2026 Energy storage outlook: major trends defining the industry

The global energy storage market remains on an upward trajectory in 2026. During this expansion cycle, themes that continue to gain prominence include price realignment, capacity upgrades and technological iteration, and the rise of emerging markets. These are also becoming key variables shaping industry dynamics.

This article focuses on InfoLink’s assessment of critical trends and provides a systematic overview of the key developments across the energy storage value chain that warrant close attention in 2026.
 

Supply–demand trend: tight balance in H1, moderate easing in H2

In 2026, InfoLink projects global energy storage cell shipments to reach 801 GWh, while energy storage system (ESS) integration shipments are expected to total 600 GWh, with ESS installations estimated at 353 GWh. At present, the key focus of the supply chain remains concentrated on the cell segment.

Since 2H25, the market has experienced a persistent cell shortage, with demand outpacing supply. InfoLink preliminarily expects this tight supply–demand balance to continue into 2026. As most newly added capacity is scheduled to come online in 2H26, the supply–demand structure in 2026 is likely to exhibit a pattern of tight balance in H1 and moderate easing in H2.

It is also worth noting that, compared with the previous expansion cycle, manufacturers have adopted a more cautious approach to capacity expansion. On one hand, the lithium battery industry is highly capital-intensive, and the sharp reduction in subsidies has led companies to exercise greater prudence in capital expenditures. On the other hand, the industry is currently undergoing a transition from 314 Ah cells toward next-generation 500+ Ah formats. As a result, expansion of 314 Ah capacity has slowed, while 500+ Ah capacity expansion remains at an exploratory stage, further moderating the overall pace of capacity growth.
 

Technology roadmap: continued iteration toward larger-capacity cells

In 2026, both major application segments—utility-scale storage and residential storage—are expected to see ongoing upgrades toward larger-capacity cells.

In the utility-scale storage market, cell capacity is evolving from 314 Ah toward 587 Ah, 588 Ah, and even larger formats. Based on state-owned enterprise tenders in China in early 2026, multiple centralized procurement frameworks specify a minimum cell capacity requirement of ≥314 Ah, indicating that while 314 Ah cells remain widely used, the market is increasingly receptive to 500+ Ah cells. On the supply side, following the mass production of 587 Ah cells by leading manufacturers in 2H25, Tier-2 cell suppliers are expected to begin large-capacity cell production starting 2Q26. InfoLink therefore estimates that 500+ Ah cells will reach a penetration rate of nearly 15% in the utility-scale storage cell market in 2026.

In the residential storage market, the mainstream cell format is shifting from 100 Ah to 280 Ah and 314 Ah. Prior to 2025, the market was primarily dominated by 100 Ah cells, supplemented by 50 Ah and 72 Ah formats. However, as residential storage demand has expanded rapidly throughout 2025, cell supply has remained tight, pushing 100 Ah cell prices sharply higher. The price gap between 100 Ah and 280/314 Ah cells has widened to over RMB 0.5/Wh, fueling calls to shift toward 280/314 Ah cells. InfoLink estimates that these two cell formats will achieve a penetration rate of nearly 20% in the residential storage cell market in 2026.

Lithium carbonate prices: volatile throughout the year, with the midpoint likely at RMB 120,000–160,000/MT

Since 4Q25, lithium carbonate prices have continued to strengthen, supported by concentrated demand releases, temporary supply disruptions, and improved market sentiment. Entering 2026, spot prices once exceeded RMB 180,000/MT before shifting into a phase of high-level volatility.

Market sensitivity to supply–demand dynamics has increased notably, and the pricing mechanism has evolved from a model driven mainly by fundamentals to one jointly influenced by fundamentals, expectations, and market sentiment.

In 2026, the lithium salt industry remains in a capacity expansion phase, with newly added capacity expected to grow over 20% YoY, mainly concentrated in China and Africa, while the share of recycled lithium feedstock is also rising.

On the demand side, although new energy vehicle (NEV) growth may slow, overall power battery demand is expected to remain stable. Meanwhile, energy storage demand is projected to maintain strong growth, supported by favorable policies and expanding overseas markets. Restocking activities and order execution are expected to provide a stable price support.

Overall, both supply and demand for lithium carbonate are expected to increase in 2026, with the structural oversupply in 2025 likely to ease to some extent. As a result, the price midpoint is expected to move higher.

Lithium carbonate prices are expected to fluctuate widely within RMB 100,000–190,000/MT throughout the year, with the average level likely to remain around RMB 120,000–160,000/MT. The annual price low is most likely to occur from late Q2 through Q3, while prices may strengthen in Q4.

Cell and ESS prices: the cell segment is expected to remain firm, while the system integration segment faces greater pressure

Since 4Q25, demand for energy storage cells has surged, shifting the market from oversupply in mid-2025 to a tighter supply in 2026, with leading manufacturers facing capacity shortages. Rising raw material prices have significantly increased cell costs. According to InfoLink’s Global Energy Storage Supply Chain Price Report, cell costs in January 2026 rose by more than 23% compared with October 2025, while transaction prices for mainstream 314 Ah cells increased by over 16%.

Looking ahead for the rest of 2026, supported by strong demand growth and a higher baseline raw material price, mainstream cell prices are expected to remain above RMB 0.300/Wh, with the central price levels more than 15% higher than in 2025.


 

The ESS integration segment faces pressure from both rising cell prices and intensifying competition. Data show that since 4Q25, mainstream bid prices for system integration projects in China have increased by less than 10%. As large-capacity cells become more widely adopted and cost reductions from new integrated system products materialize, integration prices in China are expected to remain flat or decline slightly compared with 2025. In non-China markets, higher entry barriers, together with the anticipated removal of export rebates that has pulled forward demand and delivery schedules, are likely to support price increases in some regions relative to 2025.

Focus markets: Emerging markets are expected to be the most prominent sources of incremental growth

As global energy storage installations continue to rise, China, the U.S., and Europe remain the main contributors to incremental demand. Meanwhile, strong demand and policy support are driving emerging markets to account for a growing share of global installations, which is expected to approach 20% in 2026. Among these emerging markets, manufacturers should increase their focus on Australia, India, Brazil, and South Korea.

Steadily expanding market: Australia — Energy storage installations grow steadily amid coal-fired power retirements and policy support

 

According to InfoLink, Australia’s new energy storage installations reached 11.4 GWh in 2025, up 338% from 2024, making it the third-largest market for new installations globally after China and the U.S. New installations are projected to reach around 13 GWh in 2026.

The stable market expansion is primarily driven by three factors. First, policy support continues to strengthen projects awarded under the Capacity Investment Scheme (CIS) are expected to come online progressively from 2026, while the AUD 7.2 billion residential subsidy program further supports demand. Second, the accelerated retirement of coal-fired power plants is increasing the grid’s structural demand for energy storage. Third, more diversified revenue streams are improving project economics and supporting further deployment.
 

Key potential markets: India, Brazil, and South Korea

Currently, energy storage installations in India, Brazil, and South Korea remain low. However, policy support and utility-scale tenders have built robust project pipelines, indicating strong growth potential. The three markets are at different stages of development.

India: Supported by mandatory storage requirements and Viability Gap Funding (VGF) subsidies, along with multiple GWh-scale tenders launched by SECI (Solar Energy Corporation of India) and NTPC (National Thermal Power Corporation) during 2024–2025 that are set to enter the delivery phase this year, installations in 2026 are expected to increase significantly.

Brazil: In November 2025, legislation formally established energy storage as an independent activity and introduced tariff and tax incentives. The first battery energy storage capacity auction is scheduled for April 2026, laying the institutional foundation for market mechanism development.

South Korea: As a traditional lithium battery manufacturing country, the country announced the results of its second-round 3.24 GWh tender in February 2026. Combined with the first round held in 2025, total tendered capacity over the past two years has reached 6.5 GWh.

Although tenders announced or planned in Brazil and South Korea are constrained by construction timelines and are unlikely to translate into installation growth in 2026, their progress has laid the groundwork for future deployment, suggesting that utility-scale storage markets in both countries may begin to scale up from 2026 onward.

Overall, the reemergence of a tight supply–demand balance, rising prices, capacity upgrades, and the ramp-up of emerging markets are not short-term fluctuations but different facets of a broader supply chain repricing and redistribution cycle. In this process, manufacturers’ capabilities in managing capacity expansion, advancing product development, and expanding overseas will be key factors shaping the evolving competitive landscape.