Core Insights - The storage industry is facing a crisis due to aggressive price competition, leading to unsustainable practices and potential market issues [2][3] - The rapid growth of new energy storage installations is overshadowed by a significant drop in lithium battery storage prices, which have fallen nearly 80% over three years [3][4] - Companies are experiencing increased revenue but declining profits, indicating a troubling trend of "increased revenue without increased profit" [4] Industry Overview - As of mid-2025, the new energy storage installed capacity in China reached 94.91 million kilowatts, a 29% increase from the end of 2024 [2] - Lithium-ion batteries dominate the market, accounting for 96.4% of installed capacity, yet companies are struggling with profitability due to falling prices [3][4] - The average bidding price for lithium battery storage systems has decreased significantly, with a 47.82% drop year-on-year in 2024 [3] Market Dynamics - The influx of capital into the storage sector has led to a proliferation of low-quality projects, with many storage facilities being built but not utilized [3][4] - At least 15 storage capacity and power station projects have been terminated or delayed since 2025, involving investments exceeding 10 billion yuan [4] International Expansion - Chinese storage companies are increasingly pursuing overseas markets, with a 246% year-on-year growth in overseas orders in the first half of 2025 [5] - Despite the potential for international growth, many companies are facing similar pricing pressures abroad, leading to a lack of profitability [5] Regulatory Environment - The introduction of mandatory national standards for lithium batteries aims to stabilize the market and prevent below-cost bidding practices [8][9] - Industry associations are advocating for self-regulation to combat price wars and promote healthy competition [7][9] Future Outlook - The global energy storage capacity is projected to reach approximately 270 GW by 2026, indicating a growing market [7] - Companies are encouraged to innovate and diversify applications to enhance competitiveness and ensure sustainable growth [10]