The global Li-ion BESS market has continued to grow rapidly, with annual GWh deployments more than tripling in 2025 compared with 2023. Key players continue to capture significant market share, while the increasingly competitive utility-scale landscape is becoming harder for newer entrants to penetrate. While policy and financing are evolving to support BESS procurement and project investment, new challenges are also emerging across the value chain. This article highlights the key trends, drivers and challenges shaping the global Li-ion BESS market.
IDTechEx Forecasts the Global Li-ion BESS Market to Reach US$135B by 2037
Battery demand for stationary energy storage (ES) is set to grow as the penetration of renewable energy sources (RES) within electricity grids increases, alongside new demand created by data center build-out. Policy is also shifting from simply setting storage targets towards creating bankable revenue frameworks and increasingly sophisticated routes-to-market for battery energy storage system (BESS) deployment. As shown in IDTechEx's newly updated market report "Batteries for Stationary Energy Storage 2027-2037: Markets, Forecasts, Players, Technologies, Policy, and Projects", the global Li-ion BESS market will reach US$135B in value by 2037.
Li-ion Battery Demand Shifts Across Sectors
Li-ion batteries (LIBs) continue to dominate the stationary battery energy storage system (BESS) market, driven by their wide availability, low cost and improvements in performance. While total cross-sector LIB demand has continued to increase, the application mix has shifted. EV batteries still dominate global demand, but their share decreased from 84% in 2023 to 78% in 2025, while the share attributable to BESS applications increased from 10% to 19%. Policy-driven changes in the EV market have contributed to this shift, alongside much faster growth in BESS demand as electricity grids integrate greater volumes of renewable energy and require increasing levels of flexibility.
Li-ion Battery Demand by Sector (GWh) (left) and (%) (right) 2015 - 2025. Source: IDTechEx.
Li-ion BESS Demand by Country and Key Drivers
IDTechEx estimates that annual global Li-ion BESS deployments increased by more than 3x between 2023 and 2025 across grid-scale, commercial and industrial (C&I), and residential sectors. This is equivalent to 92 GWh deployed in 2023 and 318 GWh in 2025. China and the US represented 58% and 18% of deployments in 2025, respectively, highlighting China's continued lead in the global market. The US BESS market is increasingly being shaped by industrial policy and efforts to reduce dependence on Chinese cells and BESS technologies.
Critically, countries not previously prominent in the global BESS market have emerged within the top 10 by GWh deployed, including Saudi Arabia and Chile. IDTechEx would expect more countries to enter the market at significant scale. Key drivers facilitating BESS growth across both established and emerging markets include a growing number of procurement frameworks, routes-to-market and increasingly sophisticated financing structures that improve project bankability and help BESS projects secure investment. Examples include Australia's Capacity Investment Scheme (CIS), New South Wales' Long-Term Energy Service Agreements (LTESAs), Italy's MACSE, state-backed Middle Eastern tenders, and the UK LDES cap-and-floor framework. For more information on regional developments, projects, policies, supply chain localization, revenue models, procurement frameworks and routes-to-market, and how these are transforming the global BESS market, please refer to the IDTechEx report.
Future Challenges, Pricing, and Technology Trends
While many future projects are being facilitated by government-backed procurement and revenue-support frameworks, often administered by regulators, system operators or designated procurement bodies, grid connection queues are emerging as a key bottleneck. Project delays and attrition may therefore be expected, while an increasingly competitive BESS developer landscape is also making it more difficult for new entrants to penetrate the grid-scale market at scale. Developers with proven utility-scale experience, strong local execution capabilities and demonstrable bankability are increasingly winning significant projects.
Further upstream, raw-material prices and policy changes may also create uncertainty. China's reduction in and eventual elimination of its battery export VAT rebate could affect future cell and BESS pricing. This has encouraged some front-loading of battery production and exports and, alongside other factors, contributed to higher lithium carbonate prices in early 2026. If such prices are sustained, they could place upward pressure on cell and BESS prices, weaken project economics and increase margin pressure across the containerized Li-ion BESS supply chain.
At the technology level, many players are launching containerized grid-scale BESS technologies using increasingly high-capacity cells, contributing to a growing number of systems with capacities of 6.5 MWh or greater. Higher capacity cells can improve system-level energy density by reducing the number of cells, interconnections and casings required per MWh, allowing a greater proportion of the container to be occupied by active battery material. This can also bring project-level cost benefits, as fewer BESS units are required to achieve a given site capacity. However, these designs create additional thermal management requirements and can introduce transportation weight constraints, contributing to new system-level design trends.
IDTechEx's market report "Batteries for Stationary Energy Storage 2027-2037: Markets, Forecasts, Players, Technologies, Policy, and Projects" provides holistic coverage on key emerging challenges in the Li-ion BESS market at a country-level and regional basis, as well as key Li-ion BESS technology trends, covering costs, pricing, performance, and safety strategies, elicited by interviews between IDTechEx and key Li-ion BESS and cell developers and suppliers.
In "Batteries for Stationary Energy Storage 2027-2037: Markets, Forecasts, Players, Technologies, Policy, and Projects", IDTechEx brings the reader a holistic overview of this market, including the following information:
Market Forecasts and Analysis
- Granular 10-year Li-ion BESS market forecasts, by GWh deployed (by country/region - 18 covered: China, US, Australia, Germany, Italy, UK, Bulgaria, Spain, Poland, Saudi Arabia, United Arab Emirates, Chile, India, Japan, South Africa, Morocco, the Rest of Africa, and Rest of the World), by sector - grid-scale, C&I, residential), and by value (US$B, by sector) for the 2016 - 2037 period.
Regional Analysis and Li-ion BESS Markets
- Regional analysis on key countries in the global BESS market, ranging from market-leading countries to new and important entrants. This includes China, US, Australia, Germany, Italy, UK, Bulgaria, Spain, Poland, Saudi Arabia, United Arab Emirates, Chile, India, Japan, South Korea, South Africa, Morocco, and the Rest of Africa.
- Regional analysis provides comprehensive and thorough coverage of key BESS developments relevant to each country. These elements include historical deployments, market size, major projects, key developers and pipelines, market segmentation, policy, regulation and state/national targets, procurement and support frameworks (e.g., tenders, CfDs, capacity markets and cap-and-floor mechanisms), routes-to-market and project financing, system needs and electricity generation mixes, tariffs, manufacturing localization, new demand forces (e.g., data centers), and grid connection and project development barriers.
- E.g. in the US, key quantitative analysis and explanations on costs of LFP Li-ion cells in the US vs importing LFP Li-ion cells from China with implementation of The One Big Beautiful Bill Act (OBBA), 45X Manufacturing Tax Credits, FEOC / PFE restrictions, MACR thresholds, and tariffs on Chinese LFP cells. Also includes US LFP cell production for battery energy storage systems (BESS) and BESS manufacturing plants by player, annual GWh capacity, location, status, and key details.
- Granular analysis and discussion on the global residential battery storage market. Includes updates on key player activity, key market drivers, residential battery storage market forecasts for the 2016 - 2037 period by country. Granular data analysis on residential battery storage installed in 2024 and 2025 by region, player market share by revenues generated and GWh residential BESS deployed, and residential battery storage chemistry trends. Data analysis collated from dozens of players' technologies on residential battery prices (including and excluding installation cost), energy density and specific energy, cycle life, and warranties.
Player and Battery Storage Technology Analysis
- 30+ company profiles including Li-ion BESS manufacturers and developers, and Li-ion cell suppliers.
- Value chain analysis reflecting player changes in the market.
- Comprehensive and granular analysis on players deploying grid-scale (FTM) and C&I-scale Li-ion BESS, i.e., Li-ion BESS developers and manufacturers. Analysis includes key players' GWh BESS deployed, annual BESS-derived revenues, projects, technologies and grid-scale BESS technology benchmarking, pricing, manufacturing developments, supply agreements, and further commercial activity, featuring insights from primary IDTechEx interviews.
- Quantitative and qualitative analyses on GWh BESS deployed by BESS players (2021 - 2025), project capacities, average durations of storage project by region and by player, standalone vs renewable-paired BESS projects, BESS market size by sector, cell capacity analysis by player, developer pipelines by region and year, and grid-scale BESS technology benchmarking.
- Key analysis on Li-ion BESS cost component breakdown (cells, fire protection materials + thermal management systems, power conversion systems, BMS / EMS, other) and prices by key region, and analysis on the China export tax rebate.
- Battery storage technologies, trends and comparisons, including Li-ion batteries, sodium-ion (Na-ion), redox flow batteries (RFB), metal-air batteries, lead-acid batteries, thermal batteries. Advantages and disadvantages of technologies provided. Further analysis and discussion on Li-ion chemistry trends for BESS (LFP, NMC), and long duration energy storage (LDES).
- Key discussion and analysis on 'zero-degradation' BESS, e.g., CATL TENER 6.25 MWh BESS.
BESS Business Models, Routes-to-Market, and Financing
- Comprehensive coverage of BESS business models, project financing, procurement mechanisms and revenue streams across the value chain, from manufacturing and project development through to battery operation. Analysis includes price arbitrage, ancillary services and capacity market revenues, alongside mechanisms used to support project bankability and deployment, such as CfDs, cap-and-floor schemes, government tenders, PPAs, flexibility optimization PPAs, tolling agreements, revenue stacking and virtual power plants (VPPs).
- Explanations and discussion on BESS used in front-of-the-meter and behind-the-meter applications, and commentary on arbitrage volatility and negative electricity prices.
BESS Safety and Thermal Management
- Overview of BESS safety regulations, and analyses and discussion on BESS failure root causes and thermal runaway, impact of chemistry and form factor on BESS safety, Na-ion safety, systems and materials to improve battery safety (e.g. by mitigating fires and explosions and implementing thermal management materials), air-cooled, liquid-cooled, and immersion-cooled BESS, and systems and components implemented by key BESS developers in the market.
For more information on this report, including downloadable sample pages, please visit www.IDTechEx.com/SES, or for the full portfolio of energy storage-related research available from IDTechEx, see www.IDTechEx.com/Research/ES.
