Key observations from CIBF 2025:

Competition is intensifying in the ESS cell market

The energy storage system (ESS) industry faces two competing challenges. On the one hand, producing energy storage cells is technically less demanding than manufacturing power batteries. On the other hand, the barriers to entry into the energy storage sector are relatively low for battery manufacturers. As a result:

Second- and third-tier battery manufacturers are rolling out their own ESS products.
Leading energy storage companies are developing proprietary cells.
Materials suppliers (e.g. DFD) are attempting to enter the market.

This has driven the competitive landscape of the ESS battery market to become unprecedentedly fierce, which presents a challenge for CATL. As a pure-play supplier, CATL's ability to maintain its market position in the medium-to-long term may become increasingly challenging. On the one hand, competitors are building vertically integrated self-sustaining ecosystems; on the other hand, new entrants are aggressively pursuing a volume-for-price strategy. If the energy storage sector descends into a price war mirroring the automotive industry, CATL’s quality edge will inevitably yield to cost competitiveness.

Dry process technology can significantly reduce costs, but it has certain limitations

The real-world industrial application of dry electrode processes diverges significantly from theoretical models and public reports. While dry processes theoretically enable the extrusion of thick electrodes (unachievable with wet processes) and promise higher energy density, practical challenges arise:

Poor uniformity and density variations in dry-processed cathodes.
Wet processes resolve thickness inconsistencies through multiple coating passes—a process flexibility absent in dry methods

Consequently, dry processes are not yet universally adopted across all battery formats. However, these technical hurdles are solvable. The core barrier to replacing wet processes lies in balancing supplier ecosystems. OEMs and suppliers are often deeply intertwined in their interests, making drastic supplier transitions politically and economically fraught.

Thus, for the foreseeable future, battery manufacturers will likely maintain a dual-track strategy, leveraging both dry and wet processes in parallel.

The cost reduction of sodium-ion batteries has made significant progress compared to last year

Assuming the cost of LFP batteries is 100%, the general cost of sodium-ion batteries in the industry is currently 130-150%. Some manufacturers claim to have achieved cost parity with or even lower than LFP, but scepticism remains on the validity of the claims. From the perspective of energy storage, the path to cost reduction for sodium-ion batteries remains long, with significant progress required for the technology to be competitive within the space. The current levelised cost of energy (LCOE) for energy storage facilities based on sodium-ion batteries is approximately RMB0.8/kWh (US$0.1/kWh), while LFP can reach a minimum of RMB0.46-0.6/kWh (US$0.06-0.08/kWh).

Sodium-ion batteries have made significant advancements in intrinsic safety compared to lithium batteries

Assuming the battery management system (BMS) fails, over-discharging sodium-ion batteries does not pose any risk of thermal runaway. After continuous overcharging and the triggering of the pressure relief valve, the thermal runaway reaction of the entire cell quickly ends, without producing open flames or large amounts of smoke, and the temperature rise of the cell is not severe. Therefore, in theory, energy storage facilities based on sodium-ion cells may require less sophisticated fire protection systems. However, this does not currently comply with national standards, which require advanced protection systems.

Smart cells may become an important technological route for battery development

At the CIBF exhibition, some manufacturers have already launched their smart cell solutions. Although they have not yet entered formal commercial applications, such systems are a promising future development direction for cells. Their working principle is very simple: adding a communication module based on the 2.4G Wi-Fi protocol to ordinary cells, integrating more sensors to detect cell status and using them with wireless BMS hardware. This not only improves the detection capabilities for parameters such as internal cell pressure, shell deformation, and electrochemical impedance, but also further optimises battery performance and safety through mechanistic and algorithmic innovations in real time.

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