradually create promising opportunities for those who operate with patience and savvy,” added Xie.

Clearing the Haze: Demystifying Energy Storage Opportunities in China is part of the Lux Research Energy Storage Intelligence service.