Global Energy Storage and Battery Weekly: ESS, Data Center Power Demand, and Localized Supply Chains Remain Key Themes

Overview

Bernstein's current edition of Global Energy Storage: Battery Weekly 3 August focuses on news across the global battery, energy storage, and new energy vehicle supply chains, covering the United States, Asia, Europe, and other regions. Key topics include localized battery materials and cell capacity in the United States, energy storage demand from AI data centers, financing support for European battery manufacturing, growth in China's new energy and energy storage investment, and commercialization progress in solid-state batteries, sodium-ion batteries, and ultra-fast-charging technologies.

Core views

The core view is that global energy storage demand continues to expand, driven particularly by AI data centers, grid flexibility, renewable energy integration, and industrial policies. Battery companies are accelerating localized production in North America, Europe, India, Morocco, and other regions. At the same time, technology pathways are becoming more diversified, with progress in LFP, prismatic batteries, solid-state batteries, sodium-ion batteries, thermal batteries, and ultra-fast-charging batteries. From an investment perspective, opportunities are concentrated in companies with scale manufacturing, overseas delivery capabilities, localized customers, and technological iteration capabilities. However, investors should remain alert to valuation, patent litigation, environmental regulation, subsidy changes, and the pace of project earnings realization.

Analysis framework

The report adopts an industry-weekly format, organizing key industry events by region and supplementing them with company price performance, valuation tables, ratings and target price tables, company models, and industry model indices. The analytical framework assesses battery and energy storage industry trends primarily through event tracking, supply chain footprints, policy changes, technological progress, and secondary-market performance.

Methodology notes

• Industry trackingBattery Weekly event tracker

  Weekly event-driven industry monitoring

  Tracks changes in demand, capacity, technology, and policy across the battery, energy storage, EV, and materials supply chains through global news, company announcements, and market data.

• Valuation comparisonKey companies price performance and valuation

  Comparison of company price performance and valuation

  The report presents market capitalization, P/E, EV/EBITDA, and short- to medium-term share price performance for companies across the battery cell, lithium resources, cathode, anode, separator, and other segments to facilitate cross-sectional analysis of market pricing.

• Industry modelingGlobal ESS TAM / Global EV TAM / Battery supply and demand

  Total addressable market and supply-demand models

  The report index includes global ESS TAM, global EV TAM, battery TAM, and battery supply-demand models to support medium- and long-term assessments of demand and capacity.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• CATL

  Global battery leader, appearing in price performance, ratings tables, and recent research indices

  Strengths

  Benefits from scale, technology, and rising ESS demand; the ratings table shows 300750.CH and 3750.HK as Outperform.

  Weaknesses

  Intense industry competition, valuation, and overseas regulatory conditions may affect market expectations.

  Comparison

  Compared with South Korean battery manufacturers, CATL is more prominent in scale and cost; compared with certain materials companies, it benefits more directly from expanding ESS demand.

  Risks

  Overseas policy reviews, trade restrictions, price competition, customer concentration, and changes in technology pathways.

• LG Energy Solution

  South Korean battery manufacturer that secured Honda's prismatic battery project and is involved in patent-related events with EVE

  Strengths

  The new Honda prismatic battery customer strengthens its North American footprint, while the 44 GWh Ohio plant provides a foundation for mass production.

  Weaknesses

  The ratings table assigns Market-Perform; earnings and valuation remain affected by the industry cycle.

  Comparison

  Compared with CATL, LGES has advantages in North American customers and joint venture plants, but its cost position and earnings leverage require validation.

  Risks

  Patent litigation outcomes, capacity ramp-up, customer project progress, and fluctuations in EV demand.

• Sungrow

  Energy storage and photovoltaic inverter company appearing in the coverage table and recent research

  Strengths

  The ratings table shows Outperform with a target price of RMB 185; it is supported by ESS demand and growth in global energy storage projects.

  Weaknesses

  Energy storage project delivery, overseas competition, and pricing pressure may affect margins.

  Comparison

  Compared with battery cell manufacturers, Sungrow is more focused on systems and power electronics and is more affected by project execution and grid connection schedules.

  Risks

  Overseas policies, project acceptance, supply chain costs, and intensifying competition.

• Tianqi Lithium

  Lithium resources company appearing in the coverage table and recent lithium outlook research

  Strengths

  The ratings table shows 002466.CH and 9696.HK as Outperform, with long-term support from battery demand and energy storage growth.

  Weaknesses

  Lithium prices are highly cyclical, and short-term relative share price performance remains under pressure.

  Comparison

  Compared with battery manufacturers, Tianqi Lithium is more sensitive to upstream resource prices.

  Risks

  Falling lithium prices, supply growth outpacing demand, project development, and policy risks.

• Gotion High-Tech

  Chinese battery manufacturer advancing potential investment in the PowerCo Spain project and financing for a battery plant in Morocco

  Strengths

  Its presence in Europe and Africa strengthens its global capacity footprint; the Morocco project has an initial capacity of 10 GWh and a long-term expansion plan to 100 GWh.

  Weaknesses

  Overseas projects still require construction, financing, customer onboarding, and compliance validation.

  Comparison

  Compared with European domestic battery manufacturers, Gotion may have advantages in Chinese supply chains and LFP manufacturing experience.

  Risks

  European control arrangements, regulatory reviews, execution risks, and regional policy changes.

Key data

• Dongwha Tennessee electrolyte plant capacity86,000 tonnes/yearDongwha Electrolyte's Tennessee electrolyte plant in the United States has begun commercial shipments, serving ESS battery customers.
• LGES-Honda Ohio battery facility44 GWhLGES will advance a prismatic EV battery project for Honda, conducting pilot production in Ochang, South Korea, before transitioning to mass production at the Ohio joint venture plant.
• Hyundai MAAC initial capacityApproximately 2 GWh/yearHyundai Motor's first in-house battery plant will initially produce NCM pouch cells, with capacity to support approximately 20,000 EVs.
• NextEra-Brookfield data center campusMore than USD 100 billion; 2 GW gas; up to 2.6 GW battery storageThe Kentucky AI data center campus illustrates the trend of linking data center power demand with energy storage projects.
• Tesla Project Sterling PPA509 MW solar; 360 MW / 1,440 MWh battery storage; Tesla purchasing 90% of outputThe project is expected to begin operations in 2028, supporting corporate demand for clean electricity.
• Antora Energy Series CUSD 550 millionThe funding will be used to expand thermal battery capacity to address long-duration energy storage demand from industrial and data center applications.
• China power mix 1H26Coal-fired power 49.7%; renewables above 40%; wind and solar approaching 25%Coal-fired power's share of China's power mix fell below 50% for the first time, while grid investment increased 14% and energy storage investment increased 74%.
• Ronbay-JSW ESS MoU5 GWh; cumulative overseas ESS contracts for Ronbay exceeding 20 GWhThe agreement covers 5 MWh and 6.26 MWh energy storage systems, supporting expansion in India's energy storage market.
• EU Battery Booster FacilityUp to €1.5 billion; up to €500 million per project; covering up to 60% of costsSupports the first large-scale commercial EV battery cell plant in the European Economic Area, requiring planned capacity of at least 10 GWh/year.
• Australia NEM power pricesDown 47% year over year in 2Q26; renewables supplied 42%Battery storage improves the ability to shift daytime solar generation to the evening peak, reducing reliance on gas-fired generation.

Impact & implications

The report indicates that energy storage is expanding beyond traditional renewable energy support into broader applications including AI data centers, industrial decarbonization, and grid peak regulation, potentially continuing to lift demand for battery cells, energy storage systems, lithium materials, and grid equipment. Regionally, the United States emphasizes local manufacturing and AMPC incentives, Europe is strengthening its domestic battery chain through lending facilities, and China is reinforcing its competitiveness through high energy storage investment, zero-carbon parks, and overseas supply chain expansion. For investors, it is important to distinguish genuine orders from thematic sentiment and assess whether companies can build project backlogs, stable customer relationships, cost advantages, and earnings realization.

Risks

• Energy storage demand from AI data centers may involve thematic hype, and the earnings contribution of some companies may not become more apparent until 2027-2028.
• The battery supply chain faces patent litigation and intellectual property risks, such as LG Energy Solution's complaint against EVE Energy.
• Environmental, subsidy, and compliance reviews of Chinese EV and battery investments in Europe and Hungary may become more stringent.
• Cyclical fluctuations in the prices of lithium, cathode materials, anode materials, and other inputs may affect margins for battery manufacturers and materials companies.
• New technologies such as solid-state batteries, sodium-ion batteries, and ultra-fast-charging batteries remain in the early stages of commercialization, with uncertainty around mass-production costs, yields, and customer validation.
• Large-scale energy storage and battery plant projects face risks related to construction delays, grid connection approvals, financing costs, and customer order realization.

What to watch

• The timeline and order scale for the Honda-LGES prismatic battery project as it moves from pilot production in Ochang to mass production in Ohio.
• Whether energy storage projects related to AI data centers generate verifiable PPAs, project backlogs, and earnings contributions.
• Whether China's high growth in energy storage investment can continue to ease renewable energy integration and grid constraints.
• The allocation results of the EU Battery Booster Facility and progress on projects such as ACC, Verkor, and PowerCo.
• Whether the Factorial-SK On solid-state battery partnership can demonstrate that existing lithium battery production lines can be retrofitted at low cost.
• Customer certification, cost curves, and the pace of GWh-scale capacity expansion for sodium-ion batteries in ESS and UPS applications.
• Changes in power prices, ancillary service revenues, and policies after battery storage participates in electricity markets in Australia, Chile, and other markets.