Core Insights - The battery cell shortage is currently the biggest bottleneck for the energy storage industry, affecting production and cash flow for many companies [2][3][13] - The average delivery time for energy storage battery cells has increased significantly, from 30 days to 75 days, leading to production cuts and even shutdowns for some small and medium enterprises [2][4] - The energy storage market is experiencing a price war, with lithium battery storage system prices dropping nearly 80% over the past three years, resulting in widespread losses across the industry [3][17] Industry Challenges - The rapid growth in energy storage demand, driven by policy changes, has outpaced battery cell production capacity, leading to supply shortages [4][16] - Companies are increasingly adopting a "split order procurement" strategy to mitigate supply risks, which has raised procurement costs by over 20% [6][14] - The financial strain is evident, with many companies facing negative cash flow and high debt levels, as the average asset-liability ratio for listed energy storage companies reached 65.3% in the first half of 2025 [20][21] Strategic Responses - Companies are exploring vertical integration to secure supply chains, with some investing in their own battery cell production [21][24] - Smaller companies are focusing on higher-margin projects and reducing the number of ongoing projects to survive the current market conditions [23][24] - The emergence of a secondary market for battery cells has grown rapidly, with an estimated 5GWh of battery cells expected to circulate through this market by September 2025 [19] Future Outlook - The battery supply crisis is expected to persist for at least 6 to 12 months, with potential price increases of 5% to 10% in the fourth quarter of 2025 [23][24] - The industry is likely to see a return to rational competition as companies adapt to the new market dynamics, focusing on technology and supply chain management [24]

Core Insights - The battery cell shortage is currently the biggest bottleneck for the energy storage industry, affecting production and cash flow for many companies [1][2][3] - The average delivery time for energy storage battery cells has increased significantly, from 30 days to 75 days, leading to production cuts and even shutdowns for some small and medium-sized enterprises [1][2][3] - The energy storage market is experiencing a price war, with lithium battery storage system prices dropping nearly 80% over the past three years, resulting in widespread losses across the industry [3][4][5] Industry Challenges - The rapid growth in energy storage demand, driven by policy initiatives, has outpaced battery cell production capacity, leading to supply shortages [4][5] - Companies are increasingly adopting "split order procurement" strategies to mitigate supply risks, which has raised procurement costs by over 20% [7][16] - The financial strain is evident, with many companies facing negative cash flow and high debt levels, as the average asset-liability ratio for listed energy storage companies reached 65.3% in the first half of 2025 [23][24] Market Dynamics - The secondary market for battery cells has rapidly developed, with a projected 5GWh of battery cells expected to circulate through this market by September 2025, accounting for over 15% of total demand [20] - Price discrepancies are prevalent, with battery cell prices rising while energy storage system sales prices have fallen, leading to a profit distribution imbalance within the industry [18][19] - Major players like CATL are expanding production capacity significantly, while smaller companies struggle to secure stable supplies, exacerbating competitive disadvantages [17][24] Strategic Responses - Companies are exploring vertical integration to secure supply chains, with some investing in battery cell production and lithium resource acquisition [24][26] - Many firms are narrowing their focus to higher-margin projects and reducing the number of ongoing projects to ensure survival [25][26] - The industry is expected to face supply challenges for at least 6 to 12 months, but improvements may occur post-2026 as new capacities and technologies mature [25][26]