As we reach the midpoint of 2024, energy storage battery system companies are gradually unveiling their mid-year performance reports. CATL recently released its financial report for the first half of 2024, showing that the company achieved a total operating revenue of 166.77 billion yuan, a year-on-year decrease of 11.88%; the net profit was 22.87 billion yuan, a year-on-year increase of 10.37%. The capacity utilization rate was 65.33%, an increase of 4.83% year-on-year. Among them, the revenue from the energy storage battery system was 28.8 billion yuan, a year-on-year increase of 3%, accounting for about 17% of the total revenue.
Affected by factors such as better-than-expected installed capacity of wind and solar power, advancements in energy storage technology, cost reduction of the system, and the release of overseas demand, the shipment volume of energy storage battery system in China has maintained a rapid growth trend since the second quarter. New product launches, strong demand, and deepening overseas development have become the main reasons for the growth in corporate performance.
Industry Growth Exceeds Expectations
“Exceeds expectations” – this is how many institutions describe the performance of CATL in the second quarter. The shipment volume of power and energy storage battery system reached 110 gigawatt-hours, of which the proportion of energy storage battery system exceeded 20%, approaching 25%. In the first quarter, CATL’s shipment volume of power and energy storage battery system was 95 gigawatt-hours, and the shipment volume of energy storage batteries was 18 gigawatt-hours, accounting for nearly 20%. Overall, in the first half of the year, CATL’s estimated shipment volume of energy storage battery system was around 45 gigawatt-hours, and the total shipment volume of energy storage battery system in 2023 was 69 gigawatt-hours, completing more than 60% of the shipment volume of the previous year. In the first half of the year, the gross profit margin of CATL’s energy storage battery system was 28.87%. From the analysis of its financial reports over the years, from 2018 to 2023, CATL’s revenue from the energy storage business increased from 189 million yuan to nearly 60 billion yuan, becoming its second growth curve.
Canadian Solar, one of the “Big Five” photovoltaic module manufacturers, also achieved performance growth by developing the energy storage battery system business. In the first half of the year, it is estimated to achieve a net profit attributable to the owners of the parent company of 1.2 billion to 1.4 billion yuan, of which the net profit in the second quarter increased by 7% to 42% compared to the previous quarter. Canadian Solar stated that in the first quarter of this year, the delivery volume of its large-scale energy storage battery system was basically the same as the whole year of 2023; in the second quarter, the delivery volume of the company’s large-scale energy storage battery system is expected to maintain a growth of more than 50% compared to the first quarter; in 2024, the shipment volume of large-scale energy storage battery system will reach 6 – 6.5 gigawatt-hours, a year-on-year increase of about 500%.
According to the research and statistics of the Gaogong Industry Research Institute, in the first half of 2024, the shipment volume of China’s energy storage lithium batteries was 116 gigawatt-hours, a 41% increase compared to the first half of 2023. Among them, the shipment volume in the first quarter was 40 gigawatt-hours, and the shipment volume in the second quarter was 76 gigawatt-hours.
Cost Reduction and Efficiency Enhancement Achievements are Emerging
In the first half of the year, the bidding prices of energy storage battery system continued to decline, compressing the profit space of the entire energy storage industry chain. Enterprises actively pursued “cost reduction and efficiency enhancement” to maintain their competitive advantage. According to incomplete statistics from the China Energy Storage Alliance, in June, the average winning bid price for a 2-hour energy storage battery system was 0.74 yuan per watt-hour, a 14% increase month-on-month and a 35% decrease year-on-year; the average winning bid price for a 4-hour energy storage battery system was 0.55 yuan per watt-hour, a 37% decrease month-on-month.
EcoFlow released its semi-annual performance forecast, stating that the net profit attributable to shareholders of the listed company in the first half of the year was 60 million to 80 million yuan, compared to a loss of 51.0443 million yuan in the same period last year, representing a year-on-year growth of 217.54% – 256.73%. The company stated in the announcement that this was mainly due to the effectiveness of the cost reduction and efficiency enhancement strategy. Under the influence of factors such as the optimization of inventory costs and the decline in raw material procurement prices, its gross profit margin increased year-on-year. At the same time, by precisely placing advertisements and efficiently reusing marketing materials, it reduced the sales expense ratio. It also actively adjusted the organizational structure and optimized the human cost structure, reducing the management expense.
At the same time, the price decline of energy storage battery system is gradually narrowing, and the average price is stabilizing, which is also beneficial for enterprises to clarify expectations and increase their earnings. With the decrease in the prices of resources and raw materials such as lithium carbonate, the linked impact has led to a decline in the unit sales price of the company’s products. In the first half of the year, CATL’s comprehensive gross profit margin was 26.5%, a year-on-year increase of 4.9 percentage points.
Price competition is forcing energy storage battery system equipment to iterate in the direction of high power and high efficiency. One of the most obvious trends is that the 314Ah-based 300Ah+ large-capacity energy storage battery system cells are gradually replacing the 280Ah battery cells to become the new mainstream in the market. Currently, the market penetration rate of 300Ah+ energy storage battery cells has reached about 30% and is gradually developing towards 500Ah+ battery cells.
From the perspective of enterprises with the capacity to mass-produce 300Ah+ battery cells, up to now, more than 10 battery manufacturers, including CATL, REPT Battery, Envision AESC, Ganfeng Lithium, Guangdong Brunp Recycling Technology, Sunwoda, and Hithium, have the mass-production capacity and have released more than 20 types of large-capacity energy storage battery cell categories. This will to a certain extent lead to the concentration of winning bid enterprises towards leading battery manufacturers.
Overseas Market Contributes to Growth
Overseas markets are witnessing frequent large orders, raising the industry’s expectations for the performance of the entire energy storage market throughout the year. In July alone, Sungrow Power signed the world’s largest energy storage battery system with Saudi ALGIHAZ, with a capacity of up to 7.8 gigawatt-hours; Clou Electronics announced that its wholly-owned subsidiary, Clou USA, will provide approximately 600 megawatt-hours of containerized battery energy storage systems to an American battery energy storage enterprise; Narada Power announced that it signed a procurement contract with a French energy storage project company with an amount of approximately 264 million yuan, mainly supplying lithium battery energy storage systems with a scale of approximately 223 megawatt-hours.
The continuous high demand and high profit in overseas markets have prompted domestic energy storage enterprises to actively “go global”. Canadian Solar stated that the company has already laid out distribution networks in North America, Europe, Japan, and other countries and regions where the household energy storage battery system is active.
China International Capital Corporation Research Report predicts that the global energy storage shipment volume will reach 273 gigawatt-hours in 2024. In the short term, the improvement in economic efficiency in the US market will drive the marginal improvement in the shipment of the large-scale energy storage market, and the tariff policy may bring about a rush to install. In the medium term, the energy transition, extreme weather, and the development of AI in the US market will drive the increase in energy storage battery system demand; in the European market, the destocking of household energy storage is nearing the end, and the prices of natural gas and residential electricity have fallen but still remain at historically high levels. At present, the economy of household photovoltaic and energy storage battery system is still relatively high. The EU’s plan to increase the proportion of renewable energy and the upward adjustment of targets by multiple countries to accelerate construction will bring opportunities for large-scale energy storage battery system; in Southeast Asia, the contradiction between the high power demand of emerging economies and the weak power grid infrastructure will promote the continuous increase in energy storage installations.
The Gaogong Industry Research Institute predicts that the annual shipment volume of energy storage lithium batteries in 2024 will exceed 240 gigawatt-hours, of which power energy storage will become the main driving force for growth throughout the year, and the price of large-scale energy storage battery cells will remain at 0.30 – 0.35 yuan per watt-hour in the second half of the year.