I. Technical Trends: Large-format Cells, Lamination, Long-duration Storage, and Liquid Cooling
What are the trends in the energy storage component industry? The industry consensus for 2026 characterizes the landscape as featuring “large-format cells, liquid cooling, long-duration capabilities, and the coexistence of multiple technical pathways.” Large-format cells: Energy storage cells are evolving from mainstream specifications of 280Ah and 314Ah toward capacities exceeding 500Ah.
CATL has shipped 2 GWh of its 587Ah cells;
BYD has launched a 2710Ah “Blade Battery” specifically for energy storage (with single-cell capacity increasing by over 300% compared to conventional types); and the production of the millionth 684Ah laminated cell by Sunwoda marks a milestone where lamination technology has crossed the threshold into mass production. Additionally, Hithium has announced a dedicated 1300Ah cell (designed for 8-hour long-duration storage) aimed at reducing system components by over 30% and cutting power component costs by more than 50%. Lamination process: This process comprehensively outperforms winding technology in terms of energy density and cycle life, accelerating the shift toward its adoption.
Long-duration energy storage: Grid-side applications are prioritizing long-duration storage of four hours or more.
Demand for systems with a duration of four hours or longer is projected to rise from 30% in 2025 to over 70% in 2026, becoming a standard feature for grid-side projects; specialized technologies for long-duration storage are overcoming bottlenecks regarding thermal management, lifespan, and cost for applications exceeding eight hours.
Liquid cooling: Liquid cooling systems offer distinct advantages, with mainstream system efficiency reaching 85% or higher, and premium projects achieving over 90%.
For component suppliers, the shift toward large-format battery cells reduces BMS complexity and connector costs, while the specialization required for long-duration energy storage (LDES) creates new demands for thermal management (liquid cooling plates/piping), fire safety, and container integration—representing structural growth opportunities for ancillary components.
II.
Market and Demand: Global Volume Surge and Accelerated Overseas Expansion
What are the trends in the energy storage component industry? On the market front, global volumes are surging rapidly, and overseas expansion is accelerating. Data: In 2025, newly installed capacity for new-type energy storage in China reached 64.6 GW/196.5 GWh (up 52% and 79.3% year-on-year, respectively);
projected new installations for 2026 stand at 150–203 GWh domestically and approximately 290 GWh globally, with the potential to reach 1.17 TWh by 2030. In the first half of 2026, global energy storage cell shipments totaled 467.84 GWh (up 94.76% year-on-year), with overseas shipments accounting for 53.2%—surpassing domestic shipments for the first time;
Chinese companies held nine of the top ten spots in global shipments, securing over 40 GWh in orders from the Middle East and Africa. Residential energy storage saw an “order explosion” in 2026;
a significant capacity gap for cells emerged in the first quarter, with leading companies’ order books filled months in advance. Regarding costs: cells account for 65%–70% of the total energy storage system cost, PCS for 12%–15%, and BMS/EMS for 6%–8%; the mainstream manufacturing cost for LFP energy storage systems in 2026 was 1.10–1.30 RMB/Wh; and in the third quarter, the average price of 314Ah cells rebounded to approximately 0.365 RMB/Wh (a notable increase from 0.31 RMB/Wh at the end of 2025).
Policy: The “15th Five-Year Plan for New Power System Construction” proposes adding approximately 160 GW of new energy storage capacity nationwide during the 15th Five-Year Plan period, aiming for a total scale of 300 GW by 2030. The capacity price mechanism incorporates grid-side independent energy storage into the system, validating the commercial model for independent storage.
III.
Key Component Segments: Cells, PCS, BMS, and Thermal/Fire Safety
What are the trends in the energy storage component industry? Opportunities and barriers vary by segment.
**Cells:** Accounting for over 60% of system costs, this represents the largest market share;
however, industry concentration is rising, and leading players (such as CATL and EVE Energy) have order backlogs extending into the second half of the year or even next year—making it a game dominated by major manufacturers where smaller players struggle to enter.
**PCS (Power Conversion Systems):** Accounting for 10%–15% of costs, this segment offers the highest elasticity and barriers to entry, is the most asset-light, and is the least likely to become commoditized. Grid-forming technology is shifting from optional to mandatory—the state encourages its use in renewable energy transmission bases in desert and Gobi regions, and grid-connection requirements for 220kV+ systems mandate low- and high-voltage ride-through capabilities. Grid-forming PCS offers higher gross margins and avoids low-price competition, while overseas demand is surging and Chinese manufacturers possess strong global competitiveness.
**BMS/EMS:** AI algorithms and digital twins are reducing costs by 20%, with a rising share of high-end EMS (supporting multi-market coordinated trading); AI-driven BMS enables “real-time health checks” and precise balancing for individual cells, as well as intelligent suppression of thermal runaway.
**Thermal Management & Fire Safety:** The shift toward liquid cooling drives demand for liquid cooling plates, piping, and thermal management units, while fire safety standards are evolving from unit-level testing to mandatory installation-level verification.
For component suppliers, the use of large-format cells reduces the number of connectors but increases the value per unit; long-duration and liquid-cooled applications drive upgrades in thermal management and fire safety components, representing a source of certain incremental growth.
IV.
Safety and Compliance: NFPA 855, Grid-Forming Technology, and Localization
What are the trends in the energy storage component industry?
The thresholds for safety and compliance continue to rise.
NFPA 855 (2026 Edition) marks a major leap forward in safety regulations for stationary energy storage systems in the US: it introduces a mandatory Large-Scale Fire Test (LSFT)—requiring proof that a fire in a single storage unit will not spread to adjacent units—making installation-level fire testing the industry standard. Modular outdoor containers have become the undisputed mainstream choice, while constructing and operating BESS (Battery Energy Storage Systems) inside buildings is no longer feasible.
Grid-forming inverters and black-start capabilities are becoming standard features: ERCOT in Texas requires energy storage projects with interconnection agreements signed on or after April 1, 2026, to provide grid-forming functions—a move other Independent System Operators (ISOs) are expected to follow—while inverter manufacturers are expanding upstream into the controller layer.
Domestic US manufacturing is making a comeback: FEOC (Foreign Entity of Concern) rules mandate a rising proportion of costs from non-FEOC sources for battery storage projects—reaching 75% by 2030—thereby driving manufacturing back to US soil.
Localization of overseas delivery: Policy banks in Europe and the US are incorporating supply chain traceability, carbon footprint, and labor compliance into tender requirements. Consequently, Chinese energy storage companies are shifting their overseas strategies from exporting individual components to establishing local factories and offering integrated services covering EPC (Engineering, Procurement, and Construction) and O&M (Operations and Maintenance).
For component suppliers, this means proactively addressing certifications, carbon footprint tracking, and local production capacity to keep pace with system integrators expanding abroad.
V. New Directions: Solid-state/Sodium-ion/AIDC/AI-integrated Energy Storage
What are the trends in the energy storage component industry?
A diverse range of technological pathways is emerging.
Solid-state batteries: The “15th Five-Year Plan for the Development of the New Battery Industry” targets initial large-scale application of all-solid-state batteries by 2030, with leading companies aiming for product defect rates at the PPB (parts per billion) level. Small-batch mass production and pilot vehicle installations are expected by 2027. Semi-solid-state batteries have already been successfully deployed in energy storage projects across Xinjiang, Shandong, and Guangdong. However, costs remain several times higher than those of LFP (Lithium Iron Phosphate) batteries, so initial deployment is prioritized for scenarios demanding “absolute safety,” such as data center support and underground installations.
Sodium-ion batteries: Following the rebound in lithium prices, the advantage of theoretically low costs has become prominent; numerous sodium-ion energy storage projects at the 100MWh scale have launched in quick succession, spanning applications from data centers to standalone energy storage.
Energy storage for AIDC: The explosion in AI computing power has turned data centers into a growth engine for energy storage; 1GW of computing infrastructure consumes approximately 7,000 GWh of electricity annually. At the ESIE 2026 exhibition, leading companies showcased energy storage solutions specifically for data centers. Energy storage has evolved from a mere “accessory” to core “infrastructure” for computing centers; this application demands zero tolerance for safety issues, millisecond-level response times, and strict lifecycle cost control, creating a market characterized by high barriers to entry and strong customer stickiness.
AI + Energy Storage: Envision’s 12.5MWh AI energy storage system utilizes the “Tianji” meteorological large model and “Tianshu” energy large model to forecast electricity prices and automate low-buy/high-sell trading; field tests show price prediction accuracy exceeding 90% and a lifecycle revenue increase of over 20%. Virtual Power Plants (VPPs) aggregate distributed solar, storage, and charging assets, shifting the energy storage business model from “selling equipment” to “operating energy assets.”
Conclusion
What are the trends in the energy storage component industry?
In short: technology is trending toward larger cells, laminated structures, long-duration capabilities, and liquid cooling;
the market is seeing global volume expansion and localized overseas operations. By segment: cell manufacturing focuses on volume (market concentration among leaders); PCS focuses on technical barriers (grid-forming upgrades and overseas surges); BMS/EMS focus on AI integration; thermal management and fire protection focus on liquid cooling and safety upgrades; compliance focuses on NFPA 855, grid-forming capabilities, and carbon footprint standards; and new growth areas include solid-state batteries, sodium-ion batteries, AIDC, and AI-integrated energy storage.
For component suppliers, opportunities lie in thermal management, fire protection, and connector upgrades driven by long-duration and liquid-cooled systems; the dividends of grid-forming PCS technology; and high-barrier scenarios such as localized overseas expansion and AIDC support.
Capturing structural growth and high-value segments offers greater potential than competing on price for standardized, bulky components.
