The expected drop in Chinese vanadium flow battery (VFB) installations in 2025 reflects a cooling of domestic enthusiasm for the technology and persistent profitability challenges.

In 2025, China is expected to have installed 2.4GWh of VFB capacity, representing a 7.8% y-o-y decline. These installations are projected to have consumed around 10.2kt V in 2025, with the largest VFB commissioned being the 200MW/1GWh system in Xinjiang province, supplied by Rongke Power at a unit cost of RMB1.929/Wh (US$0.27/Wh).

Between 2022 and 2025, China will have installed a cumulative 5.7GWh of VFB capacity, including 451MWh in 2022, 250MWh in 2023, 2.6GWh in 2024, and 2.4GWh in 2025. In contrast, during the same period, the rest of the world installed only 125MWh in total.

Despite China’s overwhelming lead in global installations, the outlook for the domestic VFB sector has turned uncertain, primarily due to its high installation cost relative to lithium-ion energy storage systems and the weak profitability of its producers.

In China, the installation cost of VFB systems ranges between RMB1.73/Wh and RMB3.17/Wh (US$0.24–0.44/Wh)—approximately two to four times higher than that of lithium-ion systems, which typically cost RMB0.398–0.805/Wh (US$0.056–0.113/Wh). The result of this significant cost gap is that it continues to limit large-scale adoption and financial viability.

Meanwhile, only three Chinese VFB manufacturers are currently operating profitably, including Rongke Power—the world’s largest producer—with 150,000m³ of annual electrolyte capacity already in operation and an additional 3.05GWh (equivalent to 183,000m³) of annual capacity expected to come online by the end of 2025.

This rapid capacity expansion is expected to accelerate market consolidation, further squeezing smaller competitors in 2026.

To cope with rising competition and low domestic margins, Chinese VFB producers are increasingly looking beyond the domestic market, aligning with the broader national trend of “Chuhai (出海)”—going “overseas.”

In November 2025, Maymuse Energy Storage signed a tripartite memorandum of understanding (MoU) with AVFlow Energy and Powra to promote commercial VFB deployment in Australia. During the same month, Enerflow Technology formed a strategic partnership with JENMI Investments to jointly develop the Australian VFB market, including a 350MW/1,200MWh project.

Notably, in 2025, China exported four VFB systems to Saudi Arabia, the USA, South Korea, and the European Union, totalling 13.8MWh, which accounted for 69% of all VFB installations outside China.

Overall, China’s VFB market has demonstrated clear signs of deceleration in 2025. Project Blue forecasts that China’s annual VFB installation capacity will grow at a CAGR of 4.1% from 2024 to 2035, reaching approximately 4GWh by 2032 and consuming around 16.8ktpy V.

To remain competitive, Chinese producers are pursuing two main strategies: cost reduction and overseas expansion. However, cost-cutting—particularly in vanadium electrolyte production—depends on technological innovation, making it a solution that cannot be obtained over the short term.

Simultaneously, rising global protectionism, complex permitting processes, slow financing cycles, and weak macroeconomic conditions outside of China are likely to constrain export opportunities, adding further uncertainty to the long-term trajectory of China’s VFB industry.