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Sungrow has lost its crown as the “leading player” in the battery energy storage system integrator (BESS) market to Tesla, according to Wood Mackenzie’s Global Battery Energy Storage System Integrator Ranking 2024 report. Tesla has claimed a 15% global market share by 2023. In North America, the top three suppliers – Tesla, Sungrow and Fluence – accounted for 72% of the region’s market share in BESS shipments in 2023, up 20% year-over-year for these companies. At the same time, Wood Mackenzie also reports that microgrid construction in the US has nearly doubled for commercial and industrial users by 2023, exceeding 900 MW. According to the Financial Times, business owners are willing to pay high upfront costs to own private grids in order to avoid operational losses caused by power outages. The market concentration of BESS integrators in North America has increased significantly, driven primarily by Tesla, with a 60% year-on-year market share increase. Although North American and European data show Tesla as the largest and second largest BESS supplier, respectively, the global shift is coming from China, as multiple Chinese-based companies have entered the global market. Six of the “top 10 global suppliers” are based in China. Wood Mackenzie’s report attributes this in part to the fact that the Chinese BESS market is being supplied exclusively by domestic companies. China will also be the largest BESS supplier worldwide by 2023. Wood Mackenzie’s “Global battery energy storage system integrator ranking 2024” report states that the market share of the “top five” global BESS integrators fell to 47%, down from 62% in 2022. A battery energy storage system integrator is a company specializing in the procurement (and/or manufacturing) of subsystem components, the integration of hardware and software, and the supply of complete battery energy storage systems. The responsibilities of battery energy storage system integrators vary in practice, depending on the details of the contract, specific customer requirements, and the resources available in the market. Kevin Shang, Wood Mackenzie’s principal research analyst for energy storage and supply chain technology, explained: “The global BESS integrator market is becoming increasingly competitive, especially in China, resulting in lower market concentration. As a sector with a relatively low barrier to entry, the BESS integrator industry has attracted a significant number of new entrants.” This dynamic translated into increased dominance of Chinese companies in the Asia-Pacific region in 2023. CRRC jumped to the top among BESS integrators in APAC, which Wood Mackenzie attributed to cost competitiveness, followed by Hyperstrong. XYZ Storage and Envision tied for third place. Shang noted: “Importantly, established companies have also strengthened their competitiveness in terms of price, product performance and solutions across all regions.” Europe saw increased concentration in the energy storage system integrator market in 2023 from a more fragmented market in 2022. The top three players in Europe were Japanese electronics, automotive and battery giant Nidec, Tesla and Chinese automotive and battery giant BYD, which together accounted for 68% of the European market share in 2023. This represents an increase in market share for these players of 26% year-on-year. With the rapid evolution of the energy storage industry, battery energy storage system integrators have been trying to improve their vertical integration along the energy storage value chain. In this regard, Shang noted that “Tesla has the most vertically integrated supply chain in the energy storage industry, from hardware manufacturing to the provision of energy storage solutions. This enables Tesla to deliver continuous improvements and new features to customers quickly and helps customers maintain storage assets throughout their lifetime.” Tesla has been ramping up production at its 40 GWh Megapack factory in Lathrop, California. |
