Trillion-Dollar Investment Boom: The Biggest ‘Rival’ of CATL Emerges

Concerns about the energy crisis triggered by the surging demand for AI computing power are escalating. Recently, Elon Musk proposed that large-scale industrial battery storage systems could double the effective generating capacity of the U.S. power grid, stating, “Running power plants at night to charge battery packs and discharging them during the day to power AI.” As Musk suggested, battery storage systems function like an “energy bank,” storing excess electricity from the grid and delivering it precisely when AI computing power peaks. This not only alleviates the energy consumption concerns of AI but also accelerates the efficient use of energy.In response to this growing demand, on October 5th, the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) of China jointly issued the “Action Plan for the Large-Scale Construction of New Energy Storage (2025-2027),” setting a clear goal to reach 180 GW of new energy storage installations by 2027. This target provides strong momentum for the rapidly developing energy storage sector. Over the next three years, China’s energy storage industry is entering a critical period of large-scale development, with a market of about 35 GW of new installed capacity per year accelerating to form. According to the latest “2025 H2 Energy Storage Market Outlook Report” by Bloomberg New Energy Finance (BNEF), global cumulative installed capacity is expected to reach 2 TW / 7.3 TWh by 2035, driven by strong demand from markets in China, Europe, and the Middle East.

As the global energy storage market enters an explosive growth phase, the trillion-dollar investment boom has made companies like Sungrow Power Supply, a leading energy storage system integrator, one of the biggest beneficiaries. This is reflected in its stock price, which has more than doubled this year, and a market capitalization now stable at 400 billion yuan.Based on Sungrow’s mid-year financial report, energy storage has overtaken solar photovoltaic as the company’s largest revenue source. The company is on track to meet its target of shipping 40-50 GWh of energy storage this year, with overseas revenue contributing 58.3% of its total sales in the first half of the year, surpassing domestic sales for the first time. On October 5th, Sungrow also officially submitted its H-share listing application to the Hong Kong Stock Exchange, further supporting its global expansion.CATL’s Expansion in Energy Storage:The core component of an energy storage system—battery cells—typically accounts for over half of the total cost of the system. As one of Sungrow’s main suppliers, CATL (Contemporary Amperex Technology Co. Ltd.) is also in a large-scale expansion phase for its energy storage business. In Q3 of this year, CATL shipped around 180 GWh of batteries, with approximately 20% of that being for energy storage. “Currently, energy storage shipments are constrained by delivery, as our production capacity has been fully utilized. As production capacity expands, deliveries will increase.

The capacity bottleneck will gradually ease over the next couple of quarters, and delivery is no longer the main issue,” CATL’s management disclosed during a recent Q3 earnings call.Driven by market demand and favorable policies, energy storage system technology is beginning to diversify, with the “large cell” upgrade trend becoming particularly apparent. CATL and Sungrow have both chosen different technological paths in this regard. CATL believes that the 587Ah battery cell is the “optimal solution” for large-capacity energy storage, with a single 20-foot container offering 6.25 MWh of capacity. Sungrow, on the other hand, has introduced a 30-foot energy storage system with a capacity of 12.5 MWh, using 684Ah cells. Industry insiders believe that these two vastly different battery products will gradually capture the market and jointly drive energy storage technology towards higher efficiency and lower costs.At the heart of this technology race is a strategic shift where the two companies, once upstream and downstream partners, are now direct competitors. On one hand, CATL, the global leader in energy storage cell shipments for four consecutive years, has planned an annual energy storage production capacity of over 200 GWh and is expanding into the downstream system integration sector, prompting Sungrow to strengthen its cooperation with other battery manufacturers. On the other hand, Sungrow, as the global leader in energy storage systems, is focusing more on the downstream application of energy storage systems, particularly in the solar-storage sector, while simultaneously redefining energy storage cells.

Capital Market Dynamics and Strategic Differences:In terms of capital market performance, CATL’s A-shares have risen by over 50% this year, lagging behind Sungrow. However, despite Sungrow’s impressive stock price and performance, its net profit (118.8 billion yuan in the first three quarters of this year) is still significantly smaller compared to CATL (490 billion yuan in the same period), and its market capitalization also remains far behind, with CATL’s valuation exceeding 1.7 trillion yuan.More importantly, from a core competitiveness perspective, while Sungrow holds a leading position in the global energy storage system market, it faces pressure in cost and supply chain stability because it does not produce the core component of the energy storage system—the battery cells—and must rely on external suppliers. In contrast, CATL, which controls core technology, enjoys advantages in this regard. This difference is reflected in their respective development strategies: CATL focuses on an integrated approach across the entire industrial chain, with an emphasis on technological independence and control, while Sungrow is more focused on system integration and expanding its presence in the application side of the market.Meanwhile, as the energy storage market expands rapidly, the upstream lithium resource sector is also showing new dynamics. Recently, CATL increased its stake in Tianhua New Energy, while Zhongchuang Xinhang and Huayou Cobalt have entered into partnerships with Shengxin Lithium.

These developments indicate a new wave of “mining rush” in the lithium industry, driven by the unexpected growth in energy storage cell demand and the industry’s failure to meet expected new production capacity during a period of market stagnation. Clearly, changes in the supply-demand dynamics of lithium mining will have a profound impact on the stability of the energy storage industry chain.Investment Insights and Market Outlook:Looking at investment value, the two companies exhibit different characteristics. Sungrow shows high growth elasticity, with its future potential primarily depending on the continued growth of the energy storage sector and the expansion of its new businesses. In contrast, CATL offers stronger certainty, with its valuation supported by its already proven global leadership position and wide economic moat. This difference provides investors with diverse options based on their risk preferences.Undoubtedly, the positioning and value of energy storage in the new power system are undergoing a fundamental transformation, meaning the competitive landscape of the energy storage market is still evolving. The next three years will be crucial for Chinese energy storage companies to secure technological leadership and expand their global market presence. In this competition, whether it’s Sungrow or CATL, both may just be at the beginning of a golden age in the energy transformation process.