China's Contemporary Amperex Technology Co. Ltd. (CATL), the world's largest battery manufacturer, projects that energy storage systems will represent half of its global sales by 2030, according to a senior company executive. The forecast marks a significant shift for the company, which has traditionally focused on electric vehicle (EV) batteries.
Kevin Tang, CATL's Director of Energy Storage Systems for Europe, stated that the energy storage segment currently accounts for approximately 25% of the company's sales, a dramatic increase from just 2% five years ago. Speaking at the International Photovoltaic Power Generation and Smart Energy Conference in Shanghai, Tang attributed the growth to rising global renewable energy capacity, which requires large-scale battery storage to manage intermittent power generation.
From EV Dominance to Storage Expansion
CATL was founded in 2011 and built its reputation supplying lithium-ion batteries for electric vehicles. EV batteries still account for roughly three-quarters of the company's total sales. However, the rapid expansion of solar and wind power installations worldwide is creating a parallel demand for energy storage systems that can stabilize grids and store excess power for later use.
Tang emphasized that energy storage is becoming a critical component of modern power infrastructure, enabling higher penetration of renewables while addressing grid congestion and reliability concerns. This trend is expected to accelerate as countries pursue net-zero emissions targets and invest in grid modernization.
Europe Emerges as a Key Market
Europe has become CATL's third-largest energy storage market, behind China and the United States. Tang noted that European customers are investing in a mix of storage projects, including renewable-plus-storage installations and grid-side facilities designed to alleviate network bottlenecks.
CATL has established a manufacturing presence in Europe with battery plants in Germany and Hungary, and recently began construction of a new facility in Spain through a joint venture with automaker Stellantis. These investments position the company to serve growing European demand while navigating local content requirements.
Tang indicated that the energy storage sector has not faced the same level of pressure as the automotive industry regarding stricter local sourcing rules aimed at protecting domestic industries. However, profitability remains a challenge across the broader storage industry, as developers and manufacturers grapple with project economics.
Safety and Supply Chain Investments
To address customer concerns about battery safety, CATL announced this week a 3 billion yuan investment in a dedicated energy storage testing center. The facility will simulate power grid conditions and investigate the causes of storage-related fires and explosions, which Tang described as major concerns among potential buyers.
The company is also monitoring rising raw material costs. Tang noted that prices of lithium, copper, and aluminum have increased following the US-Israel conflict with Iran, creating headwinds for storage manufacturers. However, he expressed confidence that costs would decline over the longer term as the supply chain matures.
CATL operates lithium mining operations in southern China and runs what it describes as the world's largest battery recycling plant, enabling the recovery of key raw materials. These vertical integration efforts aim to strengthen supply chain control and reduce exposure to price volatility.
Market Context
The energy storage outlook comes amid broader geopolitical and energy market uncertainty. Recent disruptions in the Middle East have raised concerns about energy infrastructure damage, with Rystad Energy estimating potential costs could reach $58 billion. Meanwhile, the IEA has warned that Middle East energy production recovery could extend to two years, underscoring the importance of energy storage in enhancing grid resilience.
CATL's strategic pivot toward storage aligns with broader industry trends. As renewable energy deployment accelerates, battery storage is increasingly viewed as essential for grid stability and energy security. The company's investments in European manufacturing, safety testing, and supply chain control reflect a long-term commitment to capturing a larger share of this growing market.
This article is for informational purposes only and does not constitute financial advice.
