Global Battery Weekly: ESS demand, North American localization, and commercialization of new technologies continue to advance

Overview

Bernstein's latest Global Energy Storage: Battery Weekly 20 July summarizes global battery and energy storage industry news, price performance, valuations, and company models. Core themes include localization of North American ESS and EV battery supply chains, Korean battery makers competing for Tesla and AI data center orders, Chinese companies expanding overseas in energy storage and solid-state battery equipment, the advancement of large-scale energy storage and electrification policies in Europe, and the commercial expansion of sodium-ion and LFP technology pathways.

Core views

The main message of the report is that global energy storage demand is still expanding, especially in utility-scale ESS, AI data center power supply, solar-storage integration, and grid frequency regulation scenarios. Companies such as Samsung SDI, LGES, CATL, Envision AESC, and Gotion all have capacity, order, or technology progress. Regionally, North America emphasizes local manufacturing and supply chain compliance, Europe emphasizes storage agreements and electrification targets, Chinese companies continue exporting capacity, equipment, and technology, and newer markets such as Africa and Japan are also developing new application scenarios.

Analysis framework

The report uses a weekly industry-tracking approach, placing global news events, project scale, order value, technical parameters, policy targets, commodity prices, and listed company valuations within the same framework to assess changes in battery industry chain demand, supply, technology pathways, and market sentiment.

Methodology notes

• industry trackingBattery Weekly

  event-driven industry chain monitoring

  By tracking weekly information such as company orders, capacity start-ups, project grid connections, policy targets, and technical certifications, the report observes changes in battery and energy storage demand.

• industry chain analysisBattery value chain mapping

  breaking down the chain from resources, materials, and cells to systems and end applications

  The report covers lithium, cobalt, nickel, cathodes, anodes, separators, electrolytes, battery cells, ESS systems, and EV end markets, facilitating comparison of prices, valuations, and demand elasticity across different segments.

• market valuationPrice performance and valuation table

  cross-sectional comparison of price performance and valuation

  The appendix table lists battery manufacturers, lithium miners, cathode, anode, separator, electrolyte, and equipment companies, together with price, market cap, P/E, EV/EBITDA, and price changes over different periods.

Asset mapping & comparison

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

• CATL

  global battery leader and supplier of sodium-ion energy storage technology

  Strengths

  The report states that CATL signed a 5 GWh European sodium-ion ESS deployment agreement with Alfen and maintains an Outperform rating in the company table.

  Weaknesses

  Valuation and market share may be affected by European localization, trade policy, and battery technology substitution.

  Comparison

  Compared with Korean battery makers, CATL is more representative in LFP, sodium-ion, and large-scale manufacturing; compared with material companies, it benefits more directly from ESS system demand.

  Risks

  Overseas policy restrictions, price competition, raw material volatility, and technology pathway shifts.

• LG Energy Solution

  supplier of Tesla EV batteries and North American ESS

  Strengths

  Its Nanjing plant is expanding capacity to serve Tesla Model Y demand, and it will supply LFP systems for Google's large solar-plus-storage project.

  Weaknesses

  The company is rated Market-Perform in the table, with relatively high valuation and weak share price performance over the past month.

  Comparison

  Compared with Samsung SDI, LGES stands out more in existing Tesla supply and large solar-plus-storage projects; compared with CATL, the value of its North American local supply chain is more important.

  Risks

  Tesla demand volatility, changes in U.S. policy, LFP competition, and margin pressure.

• Samsung SDI

  beneficiary of ESS, UPS, and the potential Tesla supply chain

  Strengths

  It plans to build a dedicated LFP line in the U.S. for Tesla ESS and won the largest share in Korea's AI power distribution grid ESS project; its UPS batteries passed UL fire safety tests.

  Weaknesses

  The appendix table shows a Market-Perform rating, and short-term share price volatility is relatively high.

  Comparison

  Compared with LGES, Samsung SDI stood out more this week in AI power distribution grids and data center safety certification.

  Risks

  Execution of U.S. ESS projects, realization of Tesla supply, EV demand timing, and changes in safety standards.

• Sungrow

  energy storage and inverter industry chain-related name

  Strengths

  The appendix table lists an Outperform rating with a target price of RMB185 versus the current price of RMB105.84.

  Weaknesses

  There are relatively few event disclosures in the main text this issue, and the investment case is more driven by existing optimistic ESS expectations.

  Comparison

  Compared with battery cell companies, Sungrow is more exposed to systems and power electronics and benefits from growth in energy storage installations.

  Risks

  Overseas market competition, pricing pressure, and project delivery cycles.

• Tianqi Lithium

  exposure to lithium resource prices and battery demand elasticity

  Strengths

  The appendix table lists both the A-share and H-share as Outperform, supported by lithium price expectations driven by ESS and battery demand.

  Weaknesses

  Lithium prices are notably volatile in the short term, with LiCO and LiOH spot prices down 11% and 13% respectively over one month.

  Comparison

  Compared with battery manufacturers, Tianqi is more sensitive to upstream lithium prices.

  Risks

  Lithium price declines, supply expansion, inventory cycles, and end demand coming in below expectations.

Key data

• Samsung SDI-Tesla ESS potential supply agreementKRW 3-5 trillionSamsung SDI plans to build a dedicated LFP production line for Tesla ESS at the StarPlus Energy plant in Indiana, U.S.
• Hyundai-SK Battery Manufacturing America capacity35 GWh/yearThe Georgia plant involves an investment of about USD 5 billion and can supply batteries for about 300,000 EVs.
• Google Steel River Energy Center storage scale1.9 GWh first phases; 2.9 GWh by 2029LGES will supply North America-made JF2 LFP battery systems.
• Korean AI power distribution grid ESS project640 MWh total; Samsung SDI 420 MWhSamsung SDI has secured about 66% of the awarded capacity.
• Share of eco-friendly vehicle registrations in Korea in the first half50.4%EV registrations rose 112.6% year over year to 198,969 units.
• Gotion and SANY order>10 GWh through 2027Targeting battery demand from new energy heavy trucks and construction machinery.
• Envision AESC Yichang Super Factory100+ GWhIts first 790 Ah energy storage cell offers more than 12,000 cycles and 96% round-trip efficiency.
• CATL-Alfen sodium-ion energy storage partnership5 GWh from 2027For deployment of Tener Sodium sodium-ion ESS in the Netherlands and Western Europe.
• Zelestra Italy energy storage project500 MW / 2 GWhSigned a storage capacity offtake agreement with EnBW, with operations expected by the end of 2028.
• LFP battery pack spot costUS$76/kWhThe commodity price table shows the 17-Jul LFP spot battery pack cost.

Impact & implications

For investors, the information in this issue reinforces three directions: first, ESS is becoming an important incremental source of battery demand, driven by grid congestion, renewable energy grid connection, and AI data center electricity demand; second, North American and European markets place greater emphasis on localized manufacturing, IRA compliance, and long-term capacity agreements, benefiting battery makers with overseas capacity and customer certification capabilities; third, sodium-ion, solid-state batteries, long-life LFP, and battery safety technologies are moving from R&D toward commercialization, but different technology pathways will reshape material demand and profit distribution.

Risks

• U.S. EV demand may come in below expectations, potentially affecting the ramp-up of North American battery capacity.
• Price volatility in lithium, nickel, cobalt, and other raw materials may affect battery maker margins and material company earnings.
• Changes in technology pathways such as LFP, sodium-ion, and solid-state batteries may alter the existing competitive landscape for materials and battery cells.
• Overseas localization, IRA compliance, permitting approvals, and trade policy may affect project execution.
• Large ESS projects carry risks related to construction, grid connection, fire safety, and realization of long-term returns.
• Some companies have high valuations, and if order delivery or profit improvement falls short of expectations, their share prices may correct.

What to watch

• The production ramp timing of Samsung SDI's dedicated LFP line in the U.S. for Tesla ESS at end-2026 and in 2Q27.
• LGES's actual shipments, margins, and North American capacity utilization for Tesla and Google's solar-plus-storage projects.
• Cost, lifetime, and efficiency validation of CATL Tener Sodium sodium-ion ESS after its 2027 deployment in Europe.
• Follow-on order expansion for Korea's AI power distribution grid ESS projects and safety standards for AI data center UPS batteries.
• Policy implementation for Europe's 2040 electrification targets, Italy's 2 GWh storage agreement, and Chinese automaker investment projects in Spain.
• Commercialization progress in equipment, materials, and pilot lines after implementation of China's solid-state battery standard GB/T 43568-2026.
• Ongoing weekly changes in LFP cell and battery pack costs, lithium salt prices, and key material prices.