Top five global energy storage system integrators to account for up to 62% of the market by 2022
The battery energy storage system (BESS) integrator market is becoming increasingly competitive in 2022, according to a new Wood Mackenzie research report. The top five global energy storage system integrators accounted for 62% of total battery energy storage system shipments (by MWh).
Sunny Power ranked first in the world with a 16% share of global market shipments (by MWh), Fluence (14%) and Tesla (14%) tied for second, and Huawei (9%) and BYD (9%) ranked fourth and fifth, respectively.
New policies are driving the battery energy storage market to boom, and market competition among battery energy storage system integrators is becoming increasingly fierce. Integrators that have already entered the market are actively seizing market share, and the hot market is also attracting more new companies to enter the market.
The top-ranked battery energy storage system integrators have many commonalities: global business layout, more customer resources, and higher revenue levels. In addition, many integrators have been strengthening their supply chain vertical integration.
While the global energy storage battery supply crunch that emerged in 2022 has eased this year, the supply chain side of the energy storage system is facing a new challenge - a shortage of transformer supply and soaring prices. Transformers of all sizes are taking at least a year to be delivered, which has a direct impact on energy storage system integrators.
North American integrators market is highly concentrated
The North American battery energy storage system integrator market is highly concentrated, with the top five companies accounting for 81% of the market share in North America in 2022. Tesla led the North American region with 25% market share by shipments, with its vertically integrated business management playing a key advantage. In addition, by integrating hardware, software, and add-on services, Tesla can quickly deliver continuously upgraded products and pioneer new services to customers.
Second in market share in North America is Fluence (22%). Sunny Power has a 13 per cent market share, thanks to its cost competitiveness and advanced liquid-cooled battery products.
The Inflation Reduction Act (IRA) and state-led clean energy policies will drive growth in the energy storage market. We expect the U.S. battery energy storage system integrator market to become increasingly competitive in the coming years. Companies need to execute sound business strategies to win the market competition.
Chinese companies lead the Asia-Pacific market, but face a severe squeeze from upstream and downstream supply chain players
China leads the Asia-Pacific battery energy storage system integrators market, with a market share of 86% in the Asia-Pacific region by 2022.
China's battery energy storage system integrators market is becoming increasingly competitive and is being severely squeezed by upstream and downstream supply chain players. As bidding requirements for energy storage projects become more and more detailed and stringent, the processing and manufacturing capacity of key equipment such as batteries, energy storage converters, battery management systems and energy management systems is often a basic requirement rather than a plus advantage.
In the face of the trend towards homogenisation of energy storage products, price has become a key factor for companies in the Asia-Pacific region to stand out and win bids. China's domestic battery energy storage system integrators have begun to fight a price war among themselves. We observe that more and more companies are willing to trade profits for market share, resulting in the profitability of the entire industry being pulled down. However, we do not expect aggressive bidding strategies with essentially no profits to be sustainable. Increased market competition will make it difficult for companies with low profitability and a clear lack of competitiveness to survive in the coming years.
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