Global energy storage demand continues to drive expansion across the battery value chain

Overview

This report is Bernstein's weekly update on the global energy storage and battery industry, reviewing developments across the Americas, Asia, and Europe in energy storage systems, battery materials, second-life batteries, solid-state batteries, AI power demand, grid investment, and regional policy. The core theme is that ESS demand continues to benefit from renewable grid integration, grid stability, data center load, and policy support, and is gradually becoming an important source of demand for the battery value chain.

Core views

The report conveys the following core views: first, the North American ESS market is attracting accelerated expansion by Korean and traditional battery companies; second, second-life use of retired EV batteries is beginning to form grid-scale and commercial & industrial application scenarios; third, Asian battery material and electrolyte supply agreements continue to scale up; fourth, European energy storage projects, certification, and localized supply chain construction are accelerating; fifth, AI computing and data center power demand are placing higher requirements on grids and energy storage. Overall, energy storage demand is expected to buffer the pressure from slowing EV growth on the battery value chain, but profitability and valuations remain affected by safety, certification, policy, tariffs, raw materials, and capacity competition.

Analysis framework

The report adopts a weekly news-flow tracking approach, classifying events by region and value-chain segment, and combining company models, industry models, recent research, and price/valuation displays to observe changes in ESS demand, material supply, technology pathways, regional orders, regulatory certification, and capital expenditure.

Methodology notes

• Industry TrackingWeekly News Flow and Regional Tiered Tracking

  Classifying energy storage and battery events across the Americas, Asia, and Europe

  By aggregating regional news to identify changes in orders, capacity, policy, certification, and technology, this approach is suitable for capturing short-term marginal changes in the value chain.

• Value Chain AnalysisBattery Value Chain Mapping

  Mapping the chain from materials, components, and cells to system integration and end applications

  The report covers electrolyte, graphite, silicon anodes, solid-state batteries, ESS systems, second-life batteries, and grid applications, helping assess which segments benefit more strongly.

• Demand-Driven AnalysisESS and Data Center Power Demand Framework

  Energy storage demand is jointly driven by renewable grid integration, grid stability, AI computing loads, and commercial & industrial electricity use

  AI computing demand in China, large-scale European energy storage projects, and North American ESS orders together show that power system flexibility demand is becoming an important source of battery demand.

Asset mapping & comparison

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

• ESS batteries and system integrators (SK On, HyperStrong, Wasion, Sungrow, CATL)

  Directly benefit from growth in grid storage, renewable grid integration, and data center power demand

  Strengths

  Improved order visibility, upgraded product capacity, and progress in overseas projects and certification enhance market entry capability

  Weaknesses

  Industry competition is intense, and delivery capability, cost control, and safety reliability still need to be proven

  Comparison

  Compared with traditional EV batteries, ESS demand is more driven by grid stability, policy incentives, and renewable energy absorption

  Risks

  Project delays, price competition, tariff changes, fire safety incidents, and failure of regional certifications

• Battery materials and anodes/electrolytes (Tinci Materials, Syrah Resources, Nexeon, Vianode/Cylib, EcoPro BM, Posco Future M)

  Participate in the battery value chain through electrolyte, graphite, silicon anodes, recycled graphite, and cathode materials

  Strengths

  Long-term contracts, technology upgrades, and localized supply chain construction improve medium- to long-term demand visibility

  Weaknesses

  Profits are sensitive to material prices, customer certification, and capacity utilization

  Comparison

  Anode and electrolyte segments are more directly driven by order scale, while cathode materials are more easily affected by EV demand and inventory cycles

  Risks

  Raw material price volatility, incomplete customer qualification testing, higher costs in non-China supply chains, and downstream order cuts

• Second-life batteries and the circular economy (Waymo/B2U, Moment Energy)

  Convert retired EV batteries into stationary storage capacity, extending battery life cycles

  Strengths

  Reduce resource waste, support grid storage and renewable energy absorption, and offer both cost and environmental narratives

  Weaknesses

  Battery consistency, residual life assessment, system integration, and safety management are complex

  Comparison

  Compared with direct recycling, second-life use prioritizes releasing the value of remaining capacity, but standardization is more difficult

  Risks

  Safety liability, performance degradation, regulatory standards, and commercialization scale falling short of expectations

• Electric utilities, data centers, and green power infrastructure

  AI computing and renewable grid integration increase demand for multi-hour storage, flexible loads, and grid investment

  Strengths

  Demand sources are more diversified, covering utilities, commercial & industrial users, data centers, and district heating scenarios

  Weaknesses

  Grid connection, 24/7 green power matching, and project approval may become bottlenecks

  Comparison

  Compared with pure generation assets, storage and flexible loads more directly solve volatility and peak-valley balancing issues

  Risks

  Incomplete electricity pricing mechanisms, project return volatility, policy subsidy changes, and lagging grid investment

Key data

• SK On GRIDON Gen2Mass production planned for the third quarter of 2027, with about a 15% increase in energy capacity per container, targeting more than 20 GWh of ESS orders in 2026The company has discussed orders exceeding 10 GWh with U.S. customers, highlighting progress in the North American ESS market.
• Sebang Battery U.S. ESS InvestmentKRW 100 billion, approximately USD 72 millionThe funds will be used for Sebang Lithium Battery America, marking its transition from lead-acid batteries toward ESS and environmentally friendly energy solutions.
• Moment Energy Second-Life FactoryExpected annual capacity of 1 GWh, with cumulative financing of more than USD 100 millionThe Vancouver factory will use retired EV batteries for BESS, targeting data centers, industrial users, and utilities.
• Tinci Materials and Cornex AgreementSupply of more than 1.01 million tons of battery electrolyte and chemicals through 2030Cornex's capacity plan reaches 180 GWh annually, including a 50 GWh ESS-oriented plant.
• IBK Renewable Energy Equipment FundKRW 250 billion, approximately USD 167 millionIBK also proposed a KRW 8 trillion energy investment target over five years, covering BESS, grid, and data center projects.
• HyperStrong Southeastern Europe OrdersMore than 1 GWhIncluding over 900 MWh of large-scale grid storage in Romania, as well as a combined 75 MWh of utility and commercial & industrial systems in Croatia and Serbia.
• Wasion GridUltra Certification3.3–5.0 MWh liquid-cooled containerized energy storage system obtained EU 2023/1542 NB certificationThe certification helps it enter the European utility-scale ESS market.
• Xingchen Energy and Chuneng Cooperation10 GWh strategic lithium battery cooperationThe cooperation focuses on supply chain coordination, product integration, quality control, and project delivery.
• ProLogium SPAC PlanPlans to raise at least USD 250 million; Dunkirk plant initial capacity of 0.8 GWh in 2028, expanding to 12 GWh by 2032The funding will be used for the French solid-state battery plant and commercialization of lithium-ceramic solid-state technology.
• Flexbase Swiss Flow Battery Project800 MW / 1.6 GWhThe project combines long-duration energy storage, AI data centers, and district heating, and is expected to begin operations in 2028.

Impact & implications

For investors, this weekly report reinforces the demand thesis that ESS is more resilient than EVs. North American orders, European certifications and large projects, Asian long-term material contracts, and growth in AI power demand together point to a rebalancing in the structure of battery demand. Beneficiary assets may be concentrated in companies with capabilities in large-scale manufacturing, overseas certification, system integration, material supply, and safety technology; however, the value chain still faces slowing EV demand, price competition, regulatory hurdles, fire safety, tariffs, and uncertainty around non-China supply chain certification.

Risks

• Slowing EV demand may weaken capacity utilization and pricing power for some battery and cathode material companies.
• ESS projects face higher certification requirements for safety, fire protection, thermal runaway management, and EU battery regulations, which may delay market entry.
• Non-China battery material supply chains still face uncertainty in customer qualification testing, costs, and scaling, for example Syrah's contract with Tesla still requires final approval.
• Tariffs, regional policies, and localization requirements may alter the cost and competitive landscape of cross-border supply chains.
• Price fluctuations in lithium, graphite, electrolyte, and other materials will affect margins for battery makers and material producers.
• Rapid growth in AI computing loads may intensify grid pressure; if grid and storage investment do not keep pace, it will constrain green power matching and project deployment.

What to watch

• Whether SK On can achieve its 2026 ESS order target of more than 20 GWh, and the mass production progress of GRIDON Gen2 in the third quarter of 2027.
• The implementation of Sebang Battery's U.S. ESS business unit investment, customer acquisition, and product roadmap.
• The actual deployment scale, cost, and safety performance of second-life battery projects such as Waymo/B2U and Moment Energy.
• The delivery pace of the more than 1.01 million ton supply agreement between Tinci Materials and Cornex, and Cornex's 180 GWh capacity expansion.
• The certification, grid connection, and commercialization progress of European projects such as HyperStrong, Wasion, and Flexbase.
• Whether AI data center power demand drives faster adoption of multi-hour storage, grid upgrades, and green power procurement.
• Financing, mass production, and customer validation milestones for solid-state battery and next-generation materials companies such as ProLogium, Nexeon, and Mintech Ionics.