China ESS demand reached record levels as tight utilization and accelerating global deployment reinforce Bernstein’s positive storage outlook.

Overview

Bernstein’s monthly Global ESS Tracker finds that energy-storage deployment remains exceptionally strong, led by China, where record shipments and high utilization point to a tightening market. The report expects growth to moderate in the second half but sees tracked demand running above its global forecast; it highlights CATL as its preferred exposure to the theme.

Core views

China remained the central driver of global energy-storage-system demand in July. ESS shipments reached a record 105.5GWh, up 88% year on year and 5% month on month. Domestic shipments were 101.8GWh, the first month above 100GWh, while overseas shipments nearly tripled to 3.7GWh. China’s 2026 year-to-date shipments reached 613.3GWh, up 96% year on year and equal to 60% of Bernstein’s estimate for global shipments, which the report says implies upside to battery-demand estimates if the run rate persists. The report links this strength to falling battery costs and a more supportive policy environment, which improve storage economics. Supply has expanded more slowly than demand: China’s July ESS manufacturing capacity was 109.0GWh, up 54% year on year and 5% month on month, below shipment growth. Industry utilization therefore remained high at 96%, compared with 74% in the same period of 2025. Bernstein interprets this gap as evidence of tightening near-term market conditions as demand catches up with capacity. Forward demand indicators were mixed but still constructive. China tender volumes fell 9% year on year to 55.8GWh in July, largely because July 2025 was a particularly high base; year-to-date tenders nevertheless reached 430.6GWh, up 168% year on year. Winning-bid battery volumes increased 89% year on year to 54.1GWh, the highest monthly level in 2026 to date. The report expects ESS growth to moderate in the second half, while noting that awards remained robust despite the tender comparison. Outside China, regional trends diverged. U.S. ESS installations fell 47% year on year to 2.8GWh in July after a sharp increase in the prior month, leaving 2026 year-to-date installations at 25.1GWh, down 1% year on year. Germany, by contrast, installed 1.1GWh in July, up 79% year on year, with large-scale storage contributing about 0.65GWh and growing 900% year on year. Industrial storage declined 7% year on year to 45MWh and residential storage declined 26% to 0.36GWh. Germany’s year-to-date installations reached 5.5GWh, up 49% year on year. Among battery makers, CATL retained leadership with July ESS lithium-ion battery shipments of 22.3GWh, up 72% year on year, and a 21.6% 2026 year-to-date shipment share. CATL’s July ESS capacity was 22.5GWh, up 42% year on year, and its utilization rate was 98%. Hithium and EVE each shipped 9.8GWh in July, with 9.3% and 9.2% year-to-date shares, respectively. CALB shipped 6.5GWh and held a 6.4% year-to-date share, while BYD’s shipments were 5.8GWh and its year-to-date share was 6.9%. CORNEX, Great Power and Ganfeng recorded particularly rapid volume growth. Bernstein notes that leading producers’ growth was below market growth, which it views as consistent with capacity constraints. Bernstein says it has adopted a more positive ESS outlook since the start of the year, reflecting higher penetration enabled by improved economics and storage’s role in grid stability. Its global ESS battery-demand forecast is 1,023GWh in 2026, up 86% year on year, after 550GWh in 2025. The report’s long-term expectation is 2,109GWh by 2030, implying a 20% CAGR over the following four years. It concludes that tracked data are running clearly above its 2026 estimate and that CATL remains its preferred way to participate in the theme.

Analysis framework

Bernstein compiles monthly installation, shipment and production data from multiple sources, updating its database with a one-month lag. It compares demand, manufacturing capacity, utilization, tendering and winning-bid data across China, the United States and Germany, then assesses producer market shares and growth rates against its global ESS demand outlook.

Methodology notes

• Industry AnalysisSupply-demand framework

  Comparison of ESS shipments, manufacturing capacity, utilization, tenders and winning bids.

  The report uses demand growth relative to capacity growth and utilization rates to judge whether China’s ESS market is tightening.

• Industry AnalysisUpstream-Midstream-Downstream Transmission

  Storage economics, battery demand and battery-maker shipment effects.

  The report connects lower battery costs and supportive policy to stronger storage deployment, then to demand and shipment outcomes for battery producers.

Asset mapping & comparison

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

• CATL (300750.CH; 3750.HK)

  Bernstein identifies CATL as the best way to play the ESS theme.

  Strengths

  July ESS shipments of 22.3GWh, up 72% YoY; 21.6% 2026 YTD market share; 98% ESS utilization.

  Weaknesses

  Its shipment growth was below overall market growth, which the report associates with capacity constraints.

  Comparison

  Led the market ahead of Hithium and EVE, which each shipped 9.8GWh in July.

  Risks

  Capacity constraints could limit growth relative to the broader ESS market.

• BYD

  Covered battery maker participating in China ESS shipments.

  Strengths

  6.9% 2026 YTD ESS shipment market share.

  Weaknesses

  July ESS shipments grew only 5% YoY to 5.8GWh.

  Comparison

  Smaller than CATL, Hithium and EVE by July shipment volume.

Key data

• China July ESS shipments105.5GWhUp 88% YoY and 5% MoM; a record monthly level.
• China 2026 YTD ESS shipments613.3GWhUp 96% YoY and equal to 60% of Bernstein’s estimate for global shipments.
• China ESS utilization96%Up from 74% in the same period of 2025.
• China July ESS tenders55.8GWhDown 9% YoY, primarily due to a high base in July 2025.
• China July winning-bid volumes54.1GWhUp 89% YoY and the highest monthly level year to date.
• U.S. July ESS installations2.8GWhDown 47% YoY; 2026 YTD installations were 25.1GWh, down 1% YoY.
• Germany July ESS installations1.1GWhUp 79% YoY; large-scale storage grew 900% YoY to about 0.65GWh.
• CATL July ESS shipments22.3GWhUp 72% YoY; CATL held 21.6% 2026 YTD shipment share.
• Global ESS battery demand forecast1,023GWh in 2026Up 86% YoY, with a 2030 forecast of 2,109GWh and a 20% CAGR over the next four years.

Impact & implications

The report sees China’s record shipments, high utilization and robust awards as evidence that ESS demand is outpacing capacity growth, supporting the case for higher battery demand. It also highlights diverging overseas trends: large-scale German deployment is accelerating, whereas U.S. installations were weak in July. Bernstein identifies CATL’s scale, leading share and high utilization as the strongest listed exposure to the theme.

What to watch

• Whether China’s elevated shipment run rate continues and creates upside to Bernstein’s battery-demand estimates.
• Whether China tender volumes recover after July’s 9% year-on-year decline.
• The persistence of high China ESS utilization and whether capacity constraints limit leading producers’ shipment growth.
• U.S. ESS installation trends after July’s 47% year-on-year decline.
• Germany’s large-scale storage deployment, which drove July’s strong installation growth.