Global ESS battery shipments in 4M26 rose 109% y/y, with demand strength expanding from China to Europe, RoW and AIDC use cases
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Global ESS battery shipments in 4M26 rose 109% y/y, with demand strength expanding from China to Europe, RoW and AIDC use cases
J.P. Morgan believes storage battery demand maintained strong growth in the first four months of 2026, driven primarily by China policy support, energy-security demand in Europe and emerging markets, and backup power plus peak-shaving demand from AI data centers.
- Global ESS battery shipments in 4M26 reached 310GWh, up 109% y/y, above the FY25 trajectory of 93% y/y growth.
- China domestic demand accounted for about 44% of Chinese manufacturers' shipments and rose about 123% y/y in 4M26; overseas demand accounted for about 56%, with EU up 167% y/y and RoW up 154% y/y.
- The US market is seeing a supply-chain shift: shipments from Chinese manufacturers to the US fell 18% y/y in 4M26, while Korean and Japanese battery makers benefited from US ESS demand and regulatory changes.
- AIDC storage has become a structural incremental demand driver, with grid bottlenecks and regulatory support seen as the two key catalysts; CATL is building a full-stack AIDC ESS ecosystem through investments and sodium-ion orders.
- J.P. Morgan is most positive on CATL, Sungrow, Deye, LGES and SDI within the Asian ESS value chain, and notes that ESS importance in BYD's battery shipments is rising.
Report interpretation
Overview
This report focuses on shipments, regional demand, supply structure and investment opportunities in the global ESS battery industry during the first four months of 2026. It notes that global ESS battery shipments in 4M26 reached 310GWh, up 109% y/y; April shipments alone were 94GWh, up 93% y/y and 14% m/m. Demand growth was driven by policy support in China, energy-security procurement in Europe and emerging markets, and strong exports outside the US. Although shipments from Chinese manufacturers to the US fell under the influence of OBBBA-related rules and localization procurement, global demand remained very strong.
Core views
The core view is: first, ESS battery demand strength is stronger than expected, and 1H26 production may grow 110% to 120% y/y; second, Chinese manufacturers still dominate global supply, with 1Q26 global share at about 96% to 97%, but the US market is shifting toward Korean and Japanese suppliers; third, EU and RoW are the main engines of export growth for Chinese manufacturers, up 167% and 154% y/y in 4M26, respectively; fourth, AIDC storage, C&I storage and distributed solar-plus-storage are becoming structural incremental use cases; fifth, the beneficiaries include CATL, Sungrow, Deye, LGES, SDI and BYD.
Analysis framework
The report combines ICCSino, CNESA, EIA, US import data, expert calls and J.P. Morgan coverage company models to break down industry trends by region, end use, supplier share and company exposure to ESS revenue/shipments. The analysis focuses on Chinese domestic installations, US BESS installations, Chinese battery manufacturers' exports, Korean/Japanese supply-chain substitution, the AIDC storage ecosystem, and valuation and business exposure for ESS-related stocks.
Methodology notes
Use global ESS battery shipments, regional exports, US BESS installations and Chinese ESS installations together to assess demand strength.
The report does not rely on shipment data alone; it cross-checks ICCSino shipments, CNESA Chinese installations, EIA US installations and changes in US import sources to determine whether demand is driven by real end-market installations and procurement.
Identify growth sources and supply-chain migration by region.
China domestic demand is supported by policy and better economics for independent storage projects; EU and RoW are driven by energy security and subsidies; the US is affected by OBBBA rules, shifting procurement from Chinese manufacturers to Korean and Japanese manufacturers.
Map industry upside to listed companies across cells, PCS, EMS, system integration and data-center storage ecosystems.
The report assesses beneficiaries by revenue exposure, shipment exposure, market share and regional structure, for example CATL's global share, Sungrow's PCS and data-center orders, Deye's distributed storage exposure in emerging markets, and LGES and SDI's US opportunities.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- CATLGlobal ESS battery leader and one of the report's top recommended names
- Strengths
- Leading global market share, opportunity to gain share outside the US, and ecosystem positioning in AIDC ESS through transactions involving Zhongheng Electric, Hyperstrong and VNET.
- Weaknesses
- Market share in 2025 fell by about 10 percentage points versus 2024, which the report says was mainly due to capacity constraints; share in 4M26 declined by about 2 percentage points versus FY25.
- Comparison
- Global number one; about 60% share in the US, about 20% in the EU, about 30% in RoW, ahead of most Chinese peers.
- Risks
- US tariffs and OBBBA-related rules, capacity constraints, lithium price changes and intensifying competition.
- SungrowBeneficiary in PCS, EMS and system integration
- Strengths
- One of the world's largest photovoltaic inverter manufacturers, with cost advantages, product quality and brand recognition, benefiting from utility-scale and data-center storage orders.
- Weaknesses
- High ESS revenue exposure means earnings leverage may be volatile if order timing or pricing weakens.
- Comparison
- The report believes its product quality and brand are stronger than domestic peers.
- Risks
- Project delivery timing, price competition, overseas policy and trade barriers.
- DeyeBeneficiary in distributed generation and emerging-market ESS
- Strengths
- Has a first-mover advantage in distributed storage in emerging markets, with high FY26E and FY27E ESS revenue exposure, benefiting from solar-plus-storage replacing diesel generation.
- Weaknesses
- High dependence on emerging-market demand and channels may increase volatility as business concentration rises.
- Comparison
- The report notes that C&I storage grew 154% y/y in April, faster than utility-scale ESS at 93% y/y, which is favorable for Deye's end markets.
- Risks
- FX, policy, channel inventory and competition risks in emerging markets.
- LGESKorean battery supplier benefiting from US ESS localization
- Strengths
- Strong ESS order momentum; J.P. Morgan estimates it has one of the largest LFP ESS backlogs among Korean battery makers.
- Weaknesses
- High dependence on US orders and ramp-up of capacity.
- Comparison
- Against the backdrop of declining shipments from Chinese manufacturers to the US, ESS shipments from Korean and Japanese manufacturers grew more than 170% y/y.
- Risks
- US policy changes, order execution, LFP cost competition and customer concentration.
- Samsung SDIKorean battery supplier benefiting from US ESS supply-chain shift
- Strengths
- US import data supports growth in Korean-origin batteries, and its cathode contracts imply about 25GWh/year of US ESS shipment capacity in 2028-2029.
- Weaknesses
- Improved visibility in ESS still requires order wins and capacity realization.
- Comparison
- In contrast to the decline in China-origin imports, Korea-origin imports rose 22% y/y in 1Q26.
- Risks
- Weaker-than-expected US demand, policy changes, capacity buildout and cost pressure.
- BYDIntegrated EV and ESS battery manufacturer
- Strengths
- Strong overseas EV demand and clear vertical-integration advantages; ESS accounted for about 23% of battery output in YTD26, up from 11% in 2024.
- Weaknesses
- ESS revenue exposure is lower than that of some pure storage companies, and the US market is constrained by trade and regulation.
- Comparison
- Global ESS share ranks behind CATL, EVE and Hithium; overseas shipments account for about 60%.
- Risks
- EV demand volatility, price competition, overseas trade barriers and changes in battery material costs.
- EVE EnergyChinese ESS battery maker, rated neutral in the report coverage
- Strengths
- Among covered battery makers, ESS exposure is relatively high, with overseas shipments accounting for about 65% to 75% and a high RoW mix.
- Weaknesses
- Rated N, and market share in 4M26 declined by about 2 percentage points versus FY25.
- Comparison
- Ranks behind CATL globally and competes with Hithium, BYD and others.
- Risks
- Price competition, overseas demand volatility, US market access and profitability pressure.
- CALBChinese ESS battery maker, rated neutral in the report coverage
- Strengths
- High ESS shipment exposure and a large domestic market mix.
- Weaknesses
- About 60% of shipments go to the domestic China market, making its regional diversification weaker than some peers; 4M26 share declined by about 2 percentage points versus FY25.
- Comparison
- Compared with CATL and EVE, its overseas structure and global ranking are weaker.
- Risks
- Domestic competition, policy timing, price pressure and earnings volatility.
Key data
- Global ESS battery shipments in 4M26310GWh, +109% y/yAbove the FY25 baseline of about 93% y/y growth and possibly ahead of J.P. Morgan's 926GWh and ICCSino's 1,100GWh full-year forecast trajectories.
- Global ESS battery shipments in April 202694GWh, +93% y/y, +14% m/mIndicates demand momentum remained strong in April.
- China domestic demand shareAbout 44%, +123% y/y in 4M26Supported by Doc136, Doc114 and national and local policies.
- Overseas demand shareAbout 56%, about 173GWh, about +100% y/yOverall overseas demand remained strong despite lower exports to the US.
- EU shipment growth+167% y/yDriven by subsidies, energy security and accelerated storage adoption in markets dependent on energy imports.
- RoW shipment growth+154% y/yMiddle East conflicts and high oil and gas prices strengthened non-US storage procurement demand.
- China ESS installations27.1GWh in 1Q26, +76% y/yMarch alone was 6.6GWh, +13% y/y.
- US BESS installations3.2GW in 1Q26, +70% y/yMarch alone was 1,205MW, +18% y/y; tighter power supply from AIDC supports demand.
- Chinese manufacturers' ESS shipments to the USDown 18% y/y in 4M26US procurement is shifting to Korean and Japanese suppliers; the US market accounted for only about 8% of Chinese manufacturers' end-market mix, down from 21% in FY25.
- US battery imports from Korea+22% y/y in 1Q26In contrast to lithium battery imports from China, which fell 62% y/y.
- Global share of Chinese manufacturersAbout 96% in 1Q26, close to 97% in 2025/2024Global supply remains highly dominated by China.
- CATL market positionGlobal number one; about 60% share in the US, about 20% in the EU, about 30% in RoWThe report considers CATL one of the top picks in the Chinese battery value chain.
- BYD ESS exposureESS accounted for about 23% of battery output in YTD26Up from 17% in 2025 and 11% in 2024.
- CATL ESS exposureESS accounted for about 23% of battery output in YTD26Up from about 21% in 2025.
Impact & implications
The implication for the industry chain is that ESS batteries are no longer just a cyclical demand story driven by China policy; they are increasingly being driven by energy security, AI data-center power bottlenecks, C&I backup power and distributed solar-plus-storage. Chinese manufacturers still dominate the global market, but US regulation and tariffs are changing regional supply chains, giving Korean makers such as LGES and SDI greater visibility for US ESS orders. For Chinese manufacturers, demand in the EU, RoW and China domestically is still enough to offset part of the pressure from the US; for system integrators and inverter companies, data-center and utility orders may create valuation re-rating opportunities.
Risks
- If lithium carbonate prices rise, it may affect ESS battery pricing tolerance and downstream demand.
- OBBBA-related rules, tariffs and import restrictions in the US may continue to suppress Chinese manufacturers' shipments to the US.
- Global ESS supply remains highly China-dominated, and if trade frictions intensify, regional supply chains could further diverge.
- ESS battery price competition, capacity expansion and inventory changes may compress margins.
- AIDC storage demand is still in an early stage, and there is uncertainty around data-center project deployment, regulatory support and grid interconnection progress.
- Middle East conflicts and oil/gas prices are short-term demand catalysts; if energy prices fall or geopolitical risks ease, some energy-security procurement may slow.
- If assumptions about China's policy support and returns from independent storage projects change, domestic installation growth may come in below expectations.
What to watch
- Whether 1H26 ESS production meets the forecast of 110% to 120% y/y growth.
- Whether ICCSino's full-year 1,100GWh forecast and J.P. Morgan's 926GWh demand forecast need to be revised higher.
- The continued pull from China's domestic policy measures Doc136, Doc114 and local storage targets on installations.
- Whether the high growth in EU and RoW shipments is sustainable, especially storage procurement in energy-import-dependent markets.
- Whether US BESS installations and AIDC power demand continue to support localized supply-chain orders.
- Whether Chinese shipments to the US continue to be affected by OBBBA and tariffs, and the pace of market-share gains by Korean and Japanese manufacturers.
- Order conversion from CATL's investments in AIDC ESS, sodium-ion batteries and data-center channels.
- Changes in lithium carbonate prices, ESS battery prices and downstream project IRRs.
- ESS revenue and order visibility at key companies such as Sungrow, Deye, LGES, SDI and BYD.