A new "ghost story" about energy storage! Even if you pay more, you can't buy battery cells...

Energy storage cells are surprisingly in short supply these days.

Not long ago, a friend in the industry complained to me that energy storage cells are incredibly hard to come by. Many customers are no longer asking about price, but rather about lead times and availability. Some manufacturers are even willing to pay a premium to secure supplies, yet they still face a shortage.

This demonstrates that the current supply and demand in the energy storage cell market has become extremely tight. According to sources familiar with the matter, factory production lines are currently operating at full capacity, with orders backlogged through 2026. Customer shortages have become a common occurrence. Some manufacturers have even directly told buyers that they will likely have no stock until the end of the year.

Why are energy storage cells suddenly so scarce?

In fact, the energy storage cell market has been experiencing explosive growth in recent years. By the first half of 2025, China had added 23.03GW/56.12GWh of new energy storage capacity, representing a 68% year-on-year increase in both power and energy capacity. Global energy storage battery cell shipments reached 240.21GWh, a year-on-year increase of 106.1%.

This year's overseas market has shown strong growth. In the first half of 2025, Chinese companies secured nearly 200 new overseas energy storage orders and collaborations, totaling over 160GWh, a year-on-year increase of over 200%.

On September 25, energy storage battery cell manufacturer Ruipu Lanjun announced that it had signed a 2026 supply agreement in the United States with Energy Vault Holdings, Inc. (hereinafter referred to as "Energy Vault"), a global leader in grid-scale energy storage solutions.

Under the agreement, Ruipu Lanjun will supply 3GWh of energy storage systems to Energy Vault in 2026, and the two parties will further deepen their cooperation in the Australian, US, and European markets. Energy Vault is reportedly a long-term overseas client of Ruipu Lanjun, having already supplied it with over 1.5GWh of energy. In May, BYD Energy Storage signed an energy storage contract with Grenergy, a globally renowned renewable energy company, to supply 3.5GWh of energy storage systems for the sixth phase of Grenergy's Atacama Oasis project in northern Chile. BYD Energy Storage had previously supplied 3GWh of energy storage systems for the first three phases of the project, bringing the total supply between the two parties to 6.5GWh.

This agreement, reportedly the largest energy storage supply agreement in Latin America, involves BYD Energy Storage providing 624 MC Cube-T BESSs to Grenergy for the Elena solar-plus-storage power station. The Elena solar-plus-storage power station is a key component of the Atacama Oasis project, boasting 446MW of photovoltaic capacity and 3.5GWh of energy storage.

Earlier this year, at Abu Dhabi Sustainability Week (ADSW), Masdar, the UAE's international renewable energy company, announced the preferred contractor and supplier for the world's first large-scale, all-weather, gigawatt-scale photovoltaic-plus-storage project. CATL, as the preferred supplier of battery energy storage systems (BESS), will provide 19GWh of storage systems. More notably, recently, lithium battery materials company Longpan Technology announced that its controlling subsidiary, Liyuan (Asia Pacific), had signed a "Lithium Iron Phosphate Cathode Material Procurement Cooperation Agreement" with CATL. The agreement envisions sales of 157,500 tons of lithium iron phosphate cathode materials meeting agreed-upon specifications to CATL's overseas factories between the second quarter of 2026 and 2031, with total contract sales exceeding RMB 6 billion. This suggests that leading manufacturers are also actively expanding production.

In the domestic market, policy changes are driving an optimization of the demand structure. The release of Document No. 136 and the elimination of mandatory storage requirements for new energy sources initially caused market concerns, but power market reforms have instead boosted the economic viability of energy storage. To ensure project profitability, new energy developers have accelerated project construction and grid connection. The grid connection deadline for projects in the first half of the year was also moved forward to May 31st, spurring a short-term rush to install.

The ongoing delivery of overseas orders is one of the key factors contributing to the current temporary imbalance in domestic battery cell supply and demand. Furthermore, technological advancements by battery cell manufacturers are another significant trigger.

The current supply and demand relationship has shifted dramatically. From 314Ah and 280Ah cells being in short supply to 100Ah cells also being in short supply, the primary cause of this current shortage is a temporary mismatch between supply and demand.

It is understood that large-capacity cells such as 314Ah have become mainstream in the market due to their high energy density and compatibility with international standard containers. However, many companies require 3-6 months to convert their production lines from 280Ah to 314Ah, resulting in slow capacity ramp-up and a tight supply of large-capacity cells. Energy storage cell production capacity development takes a long time, requiring 6-12 months from planning to production. By the time demand explodes in 2025, most companies will have yet to implement expansion projects, making it impossible to fill the short-term gap.

At the same time, capacity differentiation is becoming increasingly apparent. Leading companies prioritize large-capacity cells (500Ah and up), while production capacity for small and medium-capacity cells is limited, leading to supply shortages for some cell sizes. Furthermore, some technologically backward companies have low capacity utilization rates, failing to meet high-end market demand, exacerbating structural contradictions.

Leading Manufacturers Running at Full Capacity

Faced with the current surge in orders, domestic energy storage battery companies, despite operating at full capacity, continue to feel pressure. Leading companies face capacity constraints. Production lines at leading companies like CATL and EVE Energy continue to operate at full capacity, with orders booked through the first quarter of 2026.

According to relevant research reports, energy storage cell production schedules have continued to hit record highs domestically and internationally since July. Near-tier manufacturers are operating at full capacity, and some, even with managed or leased production capacity from peers, still cannot meet orders. On September 18th, several listed energy storage battery companies, including Jiangxi Ganfeng Lithium Group Co., Ltd. and Huizhou Yiwei Lithium Energy Co., Ltd., stated in responses to investors that their energy storage cell production capacity is currently at full capacity.

Haichen Energy Storage representatives also stated that Haichen Energy Storage's Xiamen and Chongqing bases have been operating at full capacity since March of this year, and this has continued to this day. Currently, the factory's orders are scheduled until the end of the year, and production plans are extremely full.

Structural differentiation is intensifying, and the industry faces a major reshuffle.

While this wave of energy storage enthusiasm is formidable, it also reveals that many energy storage companies are unable to quickly respond to market vulnerabilities.

Amidst the battery cell shortage, the energy storage market is also undergoing a difficult transition, characterized by the elimination of existing supply chains. Currently, tens of thousands of companies in the energy storage industry are facing deregistration, suspension, liquidation, and other abnormal situations. The surge in project delays and terminations, as well as layoffs and closures, is a direct signal of a deep adjustment and restructuring of the industry.

Brutal price wars have always been a prominent challenge facing the development of the energy storage industry. The competitive battle for overly homogenized products has also brought the entire energy storage market's "technological revolution" to a stalemate.

This vicious competition not only erodes companies' reasonable profits but also likely leads to cutting corners in product materials, process design, and safety precautions, creating significant risks to the long-term safe and stable operation of energy storage projects.

Recently, at the "2025 World Energy Storage Conference," CATL Chairman Zeng Yuqun stated, "Some companies focus less on R&D than on product specifications, while making arbitrary decisions about warranty and lifespan. Judging from operational results, the actual operating lifespan of some projects falls far short of these companies' promises, sometimes even less than a quarter of the promised time."

Regarding the current battery cell shortage, some industry insiders believe the energy storage cell shortage will continue until the second half of 2026, with room for price increases. Furthermore, the current shortage will further impact integrators, and several energy storage cabinet companies are already considering price increases.

Looking ahead, the energy storage industry is entering a new cycle of "dual competition in scale and technology." On the surface, there is an imbalance between supply and demand, but behind the scenes, new industrial opportunities are emerging from the electricity market reform and global energy transformation.