China's battery storage surges to 155 GW, Chinese suppliers capture 90% of market

U.S. tariffs and tax rules curb Chinese battery imports

China’s battery-storage market share has grown rapidly in the space of five years, according to a report published Sunday by the Wall Street Journal. The country’s nonconventional energy-storage capacity — mostly batteries — rose to about 155 gigawatts as of the first quarter of 2026, up from less than 4 gigawatts in 2021, the Journal reported. Beijing said in June that it was targeting 300 gigawatts by 2030.

The expansion is driven by China’s large investment in solar and wind power, which produce electricity intermittently. Battery-storage systems, often the size of shipping containers, absorb excess power during sunny and windy conditions and release it when demand is higher. Beijing is also betting on large-scale storage to help manage the strain on power grids from the artificial-intelligence boom.

“No matter which market you’re in the world, the obvious choice would be to go for these batteries which the Chinese players had mastered,” Iola Hughes, head of research at Benchmark Mineral Intelligence, told the Journal.

All 10 of the world’s top battery-cell suppliers of energy-storage systems in the first quarter of 2026 were Chinese, Hughes’ firm said, together capturing 90% of the global market. Last year, more than 90% of the battery-storage systems installed in the United States used Chinese cells, according to Benchmark.

China also holds a large share of the processing of key raw materials including lithium, cobalt and graphite. Since 2023, Beijing has tightened export limits on some battery materials and advanced battery technologies in the wake of geopolitical tensions with Washington, the Journal reported.

Even Tesla, the leading U.S. storage-system seller, is tied to Chinese supply: at its Shanghai factory, Tesla produces Megapack systems for markets outside the U.S. using battery cells and components from China-based Contemporary Amperex Technology, or CATL. Ford licenses CATL’s technology to produce storage products in the U.S.

The U.S. is second in battery storage after China, with 57 gigawatts at the end of 2025, a figure that Wood Mackenzie estimates could reach 200 gigawatts in five years.

But U.S. policy has begun to push back. President Trump’s tariffs on Chinese imports have eroded the cost advantage that made-in-China batteries had held. Under the One Big Beautiful Bill Act, storage projects that use components from Chinese suppliers cannot receive federal tax credits.

“If it weren’t for these policy constraints, Chinese companies would still be gaining market share,” Zheng Jiayue, an analyst at Wood Mackenzie, told the Journal.

Despite its storage expansion, China still generates more than half its power by burning coal. Beijing wants non-fossil energy to become the primary source of electricity generation by 2030 and is requiring all new data centers to derive at least 80% of their power from renewables.

Chinese battery makers have focused on lithium ferrophosphate, or LFP, batteries that use inexpensive iron and are suited to energy storage, according to Benchmark. Last September, Robin Zeng, founder of CATL — the world’s biggest battery maker — warned of “vicious price competition” among suppliers, saying hard-pressed companies were cutting corners on quality. CATL expects its energy-storage business to account for half of its global revenue by 2030, up from 15% in 2025, according to people familiar with the company.