Storage

Sungrow supplanted as top global battery producer, Tesla takes the gold

Sungrow supplanted as top global battery producer, Tesla takes the gold
A drone image provided by Pacific Gas and Electric Company (PG&E) shows a Tesla Megapack system in Moss Landing, CA (courtesy: PG&E via AP)

Move over Sungrow, there’s a new sheriff in town, and he’s friendly with Elon Musk.

Tesla has overtaken Sungrow as the largest global producer in the battery energy storage system (BESS) integrator market, earning 15% market share in 2023, according to Wood Mackenzie’s latest Global battery energy storage system integrator rankings 2024 report.

In last year’s Wood Mackenzie report on BESS integrators, Sungrow owned 16% of the global market, compared to 14% each by Tesla and Fluence. Since then, the market share of the five biggest players has diluted significantly, shrinking to 47% in 2023 from 62% in 2022, with a 24% Year-on-Year (YoY) decline, per the report.

This is due to the global BESS integrator market becoming less concentrated, as more China-based companies enter the fray. China installed the most BESS globally last year, and the report notes six of the global top-10 vendors are Chinese. The country’s BESS market is exclusively supplied by domestic companies.

As the Summer Olympics in Paris wind down, we’ve all got a little bit of a medal-stand mindset- including the folks at Wood Mackenzie, who put together this lovely little infographic demonstrating their findings:

Battery energy storage system rankings in 2023, courtesy Wood Mackenzie

Source: Wood Mackenzie. Note: The market share calculation is based on integrators’ battery energy storage system shipment numbers in 2023; the number includes both grid-scale and community, commercial & industrial sectors.

“The global BESS integrator market is becoming increasingly competitive, especially in China, resulting in declining market concentration,” observed Wood Mackenzie’s Kevin Shang, principal research analyst, energy storage technology and supply chain. “As a sector with a relatively low entry barrier, the BESS integrator industry has attracted a significant number of new players.”

In North America, Tesla, Sungrow, and Fluence remained the top dogs in 2023, even as their percentage share of the global market shifted slightly. Those three vendors alone captured 72% of the region’s market share for BESS shipments in 2023, growing 20% YoY. According to the report, market concentration has increased significantly in the North American BESS integrator market in the past year, mainly driven by Tesla, whose market share surged by 60% YoY.

“Tesla has the energy storage industry’s most vertically integrated supply chain, from manufacturing hardware to providing energy storage solutions,” said Shang. “This enables Tesla to deliver continued improvements and new features to clients quickly and helps customers maintain storage assets for their entire lifespan.”

“Importantly, established companies have also been bolstering their competitiveness in terms of price, performance of products and solutions across all regions,” Shang concluded.

Tesla has been ramping up production at a 40-GWh Megapack factory in Lathrop, California. Although the company’s second-quarter net income fell 45% compared to a year ago, Tesla’s battery division is keeping the lights on (literally and figuratively). A few weeks ago, Tesla announced the company’s energy-storage business took in just over $3 billion in revenue, double the amount in the same period last year. Tesla also said it set a new battery deployment record in Q2, with 9.4 GWh deployed. In Q1 2024, Tesla deployed 4.1 GWh of storage.

“Deployments will fluctuate from period to period with some quarters seeing large increases and others seeing a decline,” said Tesla’s Chief Financial Officer Vaibhav Taneja on the earnings call. “Recognition of storage gigawatt hours is dependent on a variety of factors, including logistics timing, as we send units from a single factory to markets across the world, customer readiness, and in case of EPC projects on construction activities.” Moving on to the other parts of the business, service and other gross profits also improved sequentially from the improvement in service utilization and growth in our collision repair business.”

In the other regions analyzed by Wood Mackenzie: Europe saw its energy storage system integrator market concentration increase in 2023, compared to 2022. The top three players, Nidec, Tesla, and BYD, accounted for 68% of the European market share in 2023, increasing by 26% YoY.

In the Asia Pacific region, Chinese companies’ dominance in the regional BESS integrator market strengthened in 2023, with CRRC jumping to the top among BESS integrators in APAC largely due to cost competitiveness, followed by Hyperstrong. XYZ Storage and Envision tied for third place (the bronze, if you’re sticking with the Olympic theme) stated the report.