"Chinese and Korean firms are extending their battery battle from EVs to grid storage”, reported the Financial Times on April 28th. The surging global demand for renewable energy and data centers is driving rapid growth in the grid-scale battery storage market, creating a new battleground for Chinese and Korean battery giants—who have already been locked in fierce competition in the EV battery sector.
The report noted that Chinese battery manufacturers now account for nearly 90% of global energy storage system (ESS) production capacity, holding over 80% and 75% market shares in the U.S. and Europe, respectively. However, with rising U.S. tariffs, Korean firms are seeking to regain ground in Western markets.
Energy storage systems use battery modules managed by software to help grids—as well as homes, businesses, and factories—handle fluctuations in wind and solar power supply. For the next decade, as electricity demand surges from AI hardware, EVs, and other clean technologies, ESS will also provide critical backup support for power grids.
A International Energy Agency (IEA) report of this month predicts that global electricity demand from AI data centers will double in the next five years, accounting for nearly half of U.S. power demand growth by 2030."Energy storage is often seen as the least glamorous part of renewables, but it’s actually the core technology ensuring grid stability in the future." said Iola Hughes, research director at battery consultancy Rho Motion.
According to Statistics from Rho Motion, ESS batteries’ market share has risen from 5% in 2020 to 20% today. Global storage capacity grew 52% between 2023 and 2024 and is projected to jump from 340 gigawatt-hours (GWh) last year to 760 GWh by 2030—equivalent to 7.6 million EV batteries. The booming market has even helped Tesla offset sluggish EV sales, with soaring demand for its Powerwall home batteries and Megapack grid-scale storage systems. CEO Elon Musk described the business as "spreading like wildfire."
Hughes told the FT that Korean battery makers once led the industry with their high-nickel batteries. However, a series of fires linked to these batteries over the past decade—combined with the rise of cheaper, increasingly efficient lithium iron phosphate (LFP) batteries—has led the energy sector to shift away from high-nickel chemistries. "The diverging fortunes of Chinese and Korean storage firms tell the story of two battery markets," said Neil Beveridge, head of energy research at Bernstein in Hong Kong.
China’s dominance in energy storage has raised concerns among Western policymakers, with the U.S. banning Chinese battery systems in military facilities. This has given hope to Korean firms transitioning to LFP production—or even repurposing EV battery lines. LG Energy Solution, the world’s largest non-Chinese battery producer, said tariffs make "non-Chinese companies with U.S. production bases more competitive."
Data from the Atlantic Council shows that China exported $15.3 billion worth of lithium-ion batteries to the U.S. last year, widening its lead over Korean rivals. "Chinese LFP batteries are popular in the U.S. due to their price competitiveness. Plus, they can use more battery cells, making them cost-effective for data centers," said an industry insider.
UBS analyst Tim Bush noted that while Korean firms like LG and Samsung SDI may gain "a bigger share of a smaller market" due to tariffs, their mass-production capabilities and cost competitiveness in LFP batteries remain unproven. The future landscape is still highly uncertain.