The global energy storage sector is grappling with an unprecedented cell shortage, driven by explosive demand and supply chain constraints. Industry reports confirm that major cell manufacturers are fully booked until 2026, with some clients even offering premium prices to jump the queue—often without success.
“We’ve never seen such a tight market. Cells are the new gold," said a procurement executive at a European energy storage integrator. Leading cell producers including CATL, EVE Energy, and BYD are operating at near‑maximum capacity, yet still cannot keep pace with orders.
What’s Driving the Demand?
A significant catalyst is China’s new energy policy, which requires renewable energy projects to be grid-connected by mid-2025 to enjoy favorable tariffs. This has triggered a rush in solar and wind installations, each requiring energy storage systems.
Internationally, markets in the Middle East, Australia, and Europe are accelerating their energy transitions. Saudi Arabia, for instance, has increased its 2030 energy storage target by 150%, while Germany and the UK have introduced new subsidies for home battery systems.
Technology Shift Intensifies Supply Crunch
The industry is in the midst of a technology transition from 280Ah to 314Ah cells, which offer better energy density and cost efficiency. However, production lines are still adapting, creating a temporary bottleneck. Meanwhile, top-tier players are already moving toward 500Ah+ products, leaving smaller players struggling to catch up.
“The technology leapfrogging is happening faster than many can handle," said an analyst from Wood Mackenzie. “Second-tier suppliers who cannot scale or innovate quickly are being left out of the chain."
Price Impacts and Industry Response
Cell prices have risen by 10-20% since Q2 2025. In response, companies are racing to expand production. EVE Energy recently broke ground on a new 60GWh facility in Hubei, and CATL is accelerating construction of its 235GWh pipeline.
Some manufacturers are also adopting innovative partnership models, such as technology licensing and joint capacity building, to increase output and lock in customers.
Looking Ahead
Although new capacity is expected to come online in late 2026, analysts caution that the market could see another oversupply cycle shortly after, followed by renewed consolidation. For now, the cell shortage is reminding the industry that supply chain resilience is as critical as technological innovation.