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CATL has brought an energy storage system to the market that is supposed to have an energy density of 430 Wh/L and exceed the current industry standard by 1.7 times with 15,000 charging cycles. In addition, the new system does not lose any power in the first five years.

Henrik Bork, long-time China correspondent for the Süddeutsche Zeitung and the Frankfurter Rundschau, is Managing Director at Asia Waypoint, a Beijing-based consultancy firm specialized in China. "China Market Insider" is a joint project of the Vogel Communications Group, Würzburg, and Jigong Vogel Media Advertising in Beijing.

At a launch event on April 9, CATL introduced its new energy storage system as the "first serially producible system with 0 degradation for five years". The new system, called "Tianheng", has an energy density of 430 Wh/L and is extremely durable, according to the manufacturer. Tianheng, an advancement of CATL's lithium-ion phosphate cell energy storage, is reportedly able to achieve 15,000 charge cycles, which would be about 1.7 times the current industry standard.

Energy density increased by about 30 percent

While the capacity of the individual battery cells was not disclosed, CATL provided information on the space requirements of the new energy storage system: Due to the approximately 30 percent higher energy density and the accommodation in standard 20-foot containers, the footprint will be reduced by 20 percent, according to the battery manufacturer.

In initial reactions, analysts in China focused on the two indicators that are particularly important for energy storage, namely life cycles and power loss. This is because energy storage systems need to be usable for as long as possible, without quickly losing more and more of their capacity.

CATL gets high marks on both indicators, with media comments like "revolutionary." The company has set the course for a "new era full of innovation and competition," it was said.

Energy storage as a growth driver

Although Tianheng's specifications obviously need to be verified in practice, the importance CATL attaches to its energy storage business has once again become clearly visible with this product development.

• The latest financial reports from the Shenzhen-based, largest manufacturer of power batteries on earth, already show how quickly energy storage has become the main growth driver for the company's future: According to the 2023 financial report, CATL's revenues from energy storage systems grew by more than 33 percent compared to the previous year, to 59.9 billion Yuan (about 7.2 billion Euros). This was even faster growth than in other business areas, especially car batteries.

• Revenues from batteries for electric and hybrid vehicles were also robust and grew strongly during the aforementioned period. But against the backdrop of rapid price declines for lithium-ion batteries in e-mobility, CATL has further upgraded energy storage as an important profit center and is accordingly investing in its research & development.

Currently, energy storage is responsible for only about 15 percent of CATL's gross revenue, but Robin Zeng, CEO of CATL, expects that its storage and automotive business could be on par by around 2030.

Not only is the competition for this industry in China being fought over price, but increasingly also over technological innovations. This fact could also be politically relevant, where politicians from Washington to Brussels are currently accusing China of exporting "highly subsidized overcapacities" and thus want to justify shielding their markets in the interest of domestic lobbyists. However, only as long as facts are still relevant in this discourse.

China focuses on photovoltaics, e-mobility and battery production

The pace at which China in particular, but also some other countries, are accelerating the use of renewable energies, is leading to a rapidly growing demand for energy storage systems. By the end of this year, their installed capacity in the People's Republic alone is likely to grow to 65 GWh, corresponding to an annual growth of more than 30 percent.

"The domestic energy storage market is growing strongly, exceeding expectations," comments the Beijing daily Xinjing Bao. Not only CATL, but also competitors in the battery market such as BYD, CALB, Gotion, EVE Energy, and Farasis are therefore fighting harder for market shares in energy storage.

Since the Chinese government moved the "three new" industries of photovoltaics, e-mobility, and battery production to the center of its further development strategy at the beginning of this year, growth in this sector is likely to accelerate even more in the coming years.

Already due to current figures, a tripling of the battery storage market to around three trillion yuan is expected between 2025 and 2025. That would then be a domestic market of around 390 billion euros in the People's Republic of China.