On August 13, 2025, the China Chemical and Physical Power Sources Industry Association released the "Proposal on Maintaining Fair Competition Order and Promoting Healthy Development of the Energy Storage Industry" (Draft for Comments), with 149 units participating in the joint initiative, including leading companies in the industry chain such as BYD, Eve Energy, Huawei Digital Energy, Hicharge Energy, Guoxuan High-Tech, and Envision Energy.

This large-scale joint action directly targets the increasingly serious "price war" issue in the energy storage industry. According to incomplete statistics from the CESA Energy Storage Application Branch industry database, in the first half of 2025, the average winning bid price for lithium battery energy storage systems was 0.49 yuan/Wh, a decrease of more than 70% from the peak period.

The "price war" in the energy storage industry has entered a white-hot stage. The average winning bid price for energy storage systems in 2024 is 0.628 yuan/Wh, a decrease of 43% year-on-year.

In the Inner Mongolia Energy Dongsu Special High Voltage Renewable Energy Phase III Base Project, the winning bid price is as low as 0.481 yuan/Wh. The Xinjiang Huadian Urumqi Energy Storage Project is even lower at 0.405 yuan/Wh.

In March of this year, the procurement bidding for the 6GWh energy storage system by Xinjiang Huadian attracted bids from 57 companies, with the lowest bid being only 0.398 yuan/Wh, which is considered by the industry as "suicidal bidding."

This vicious competition has seriously affected the healthy development of the industry. Behind the plummeting prices, on one hand, is the advancement and iteration of technology, and on the other hand, is the accelerated "involution" of the industry.

The serious problem of overcapacity is behind the price war. According to InfoLink Consulting's forecast, the energy storage cell capacity will reach 750GWh in 2024.

In 2024, the actual global shipment volume of energy storage cells was only 314.7 GWh. The capacity utilization rate was less than 50%.

The 24th Trend Industry Research Institute predicts that by 2025, the global capacity planning for power and energy storage battery companies is expected to exceed 8000GWh, but the market demand in an optimistic scenario is only 2010GWh. The supply and demand deviation is more than 4 times.

This situation of overcapacity is closely related to past policy promotion. In 2021, the National Development and Reform Commission and the National Energy Administration issued the "Guiding Opinions on Accelerating the Development of New Energy Storage," which proposed that by 2025, the installed capacity of new energy storage should reach over 30 million kilowatts.

Under the stimulus of favorable policies, enterprises are accelerating their entry into the energy storage sector. According to Qixinbao data, between 2021 and 2024, more than 200,000 new energy storage-related companies have been established in China. In 2024 alone, the number of newly registered energy storage companies reached 91,700, a year-on-year increase of over 17%.

In this "involution" competition, leading companies can still maintain strong competitiveness through technological advantages and brand effects.

In the top 10 manufacturers of energy storage battery shipments in 2024, CATL ranks first with a market share of 41% (93GWh). Its gross profit from energy storage battery business last year was 15.376 billion yuan, with a gross profit margin of about 27%, far ahead of its peers.

Ranked second, Yiwei Lithium Energy, although last year's energy storage battery shipment volume (50.45GWh) was 54% of CATL's, the corresponding gross profit was only 2.802 billion yuan, with a gross profit margin of 14.7%.

Ranked third, Haichen Energy Storage is sprinting towards its IPO, with a battery shipment volume of 35.1 GWh last year, about 40% of CATL's, but corresponding gross profit was 719 million yuan, with a gross margin as low as 9%.

The lower the ranking of the enterprise, the less bargaining power it has. Ruipulan Jun lost 1.353 billion yuan last year, with a gross profit margin of only 4.1%.

For the majority of small and medium-sized manufacturers, survival is even more difficult. In the large-scale energy storage bidding market, it is hard to get a share, and overseas market orders are also concentrated in large enterprises that have accumulated rich experience in going abroad in the early stages.

According to Qixinbao data statistics, from 2021 to 2024, 38,000 newly established energy storage companies have been canceled or revoked.

On August 13, the China Chemical and Physical Power Sources Industry Association issued the "Proposal on Maintaining Fair Competition Order and Promoting Healthy Development of the Energy Storage Industry" (Draft for Comments).

A total of 149 units participated in the above initiative, including BYD, Eve Energy, Huawei Digital Energy, Haichan Energy Storage, Guoxuan High-Tech, Envision Energy, and other leading enterprises, covering upstream and downstream of the industry chain such as battery manufacturers and system integrators.

According to Liu Yong, Secretary-General of the Energy Storage Application Branch of the China Chemical and Physical Power Industry Association, 9 out of the top ten lithium-ion battery manufacturers participated in this initiative. Among the top ten energy storage system integrators, 8 companies participated in this initiative.

The initiative emphasizes that enterprises should quote prices based on their own operating conditions, cost assessments, and project risks, avoiding irrational low-price behavior to prevent "bad money driving out good money."

The introduction of this initiative is seen by the outside world as a signal that the energy storage industry has officially begun to "reverse involution."

Compared to the previous "gentle guidance," the determination in this round of "anti-involution" is stronger, and the measures are more decisive.

On June 27, the Standing Committee of the National People's Congress voted to pass the newly revised "Anti-Unfair Competition Law of the People's Republic of China," which clearly prohibits behaviors such as "selling goods at prices lower than cost," providing a legal basis for combating "involution-style" competition.

On July 1, the sixth meeting of the Central Financial Committee emphasized, "Govern enterprises' low-price disorderly competition in accordance with the law and regulations, guide enterprises to improve product quality, and promote the orderly exit of backward production capacity."

On July 24, the "Draft Amendment to the Price Law of the People's Republic of China (Solicitation for Comments)" was publicly released for comments, improving the identification standards for low-price dumping, regulating market price order, and addressing "involution" competition.

The Politburo meeting of the Central Committee of the Communist Party of China held on July 30 emphasized, "Deeply promote the construction of a unified national market and continuously optimize the market competition order. Govern enterprises' disorderly competition according to laws and regulations. Promote capacity governance in key industries."

In August 2024, the "Regulations on Fair Competition Review" will be implemented, which clearly prohibits local governments from creating "tax havens" through tax incentives, financial rewards, and other means.

In April of this year, the "Implementation Measures for the Fair Competition Review Regulations" officially came into effect, requiring local authorities to refrain from granting specific operators various special preferential policies without legal or administrative regulations as a basis or without the approval of the State Council.

The energy storage industry is in a transition period from policy incentives to market-driven dynamics, and it is inevitable to have a wait-and-see or even sluggish sentiment. It requires a process of adapting to the "new water temperature" and adjusting business development strategies.

In fact, there are signs that the growth of new energy storage installations is slowing down. From 2022 to 2024, the annual growth rate of newly installed capacity shows a "step-down" trend, at 200%, 150%, and 103% respectively. The expansion of scale, which relies on policy dividends but lacks support from actual market demand, is unsustainable.

The future energy storage industry will rely more on technological innovation and value creation to achieve sustainable development. Enterprises need to focus on the following aspects:

One is to strengthen technological innovation and improve product performance and quality. For example, the "100 Megawatt High Voltage Cascaded Energy Storage System Project" of the State Energy Group Qinghai Gonghe Company has achieved four key breakthroughs targeting the characteristics of the 10 million kilowatt-level new energy base in Hainan, Qinghai, and the nearby high voltage direct current transmission.

Second, expand application scenarios and explore new business models. For example, Haibosi Chuang has signed a cooperation agreement with CITIC Bank and CITIC Financial Leasing Co., Ltd. The three parties will cooperate in the field of "energy storage + finance" to create a financing model of "energy storage assets + specialized operation + comprehensive financial solutions."

Third, actively participate in the electricity market to realize value through market-oriented methods. New energy storage is gradually evolving to participate in the ancillary services market, spot market, and medium- to long-term market as an independent entity.

The "anti-involution" in the energy storage industry is just the beginning.

From a global perspective, the demand for overseas energy storage markets has surged, with some companies even experiencing situations where "increased prices cannot secure orders," resulting in a scenario where "a single chip is hard to come by."

This means that whether Chinese energy storage companies can seize the opportunities of the global energy transition and shift from "price wars" to "value wars" will determine their position in the global market.

The road to rebuilding industry order is long, but only by bidding farewell to disorderly competition can China's energy storage industry truly achieve high-quality development and occupy a dominant position in global competition.