Global battery demand is entering a differentiated phase, with ESS and robot batteries becoming high-value incremental drivers

Overview

This report covers the global battery value chain, focusing on the positioning of Chinese, Korean, and Japanese battery companies in EV, ESS, robot batteries, and AIDC backup power. The report argues that the battery industry is shifting from being driven solely by EVs to a more differentiated multi-application structure: EV remains the largest source of demand, but growth is slowing; ESS is accelerating due to grid, renewable energy, and AI data center demand; and robot batteries may become a niche market characterized by small volume, high ASP, and high technical barriers.

Core views

The core views are as follows: first, China will continue to dominate global EV and ESS battery share thanks to LFP cost advantages, scaled manufacturing, and an integrated supply chain; second, Korean companies remain competitive in high-value segments such as U.S. ESS, localized supply chains, high-nickel, 4680, and silicon anodes; third, Japan is not pursuing mass-market battery share, but is instead focused on precision, high-profit applications such as backup batteries for AIDC server racks; fourth, battery metals supply and demand are shifting from oversupply concerns toward better balance, and lithium prices are expected to recover moderately in 2026/27F; fifth, robot batteries may favor high-nickel chemistries in the short term, while Chinese companies may gradually gain share over the long term through LFP improvements and battery-swapping architectures.

Analysis framework

The report uses a top-down demand forecasting and regional competitive landscape analysis approach, combining Nomura’s auto team EV/PHEV sales forecasts, ESS downstream application breakdowns, policy localization rules, cost subsidy calculations, and comparisons of major battery makers’ capacity and technology roadmaps to form views on industry share, pricing, profitability, and stock preferences.

Methodology notes

• Demand forecastingEV/ESS battery demand model

  Forecast GWh demand by application scenario

  The report separately forecasts demand for EV, ESS, and robot batteries, incorporating EV sales, battery capacity per vehicle, ESS grid applications, AI data center demand, and battery capacity per robot into its estimates.

• Competitive landscapeRegional supply chain positioning analysis

  Differentiated positioning of China, South Korea, and Japan

  China focuses on scale, LFP, and supply-chain cost advantages; South Korea focuses on high-value EVs and U.S. ESS localization; Japan focuses on specific high-precision applications such as backup batteries for AIDC servers.

• Policy analysisLocalization and tax incentive framework

  TCA, IAA, CRMA, AMPC, ITC, MACR/PFE

  The report assesses how European and U.S. policies raise local content requirements and change the relative competitiveness of Chinese, Korean, Japanese, and domestic suppliers through subsidies or market-access thresholds.

• Technology pathwayBattery chemistry comparison

  LFP, high-nickel, sodium-ion, semi-solid-state, all-solid-state

  The report believes LFP is the mainstream scalable chemistry for EV/ESS, high-nickel is suitable for premium EVs and robots, sodium-ion may expand in ESS, and commercialization of all-solid-state EV batteries may be delayed until after 2028F.

Asset mapping & comparison

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

• CATL (300750 CH)

  Preferred Buy name

  Strengths

  Global leader in EV and ESS with scale, profitability, LFP advantages, and sodium-ion battery positioning.

  Weaknesses

  U.S. and European policy restrictions may affect some overseas penetration.

  Comparison

  Compared with most peers, CATL has more evident advantages in scale, cost, and supply-chain integration.

  Risks

  Trade restrictions, rebound in material prices, weaker-than-expected EV demand, and safety incidents.

• Samsung SDI (006400 KS)

  Preferred Buy name

  Strengths

  Benefiting from U.S. ESS localization, AIDC BBU batteries, and high-value EV applications, with earnings recovery expected in 2H26F.

  Weaknesses

  Still needs to compete with low-cost Chinese suppliers in markets outside China.

  Comparison

  Its cost advantage is weaker than that of Chinese makers, but it has policy and customer barriers in U.S. localization and high-spec applications.

  Risks

  U.S. subsidy phase-down, slower-than-expected cost declines, and ESS project delays.

• LG Energy Solution (373220 KS)

  Buy-rated Korean ESS-related supplier

  Strengths

  U.S. localized ESS capacity and customer base are likely to benefit from non-China content requirements.

  Weaknesses

  Global share is pressured by low-cost Chinese suppliers.

  Comparison

  Like Samsung SDI, it is a Korean beneficiary of localization, but the report places greater emphasis on Samsung SDI as the preferred pick.

  Risks

  North American inventory adjustments, policy uncertainty, and price competition.

• EVE Energy (300014 CH)

  Beneficiary of ESS and 4680 markets

  Strengths

  Has opportunities to gain share in global ESS and 4680 battery markets, and has announced sizable additional capacity plans.

  Weaknesses

  Faces industry overcapacity at the low end and overseas policy barriers.

  Comparison

  Less of a category leader than CATL, but offers higher elasticity in niche growth markets.

  Risks

  Capacity utilization of expansion, price volatility, and policy access restrictions.

• Panasonic (6752 JP)

  Neutral

  Strengths

  Estimated to have about 60-70% global share in rack-level BBU for AIDC servers, with a focus on high-precision backup power.

  Weaknesses

  Limited competitiveness in the mass-market battery space, and the risk-reward is viewed as already fairly priced.

  Comparison

  Unlike Chinese and Korean companies, Panasonic is more focused on niche, high-value AIDC applications.

  Risks

  Weaker-than-expected AIDC demand, customer concentration, and technology iteration risk.

• L&F

  Top Buy

  Strengths

  Its cathode materials business serves stable EV customers and is diversifying into LFP chemistry.

  Weaknesses

  The materials segment is highly affected by battery customer demand and metal price volatility.

  Comparison

  Compared with cell makers, L&F is more directly exposed to structural upgrades in cathode materials.

  Risks

  Slower-than-expected contract execution, material price volatility, and downstream demand fluctuations.

• BYD (002594 CH)

  Leading Chinese participant in ESS and EV batteries

  Strengths

  Has LFP technology, vehicle-battery synergies, and cost advantages.

  Weaknesses

  Faces localization and trade restrictions in overseas markets.

  Comparison

  Like CATL, it is a leading Chinese player, but CATL is listed as the preferred pick in the report.

  Risks

  Policy restrictions, intensifying competition, and slowing EV demand.

• SK Innovation / SK On

  Neutral or related unlisted supplier

  Strengths

  Has participation opportunities in the Korean battery supply chain and U.S. localization.

  Weaknesses

  Battery operations are weakening, and refining operations may be affected by easing geopolitical conflict.

  Comparison

  The report is less positive on SK Innovation than on Samsung SDI and LG Energy Solution.

  Risks

  Slow earnings recovery, policy and trade uncertainty, and declining refining margins.

Key data

• Global ESS battery demand2030F: 926GWh; 2035F: 1.3TWh17% CAGR in 2026-30F and 11% CAGR in 2026-35F.
• Global EV battery demand2030F: 1.8TWh; 2035F: 2.7TWh9.5% CAGR in 2026-35F, driven by EV/PHEV sales and rising battery capacity per vehicle.
• China global EV/battery share2026F: 65%/78%China’s EV sales share is below its battery share, reflecting battery export and overseas localization expansion advantages.
• China global ESS shareAbout 80%Mainly supported by LFP, cost competitiveness, and supply chain integration.
• China battery shipments5M26: 783GWh, up 48.5% YoYOf which EV batteries were 528GWh, up 35% YoY; ESS batteries were 255GWh, up 88% YoY.
• China ESS new installation forecast2026F: 222GWhPolicy reforms improve the storage profitability model and support a recovery in domestic demand.
• U.S. ESS demand2026F: 113GWh; 2030F: 194GWhDriven by aging grids, renewable energy, AI power demand, and localization policies.
• Robot battery market2030F: 9-16GWh; USD2-4bnGWh volume is smaller than EV/ESS, but ASP is expected to be about 3x that of EV batteries.
• Lithium price forecast2026F/2027F: USD22.0k/24.6k per tonneOn a lithium carbonate basis, 2025 is USD9.7k/tonne, affected by supply delays and export restrictions.
• U.S. BESS cost comparisonChina imports about USD90/kWh; U.S. domestic production about USD150/kWh, or about USD95/kWh after subsidiesAMPC of USD45/kWh and 10% Domestic Content ITC can improve the competitiveness of domestically produced batteries, but AMPC will phase down after 2033.

Impact & implications

The investment implication is that value drivers in the battery industry are shifting from pure EV installation scale toward application mix, policy access, and high-spec product capability. Chinese leaders still have scale and cost advantages, but will face localization constraints in the U.S. and European markets; Korean companies may improve profitability through U.S. ESS and premium EV supply chains; Japanese companies aim for high ROIC through niche segments such as AIDC BBU. A moderate recovery in upstream metal prices benefits resource players, but could also raise battery costs. Robot batteries and AI data center energy storage are new medium- to long-term value pools that deserve close tracking.

Risks

• EV demand outside China may fall short of expectations, especially in the U.S. and Europe due to reduced subsidies, regulatory rollback, macro uncertainty, and slower charging infrastructure rollout.
• U.S. and European policies, tariffs, localization requirements, technology transfer restrictions, and geopolitical changes may disrupt the global supply chain.
• Safety incidents involving EV or ESS batteries may lead to recalls, project delays, tighter regulation, and higher warranty costs.
• Sharp rebounds in prices of lithium, nickel, cobalt, graphite, copper, or rare earths could raise battery production costs and slow the cost-reduction process.
• After the U.S. AMPC subsidy phases down, locally produced ESS batteries may again face competitive pressure from Chinese imports if costs cannot be reduced further.
• Commercialization of new technologies such as all-solid-state, sodium-ion, semi-solid-state, high-nickel, and 4680 may progress more slowly than expected.

What to watch

• Whether lithium supply and demand in 2026-27F remains tightly balanced, and the impact of the CATL Jianxiawo mine, Zimbabwe export restrictions, Greenbushes guidance, and Australian mine restarts.
• Restrictions after 2027 on the use of Chinese batteries in the U.S., changes in MACR/PFE rules, and thresholds for 45Y, 48E, and 45X tax credits.
• The actual pull from Europe’s TCA, IAA, and CRMA on local battery and materials capacity build-out.
• Whether, after China’s ESS policy reform, capacity payments, electricity arbitrage, and peak-shaving services improve project IRRs.
• Whether supply-demand tightness for long-life ESS cells above 314Ah in China continues, and whether the RMB0.30/Wh price recovery can be sustained.
• Procurement pace of rack-level BBU and UPS/ESS systems by AI data centers.
• The actual evolution of robot battery demand for high-nickel, semi-solid-state, all-solid-state, lightweight, and high-rate capabilities.
• The rollout of localized capacity, cost declines, and share gains of Korean ESS makers in the U.S.