The latest research from market intelligence firm Rho Motion shows that the market share of vertically integrated battery cell and battery energy storage system (BESS) companies has been declining since 2023.

The company's research shows that the share of lithium-ion battery original equipment manufacturers (OEMs) such as Contemporary Amperex Technology Co., Ltd. (CATL) and BYD in the battery energy storage system market peaked at over 40% in 2023, but fell below 30% by the first half of 2025.

Rho Motion said: "This is mainly due to the sharp increase in lithium iron phosphate (LFP) battery cell prices in 2022, which gives battery cell manufacturers a cost advantage in producing systems, as battery cells account for the highest cost share in energy storage systems (ESS)."

Rho Motion pointed out that the sharp rise in lithium iron phosphate (LFP) battery cell prices in 2022 was the key reason why vertically integrated companies had previously held an advantage - battery cells are the component with the highest cost share in energy storage systems (ESS) (accounting for more than 60%), and their price increases have given battery cell manufacturers a significant cost advantage when producing systems.

However, as battery cell prices have gradually fallen since 2023 , coupled with the expansion of battery industry production capacity, more and more companies focusing on BESS production have entered the market, breaking the monopoly of vertically integrated companies and intensifying market competition.

Looking at the performance of specific companies, the market share of leading vertically integrated enterprises has shrunk significantly . The infographic above shows the market share of each company in 2023, 2024, and the first half of 2025. CATL's market share has dropped from 20% in 2023 to 14% in the first half of 2025, while BYD's has dropped from 17% to 9%.

Non-cell-producing BESS manufacturers have become the main beneficiaries of the market share growth. Among them, the combined share of Sungrow Power Supply, CRRC and Hyperstrong has increased significantly from 20% in 2023 to 30% in the first half of 2025.

Among them, Sungrow has grown into the largest company in the battery energy storage system market, with a share of 14% in the first half of 2025; Tesla's market share remained relatively stable, at 11%, 14% and 12% in the three periods respectively .

Changes in the UK market are a typical example of this trend: from 2018 to 2022, most of the local early energy storage projects were supplied by BYD and CATL; but in the past two years, the participation of companies such as Sungrow Power Supply, Haichen Energy Storage, Envision Energy and Canadian Solar has increased significantly, and their share in new projects has begun to surpass the former two.

Furthermore, EVE, the "all-rounder" with businesses spanning consumer batteries, power batteries, and energy storage batteries, was not spared. It lost its previous market leadership , saw a significant decline in market share, and saw its share of overseas revenue continue to decline. In terms of energy storage battery shipments, it has been overtaken by Haichen Energy Storage. Companies such as China New Energy and Guoxuan High-tech have also seen an increase in their overall market share. This collective surge has intensified market competition.

It's important to note that Rho Motion's research focuses solely on battery energy storage system suppliers, regardless of whether there's a system integrator between the supplier and the buyer. Studies by other companies often categorize projects by system integrator or end seller, meaning CATL would be ranked lower or even not appear at all in their reports.

The Rho Motion report also noted that system integration capabilities are becoming increasingly important , echoing sentiments ESN Premium learned from an interview with system integrator Prevalon earlier this year.

A similar trend is emerging in the battery cell supply sector, with (relatively new) battery cell suppliers specializing in battery energy storage systems seizing market share from established OEMs. In the first half of 2025, Haichen Energy Storage and EVE Energy joined CATL in the top three, surpassing BYD.