Energy Storage "Battle Royale": 50,000 Companies Fall Before Dawn

From 2022 to 2025, in just four years, China’s cumulative installed capacity of new energy storage increased from 3.3 GW to 144.7 GW, a 43.9-fold growth.

Behind the rapid growth of energy storage installations is the industry’s intense “involution.” Over these four years, the prices of energy storage cells/systems have repeatedly hit new lows, capacity has become severely oversupplied, and industry chain companies are generally operating at losses.

It wasn’t until mid-2025 that the industry showed signs of improvement, with downstream demand for energy storage surging, and even some battery cells becoming “hard to find.” As a result, the performance of most listed energy storage companies began to improve.

But the tragedy is that, on the eve of industry recovery, over 50,000 energy storage companies went bankrupt, including some once-dominant veterans and dark horse enterprises. They didn’t wait for the industry cycle to turn favorable; their tragic collapse serves as a stark warning to future players — in this brutal industry, only those who survive have the right to talk about the future.

The “Explosion” of Companies Entering Energy Storage

If you ask an energy storage practitioner about their biggest feeling over the past four years, the likely answer is two words: involution.

There are many reasons for involution, and the explosive increase in the number of entrants is one of the key factors.

Tianyancha shows that currently, there are over 436,000 energy storage companies established in China. In 2025 alone, 108,000 new companies were founded; in 2024, 93,000; in 2023, 79,000; in 2022, 46,000; and as early as 2021, only 16,000. Before 2019, the number of new energy storage companies each year was only a few thousand.

In other words, from 2022 to 2025, 327,000 new companies emerged, accounting for 75% of the total energy storage enterprises. The number of newly established companies in the most recent year alone accounts for a quarter of the total. Moreover, this trend continues. Data shows that in January 2026, over 9,300 new energy storage companies were founded. Projected over the full year, the number of new entrants in 2026 could exceed 110,000, setting a new record.

Hua Xia Energy Network notes that among these new entrants, many are cross-industry players. If companies from photovoltaic, wind power, and other related fields are considered industry synergy, then companies from real estate, apparel, and consumer sectors are a bit of a stretch.

As more competitors flood in, the price war in the energy storage industry has also intensified.

In early 2022, mainstream energy storage cell prices were above 1.08 yuan/Wh; in the second half of 2022, prices trended downward, falling below 1 yuan/Wh; by 2023, the average price had plummeted to 0.45 yuan/Wh, a 50% cut. By the end of 2024, prices dropped to 0.3 yuan/Wh, and in 2025, the lowest winning bid price reached a “floor” of 0.26 yuan/Wh.

During the fiercest phase of the price war, a popular joke circulated: downstream clients asked cell manufacturers for quotes, and salespeople said “0.3 yuan/Wh.” Clients, wanting to push prices lower, asked, “Can you give me the cost price?” The sales reply was, “0.35 yuan/Wh.”

Under this price war, the entire lithium battery industry chain, including energy storage, fell into a loss spiral.

The phenomenon of “refusing orders is waiting to die, accepting orders is courting death” has been a true reflection of countless energy storage companies over the past three years. They were forced into this “suicidal” price war, sacrificing profits for tiny market share, betting on outlasting competitors and hoping tomorrow will be better. Unfortunately, most did not win that bet.

50,000 Companies Falling Before Dawn

“As giants fall, they are still warm,” said Ma Huateng.

In the wave of losses in energy storage, no company was spared. As price wars intensified, unprofitable companies could only bleed slowly until they finally closed.

Tianyancha shows that, to date, 63,000 energy storage companies are in abnormal status (including deregistration and revocation). Among them, 4,800 in 2025; 15,000 in 2024; 19,000 in 2023; 11,500 in 2022; and 2,500 in 2021.

This means that from 2022 to 2025, during the four years of price wars, about 50,000 companies have been deregistered or revoked, accounting for 80% of all energy storage enterprises.

Hua Xia Energy Network notes that among these companies that fell before dawn, there are some once-glamorous star enterprises.

For example, Huafu Storage, a star stock on the New Third Board, was profitable and grew by 66.21% and 102.4% year-over-year in 2022. But within just half a year, the situation turned sharply, and in the first half of 2023, its revenue fell 43.66% YoY, with losses exceeding 9.65 million yuan, an 8,396.43% increase in losses.

In the second half of 2023, Huafu Storage continued to lose money. Due to declining performance and delayed disclosure of annual reports, it was delisted from the New Third Board in November 2024. This 14-year-old veteran of energy storage quietly exited the stage.

Funnengbao Storage, founded in 2019, was also pushed to the brink of bankruptcy during the price war and began asset bankruptcy auctions in August 2024.

Even more tragic is Sandun New Energy, established in 2011 with a registered capital of 3.2 billion yuan. Since December 2023, it has filed for bankruptcy reorganization twice. By the end of 2023, its liabilities soared to 3.793 billion yuan, with revenue of only 262 million yuan and a net loss of 524 million yuan.

In September 2024, Sandun New Energy, facing a liquidity crisis, moved toward bankruptcy liquidation.

Even companies backed by big names are not immune. In October 2025, China National Chemical Corporation (SH: 600500) announced that its controlling subsidiary, Ningxia China Chemical Lithium Battery, was continuously losing money due to external market factors, and had become insolvent and unable to pay due debts. The board agreed to apply for bankruptcy reorganization in court.

Ningxia China Chemical Lithium Battery, established in October 2018, reported revenue of 155 million yuan in 2024, with a net loss of 525 million yuan. By mid-2025, its total assets were 244 million yuan, but liabilities had surged to 288 million yuan.

For cross-industry entrants, the waters of energy storage are deeper than they imagined. Jiangsu Beiren (SH: 688218), an intelligent manufacturing company, after months of comprehensive assessment, boldly entered the industrial and commercial energy storage field in 2023. This meant it nearly bore the brunt of the most brutal price war.

As expected, in January 2026, due to three consecutive years of losses in its energy storage business, Jiangsu Beiren decided to strategically shut down the storage segment. It also became a failure case among many cross-industry energy storage companies.

A New Battlefield on the “Death Cemetery”

The charm of the business world lies in its unpredictability.

While countless small and medium-sized energy storage companies fell in bloodshed, and even leading enterprises struggled with cash flow issues and high debt, the gears of fate suddenly turned in the second half of 2025.

In June 2025, a “hard to find” phenomenon emerged in the energy storage industry: downstream manufacturers, unable to secure cells despite relationships and price hikes. The prices of upstream materials like lithium carbonate, lithium hexafluorophosphate, electrolytes, and lithium iron phosphate skyrocketed, sometimes tripling in a month. Factory utilization rates surged, and many top companies achieved full capacity.

To seize limited high-quality capacity, downstream clients began signing long-term and bulk orders intensively, sparking a rare “locking-in” trend. The supply-demand relationship shifted from oversupply to a tight balance, driving a collective industry rebound.

The industry bottomed out, prices rose again, but not all companies could benefit. For those that collapsed in the first half of 2025, it was already too late. They survived the brutal 2023, endured the freezing cold of 2024, but on the eve of the warm spring of 2025, they drained their last drop of blood.

Entering 2026, over 8,300 new players flooded in again, continuing the cycle. Will they enjoy the benefits of the new industry cycle, or become yet another wave of casualties under market fluctuations?

The current energy storage industry is no longer the era of rough heroes four years ago; it is shifting from scale to high-quality development, and barriers are quietly rising. Today’s competition is no longer just about who is cheaper; customers are calculating detailed lifecycle electricity costs (LCOE), examining the real cycle life of batteries… The industry is changing, customers are changing, and all companies must adapt.

The energy storage industry is no longer a place where you can blindly rush in and eat meat. Whether these new entrants can survive depends on one key factor: can you truly create value for customers? That is the fundamental business essence of the energy storage industry and all market-driven competitive industries.

Author’s note: Personal opinions only, for reference.