Analysis-China's power reforms, global data centre buildout usher in battery boom

Core Insights - China's electricity market revamp is enhancing the economics of energy storage, coinciding with a surge in international demand, leading to a significant boom for Chinese energy storage manufacturers [1][3] - Chinese firms are projected to see a 75% increase in global shipments of lithium-ion battery cells for energy storage this year, with exports exceeding $65 billion [1][2] Industry Dynamics - The increase in sales is primarily driven by domestic data centers and renewable energy, alongside Chinese reforms and subsidies that are elevating overall demand for energy storage [3] - International demand is also rising due to the growth of data centers, the need to support Europe's aging grid, and China's expanding renewable energy initiatives in the Middle East [3] Market Position - Chinese energy storage cell manufacturers are experiencing high demand, with many operating double shifts to fulfill orders, marking a significant surprise in China's energy sector [4] - UBS has raised its 2026 forecast for global battery-energy storage installations by 25%, indicating strong future growth potential [4] Investment Trends - The International Energy Agency anticipates a 16% increase in global investment in battery storage facilities this year, reaching $66 billion, with a substantial portion expected to be captured by Chinese firms [5] - All six top global cell suppliers are Chinese, highlighting the country's dominance in the production of energy storage cells [6] Company Performance - EVE's energy storage sales volumes increased by 35.51% in the first three quarters compared to the previous year, while REPT BATTERO achieved record high shipments in the third quarter [7] - The proportion of revenue from energy storage is growing for leading players like CATL and BYD, although it has historically been less than that from automotive batteries and EVs [7] Future Outlook - Pairing solar energy with storage is becoming essential for meeting the power needs of U.S. AI data centers, as traditional baseload power sources are not expected to grow significantly in the next five years [8]