Energy storage is absorbing battery capacity following the slowdown in EV demand and expanding into AI, robotics, and energy services

Overview

This is a weekly report on the global energy storage and battery industry, organizing developments in capacity, orders, technology, infrastructure, and industry partnerships across the Americas, Asia, Europe, and other regions. The report's central theme is that energy storage, AI infrastructure, and energy services are becoming new pillars of battery demand, but there is significant divergence in the electric vehicle market, the pace of technology commercialization, and battery value-chain stock performance.

Core views

The key change in North America is the shift of battery capacity from serving electric vehicles exclusively to energy storage and other applications. LG Energy Solution has begun production at its Lansing, Michigan plant, which has annual capacity exceeding 35GWh, represents an investment of more than US$2 billion, and plans to increase its workforce from 900 to 1,700. The plant will produce NMC batteries for Toyota electric vehicles and LFP batteries for energy storage systems, including Toyota's electric Highlander planned for launch in 2027 and Tesla's Megapack systems; the latter is covered by a US$4.3 billion supply agreement. The report also states that LGES is converting five of its eight North American battery plants to energy storage applications and aims to increase local energy storage battery capacity to more than 50GWh by the end of 2026. In addition to the US$4.3 billion Megapack order, the company has a US$1.5 billion battery order from Toyota and is exploring supplies for US military drones and unmanned systems. These moves indicate that energy storage, AI data centers, and defense supply chains are becoming new outlets for capacity following the slowdown in EV demand. AI and robotics are further expanding the application boundaries of the battery industry. LG Group and Nvidia have formed a partnership covering humanoid robots, AI factories, and autonomous driving, with plans to showcase a humanoid robot using the Jetson Thor, Isaac GR00T, and Halos for Robotics platforms in the first quarter of 2027; LG affiliates will provide actuators, sensors, and batteries. The two parties also plan to build an AI factory pilot in the first half of 2027 and an 80MW AI data center in Cheonan, South Korea, in the first half of 2028. The report thus links battery demand with robotics, computing infrastructure, and AI-defined vehicles rather than limiting it to traditional electric vehicles. Asian markets are simultaneously advancing vehicle localization, emerging battery technologies, and charging and battery-swapping networks. BYD launched the Racco for Japan's kei car market, receiving orders for more than 1,000 vehicles within weeks of launch, with a post-subsidy price of approximately JPY2 million, or US$12,600. Japan sold more than 1.6 million kei cars in 2025, accounting for over one-third of new vehicle sales; since entering Japan in 2023, BYD has sold approximately 7,400 vehicles cumulatively and sold 3,742 EVs in 2025, close to Toyota's 4,227. However, the advantages of domestic brands, subsidy differences, and consumer preferences remain obstacles to its expansion. Geely plans to begin trials in 2027 of solid-state batteries with pack-level energy density of up to 500Wh/kg, claiming they could support a driving range of more than 1,000 kilometers; testing will cover Geely, Zeekr, Volvo, Polestar, Lotus, and Smart, although large-scale commercial production is still expected toward the end of this decade. BYD and CATL likewise view 2027 as the starting point for early solid-state battery trial production, indicating that the industry is entering a validation phase rather than full-scale mass production. Nio's fifth-generation battery swap stations have entered service in China, bringing the nationwide total to 4,006 and supporting three brands, including Firefly, for the first time, as well as vehicles with wheelbases of up to 3.5 meters. The company has completed its 120 millionth cumulative battery swap, adding 20 million swaps in only six months after reaching 100 million in February; its network also includes 5,160 charging stations and 29,801 charging points across more than 550 cities, including 1,049 highway battery swap stations, while 80.1% of users can access a swap station within three kilometers of their residence or workplace. CATL is also expanding its battery swapping and energy services presence: the company signed a five-year cooperation agreement with Dongfeng Liuzhou Motor covering commercial-vehicle battery technology, standards, Battery Bank, and battery-as-a-service to reduce vehicle purchase costs and operating risks. It also established an energy services holding platform in Xiamen with registered capital of RMB6.1 billion, spanning batteries, battery swapping, electrical equipment, photovoltaics, energy storage, and AI software. The platform further extends CATL's presence beyond its RMB30 billion resource investment platform, RMB10 billion zero-carbon technology company, and 80GWh lithium-ion battery base in Xiamen. CATL will also acquire a 49% stake in the controlling shareholder of Hangzhou Zhongheng Electric Investment Co., Ltd. for approximately RMB4.1 billion and cooperate in AI and data center power supply, charging and battery swapping, virtual power plants, and green power trading. This shows that leading battery companies are expanding from cell manufacturing into power electronics, data center power supply, and energy trading. In another technology partnership, CATL and Schaeffler plan to jointly develop battery management systems and integrated “X-in-1” power electronics solutions for the European market and explore the use of AI and cloud computing in battery management; Schaeffler will be responsible for hardware, software, system integration, testing, and European manufacturing, while CATL will provide batteries, algorithms, and mass-production capabilities. The partnership has implications for strengthening localization of the European supply chain. Investment in battery materials and emerging technologies continues to expand. POSCO Holdings and Ronbay Group reached a partnership and plan to complete battery-grade lithium hydroxide certification at the Yulchon plant in South Korea by the fourth quarter of 2026. The partnership covers hard-rock lithium, Argentine salt-lake lithium, recycled lithium, LFP, and energy storage materials. Inner Mongolia Tuoyi Guoneng launched a solid-state battery project with total investment of RMB6 billion and planned capacity of 30GWh, to be built in three phases, each adding a 10GWh production line. Xingkong Group signed an agreement for a smart sodium-ion battery factory in Zhejiang targeting grid-scale storage, commercial and industrial storage, and low-speed electric vehicles. The report emphasizes sodium-ion technology's advantages in cost, safety, resource availability, and low-temperature performance. Germany's Altmark direct lithium extraction project has entered its second testing phase, with the pilot facility processing 1,000 liters of thermal water per day; the project aims to begin production in 2030 and eventually reach annual output of 25,000 tonnes of lithium carbonate equivalent, sufficient for approximately 500,000 electric vehicles, while estimated local resources total 43 million tonnes of lithium carbonate equivalent. Manufacturing and market data reflect divergence between domestic and overseas EV demand. Tesla's Shanghai plant has produced its six millionth battery pack, only nine months after completing its five millionth in November 2025; the plant has annual vehicle capacity of approximately one million units and has contributed nearly 50% of Tesla's global EV deliveries since starting production. Deliveries in China fell 32.9% year over year to 27,249 vehicles in July 2026, but exports reached a monthly record of 66,330 vehicles. Exports increased 130.1% year over year to 295,324 vehicles in the first seven months, already exceeding total exports for full-year 2025, thereby supporting plant utilization. Australian residential storage demonstrates another growth pathway for end-market energy storage demand. Only 14 months after the government subsidy program began, residential battery installations exceeded 500,000 systems, representing approximately 4% of households nationwide, with total capacity of about 14GWh, above the 9GWh of US residential storage. Australia added more than 9GWh of small-scale storage in the first half of 2026 alone. Origin Energy's virtual power plant connects more than 400,000 households and businesses, with capacity exceeding 1.5GW, showing that distributed batteries are participating in the power system through aggregation. The report also notes a US$22.3 million contract between a Gulf-region energy company and US counter-drone company Powerus, reflecting rising demand for drone detection and protection systems at critical energy facilities. Capital-market data also show significant divergence. As of August 21, Samsung SDI and CATL shares had risen 126% and 42%, respectively, over the past year, while LGES had declined 7%. Among lithium mining and refining companies, Albemarle, SQM, Pilbara Minerals, Ganfeng Lithium, and Tianqi Lithium had risen 70%, 73%, 129%, 30%, and 13%, respectively, while LG Chem and EcoPro BM had fallen 13% and 18%, respectively. Separator companies also diverged, with Yunnan Energy New Material rising 83% and SK IE declining 52%. In the ratings table as of August 20, 2026, both CATL's A shares and H shares are rated Outperform, with current and target prices of CNY385/CNY800 and HKD629/HKD770, respectively, corresponding to 2026E P/E multiples of 17.5x and 24.6x. LG Chem, LGES, and Samsung SDI are all rated Market-Perform, with current and target prices of KRW264,500/KRW312,000, KRW358,500/KRW351,000, and KRW498,500/KRW520,000, respectively, corresponding to 2026E P/E multiples of 98.2x, negative 151.6x due to expected losses, and 284.6x. EcoPro BM is rated Underperform, with a current price of KRW113,300, a target price of KRW140,000, and a 2026E P/E multiple of 132.7x. Sungrow is rated Outperform, with a current price of RMB110.89, a target price of RMB185, and a 2026E P/E multiple of 13.5x. Both Tianqi Lithium's A shares and H shares are rated Outperform, with current and target prices of CNY46.03/CNY80 and HKD33.74/HKD65, respectively, corresponding to 2026E P/E multiples of 11.8x and 7.4x.

Analysis framework

The report organizes the week's capacity startups, orders, partnerships, technology validation, infrastructure construction, and end-market installation data by region, then interprets these events within the electric vehicle, energy storage, AI data center, and battery materials value chains. Its supporting research tools include energy storage and EV trackers, a gigafactory database, global EV and ESS market-sizing models, battery market-sizing and supply-demand models, and cross-company comparisons based on share-price performance, forward P/E, and EV/EBITDA.

Methodology notes

• Industry/Sector Analysis FrameworkSupply-demand framework

  Battery supply-demand and global EV and ESS market-sizing models

  The report assesses supply-demand changes through electric vehicle and energy storage demand and battery capacity projects, and explains industry restructuring by evaluating whether ESS demand growth can absorb EV-related capacity.

• Industry/Sector Analysis FrameworkUpstream-Midstream-Downstream Value-Chain Transmission

  Value-chain tracking from lithium resources, materials, and battery cells to energy storage, battery swapping, data centers, and end applications

  The report links resource certification and lithium extraction projects, materials technology, battery manufacturing, energy services, and end-market installations to show how demand changes are transmitted through the value chain.

• Valuation MethodPE/PEG valuation

  Forward P/E comparison

  The report presents actual 2025 and estimated 2026–2027 earnings per share and P/E multiples for covered companies to compare earnings expectations and valuations across battery and materials companies.

• Valuation MethodEV/EBITDA valuation

  Enterprise value-to-EBITDA multiple comparison

  The key company table compares 2026E EV/EBITDA alongside P/E, supplementing equity valuation analysis from the perspective of operating cash earnings.

• Event Strategy and Behavioral FinanceEvent-driven analysis

  Weekly industry event tracking

  The report focuses on production startups, orders, equity investments, cooperation agreements, and pilot progress, using these verifiable events to identify changes in battery-industry demand and competitive direction.

Asset mapping & comparison

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

• CATL (300750.CH, 3750.HK)

  The report rates it Outperform and notes its expansion in AI and data center power supply, battery swapping, energy services, commercial vehicles, and European battery management.

  Strengths

  Possesses capabilities in batteries, algorithms, mass production, and an integrated resources–manufacturing–services–low-carbon footprint.

  Comparison

  2026E P/E multiples are 17.5x and 24.6x, respectively.

• LG Energy Solution (373220.KS)

  It is responding to slowing EV demand by shifting North American capacity to energy storage and securing orders from Tesla and Toyota.

  Strengths

  The Lansing plant has capacity exceeding 35GWh, its North American ESS capacity target exceeds 50GWh, and it is exploring drone battery applications.

  Weaknesses

  Earnings per share remain negative in 2025 and 2026, and the current rating is Market-Perform.

  Comparison

  As of August 20, 2026, the current price of KRW358,500 was above the target price of KRW351,000.

  Risks

  Conversion to energy storage, capacity expansion, and the 2027 supply plan carry execution requirements.

• LG Chem (051910.KS)

  Included in the ratings and valuation table as a covered battery materials company, with a Market-Perform rating.

  Weaknesses

  The share price fell 13% over the past year, and the 2026E P/E is 98.2x.

  Comparison

  Current price KRW264,500; target price KRW312,000.

• Samsung SDI (006400.KS)

  Included in the ratings and valuation table as a South Korean battery manufacturer, with a Market-Perform rating.

  Strengths

  The share price rose 126% over the year through August 21.

  Weaknesses

  The 2026E P/E is 284.6x.

  Comparison

  Current price KRW498,500; target price KRW520,000.

• EcoPro BM (247540.KS)

  Covered as a cathode materials company, with an Underperform rating.

  Weaknesses

  The share price fell 18% over the past year, and the 2026E P/E is 132.7x.

  Comparison

  Current price KRW113,300; target price KRW140,000.

• Sungrow (300274.CH)

  Included in the ratings table as a covered energy storage company, with an Outperform rating.

  Strengths

  Its 2026E P/E is 13.5x, below that of several South Korean battery and materials companies in the table.

  Comparison

  Current price RMB110.89; target price RMB185.

• Tianqi Lithium (002466.CH, 9696.HK)

  Included in the ratings table as a covered lithium resources company, with both listings rated Outperform.

  Strengths

  2026E P/E multiples are 11.8x and 7.4x, respectively.

  Comparison

  A-share current price CNY46.03 and target price CNY80; H-share current price HKD33.74 and target price HKD65.

• BYD

  It is entering Japan's largest kei car segment with the Racco, designed specifically for the Japanese market.

  Strengths

  It received orders for more than 1,000 vehicles within weeks of launch, with a post-subsidy price of approximately JPY2 million.

  Weaknesses

  Its cumulative sales in Japan remain relatively small.

  Comparison

  It sold 3,742 EVs in Japan in 2025, close to Toyota's 4,227.

  Risks

  It faces challenges from the advantages of domestic Japanese brands, subsidy differences, and consumer preferences for local automakers.

• Geely

  It plans to begin solid-state battery trials across several of its brands in 2027.

  Strengths

  Targets pack-level energy density of up to 500Wh/kg and a driving range of more than 1,000 kilometers.

  Weaknesses

  No specific models have been announced, and large-scale commercialization is expected only toward the end of this decade.

  Comparison

  Like BYD and CATL, it views 2027 as the starting point for early solid-state battery trial production.

  Risks

  The technology still requires a lengthy validation cycle to progress from vehicle testing to large-scale mass production.

• Nio

  It is expanding a charging and battery-swapping network covering three brands through its fifth-generation battery swap stations.

  Strengths

  It has 4,006 battery swap stations, has completed 120 million cumulative battery swaps, and provides 80.1% of users access to a swap station within three kilometers.

• Tesla

  Its Shanghai plant is maintaining utilization through export growth and is supported by LGES supplies of LFP batteries for Megapack.

  Strengths

  Exports rose 130.1% year over year in the first seven months, and the Shanghai plant has produced six million battery packs cumulatively.

  Weaknesses

  China deliveries fell 32.9% year over year in July 2026.

  Comparison

  The Shanghai plant has contributed nearly 50% of the company's global EV deliveries since starting production.

  Risks

  Weakening domestic demand in China.

Key data

• LGES Lansing PlantAnnual capacity exceeding 35GWh and investment exceeding US$2 billionProduces NMC batteries for Toyota electric vehicles and LFP batteries for energy storage systems.
• LGES North American Energy Storage FootprintFive of eight plants shifting to ESS; target of more than 50GWh by the end of 2026Reflects the company's shift of capacity toward energy storage following the slowdown in EV demand.
• LGES Major OrdersTesla Megapack US$4.3 billion; Toyota US$1.5 billionMegapack supply is expected to begin in 2027.
• LG and Nvidia AI Infrastructure PlanHumanoid robot in Q1 2027; 80MW data center in H1 2028They also plan to build an AI factory pilot in the first half of 2027.
• BYD RaccoMore than 1,000 orders; approximately JPY2 million after subsidiesTargets Japan's kei car market, which has annual sales exceeding 1.6 million vehicles.
• Geely Solid-State Battery TargetUp to 500Wh/kg and a driving range of more than 1,000 kilometersTrials are planned for 2027, with large-scale commercialization expected toward the end of this decade.
• Nio Charging and Battery-Swapping Network4,006 battery swap stations, 5,160 charging stations, and 29,801 charging pointsCovers more than 550 cities and has completed 120 million cumulative battery swaps.
• Tesla Shanghai Exports295,324 vehicles in the first seven months of 2026, up 130.1% year over yearJuly exports reached 66,330 vehicles, while China deliveries fell 32.9% year over year to 27,249 vehicles.
• CATL Zhongheng InvestmentApproximately RMB4.1 billion for a 49% stake in the controlling shareholderThe partnership covers AI and data center power supply, charging and battery swapping, virtual power plants, and green power trading.
• CATL Xiamen Energy Services PlatformRegistered capital of RMB6.1 billionCovers batteries, battery swapping, electrical equipment, photovoltaics, energy storage, and AI software.
• Inner Mongolia Solid-State Battery ProjectRMB6 billion investment and planned capacity of 30GWhThe project will be built in three phases, each adding a 10GWh production line.
• Altmark Lithium ProjectTarget annual output of 25,000 tonnes LCE, with resources of approximately 43 million tonnes LCEProduction is planned to begin in 2030, with target output sufficient for approximately 500,000 electric vehicles.
• Australian Residential Energy StorageMore than 500,000 systems and approximately 14GWhRepresents approximately 4% of households nationwide, with capacity above the 9GWh of US residential storage.
• Origin Energy Virtual Power PlantConnects more than 400,000 households and businesses, with capacity exceeding 1.5GWDemonstrates the scale at which residential batteries participate in the power system through aggregation.
• CATL 2026E P/EA shares 17.5x; H shares 24.6xAs of August 20, 2026, both listings were rated Outperform.

Impact & implications

The report shows that energy storage demand is becoming an important destination for battery capacity and is expanding market boundaries through AI data centers, virtual power plants, battery swapping, robotics, and defense applications. Leading companies are expanding from battery cell manufacturing into power electronics, energy services, and software, while solid-state batteries, sodium-ion batteries, and direct lithium extraction projects are entering pilot or expansion phases. However, differences in domestic EV demand, technology mass-production timelines, and profitability and valuations across value-chain segments mean that industry growth is not occurring synchronously.

Risks

• Slowing electric vehicle demand may continue to force battery companies to adjust the use of their North American capacity.
• BYD faces challenges in Japan from the advantages of domestic brands, subsidy differences, and consumer preferences for local automakers.
• Although solid-state battery trials are planned for 2027, large-scale commercialization is still expected toward the end of this decade, creating validation and mass-production timeline risks.
• Tesla's China deliveries fell 32.9% year over year in July 2026, indicating weak local demand.
• Some South Korean battery and materials companies remain loss-making or trade at high forward P/E multiples, with significant divergence in capital-market performance across the value chain.

What to watch

• Track whether LGES can increase its North American ESS battery capacity to more than 50GWh by the end of 2026.
• Monitor whether LGES's US$4.3 billion supply agreement for Tesla Megapack begins as planned in 2027.
• Monitor LG and Nvidia's humanoid robot launch in the first quarter of 2027 and construction of the 80MW data center in the first half of 2028.
• Track Geely, BYD, and CATL's solid-state battery trials or early trial-production progress in 2027.
• Monitor whether POSCO completes battery-grade lithium hydroxide certification at the Yulchon plant by the fourth quarter of 2026.
• Track the Altmark direct lithium extraction project's progress from the testing stage toward its commercial production target in 2030.
• Monitor the subsequent pace of expansion in Australian residential batteries and virtual power plants under subsidy support.