OEM pivot to Energy Storage Systems (ESS) boosts battery demand [developing]
Key Questions
Why are Korean battery manufacturers facing Q1/Q2 losses despite growing demand?
Korean battery makers like LGES and others reported Q1/Q2 losses due to expansion costs and market pressures, but these are being offset by ramps in Energy Storage Systems (ESS) and AI sectors. ESS is expected to drive over 20% of LGES revenue with 50GWh capacity in North America by year-end for Tesla Megapack.
What is CATL's major sodium-ion battery deal?
CATL confirmed a 60GWh sodium-ion battery deal with Beijing HyperStrong for grid storage, marking the largest such agreement. This positions Na-ion as a cost-effective complement to LFP batteries, especially amid supply risks.
How does the US defense market impact battery suppliers?
The US $1T defense battery market bans Chinese suppliers like CATL and BYD post-2027, favoring Korean players such as LGES, SK On, and SDI. Korean firms have committed $45B in US investments, gaining a strategic edge.
What is the projected US battery surplus in the coming years?
The US anticipates a surplus of 58-60GWh in 2025-2026 due to rapid capacity build-out. This occurs alongside growing ESS demand from AI data centers and grid storage.
How does the OEM pivot to ESS boost overall battery demand?
OEMs are shifting to ESS for grid and AI applications, countering EV slowdowns, with China targeting $50B by 2030. Innovations like CATL's Na-ion and longer-duration lithium-ion systems support large-format cells for this demand.
Korean Q1/Q2 losses offset by ESS/AI ramps (LGES ESS 20%+ rev/NA 50GWh EOY/Tesla Megapack; Korean $45B US; CATL 60GWh Na-ion HyperStrong confirmed; EVE/Samsung; US $1T defense bans CATL/BYD post'27 favors LGES/SK/SDI; China $50B'30). US 58/60GWh'25-26 surplus; Na-ion complements LFP amid SK On Nissan risks.