Background
Portable energy storage products have gained popularity in recent years, driven by both supply and demand factors.
- Supply Side
Portable energy storage products are safe, convenient, clean, and low-carbon, effectively addressing consumer needs in the electricity demand market. They are compatible with most commonly used electronic devices. The industry began growing in 2018 and has since seen explosive growth, doubling year over year.
- Demand Side
The rapid development of photovoltaic and wind power industries has significantly increased the demand for energy storage on the power supply side, power grid measurement, and user side. This has led to a surge in the energy storage industry's popularity.
Portable energy storage represents a micro-energy storage segment within the energy storage field and was the first to experience rapid growth. The reasons for this early explosion in the micro storage segment include:
Changes in the tourism and leisure market, with a decline in long-distance and long-term collective tourism and a significant increase in suburban leisure and family gatherings, particularly in developed markets like Europe and the United States, leading to a growing demand for outdoor electricity.
The sharp rise in oil and gas prices due to radical energy transformation policies in developed countries such as the United States, Europe, Japan, and Australia, resulting in increased electricity prices and a significant potential for cost reduction, which has triggered the growth of micro and small storage.
The impact of a large proportion of wind and solar power generation on grid stability, making emergency backup power an essential product in households in countries like the United States, Japan, and South Korea.
Market Analysis Overview
Profits from portable energy storage are on the rise. It is estimated that by 2025, the portable energy storage market will see an additional 24.7 million units shipped, with an average annual compound growth rate of 50% from 2021 to 2025; the market size is expected to reach 56.3 billion yuan, also growing at an average annual compound rate of about 50%.
According to the China Chemical and Physical Power Industry Association, the current market is dominated by products with a capacity of 100-500Wh, which account for about 50% of the market, but this share is decreasing. Conversely, the share of products with a capacity of 500-1000Wh is on the rise and is expected to reach 40% by 2021. Products with a capacity exceeding 1000Wh hold only a 10% market share, but this is also increasing. As the cost of battery cells decreases, large-capacity portable energy storage products are expected to become mainstream.
Main Customer Types
Portable energy storage devices, often referred to as large power banks, are widely used in outdoor travel and emergency preparedness scenarios. They typically have a capacity of 0.2-2kWh and an output power of 100-2200W. These devices feature multiple data interfaces and support charging for mobile phones, laptops, drones, refrigerators, and other products in mobile power scenarios. They can also be used with photovoltaic panels to charge energy storage devices.
Main Technology of Portable Energy Storage
Portable energy storage devices feature a power system with built-in lithium-ion cells of high energy density, providing stable AC and DC output. They are considered "large outdoor charging treasures," with capacities usually ranging from 0.2 to 2kWh and a larger output power of 100-2200W. These devices come equipped with AC, DC, Type-C, USB, PD, and other connectors, making them compatible with most mainstream electronic devices on the market.
The technical barriers in portable energy storage are evident in:
Product Development: The development of portable energy storage products requires a comprehensive approach to industrial design, thermal management, power management, and lithium battery modules. It necessitates deep integration with application scenarios to achieve various charging and output methods, effectively improving charging and discharging efficiency. These products must also provide multiple protections against overcharge, over-discharge, overload, short circuit, and other potential issues, presenting certain technical challenges.
Product Iteration: As intelligent terminals continue to evolve and outdoor power consumption scenarios diversify, consumer demands for portable energy storage products will increase. This includes a growing need for high-power, lightweight, multi-functional, and intelligent devices. The advancing industry technology has raised the entry barrier for the portable energy storage industry.
Fine Quality Control: Due to the wide range of appliances that portable energy storage products need to adapt to, the numerous integrated parts, and higher safety requirements, meticulous quality control throughout the entire production process is essential. For example, portable energy storage products from Huabao New Energy must meet six safety protection standards and undergo nine quality inspection procedures. The refined quality control system in the production process of portable energy storage products has also created a barrier for new market entrants.
Portable energy storage is primarily composed of batteries, energy storage converters, circuit boards, electronic components, and casings. China boasts a developed consumer electronics manufacturing industry with a complete industry chain, excellent infrastructure, and labor cost advantages, making it a major global source for portable energy storage.
Main Market Threats for Portable Storage Stations
Technology Aspects: The surge in orders may deplete potential market growth. Before significant product iterations occur, existing users may lack the incentive to repurchase. Parameter competition can lead to price wars as manufacturers vie for market share. This competition can diminish brand loyalty among consumers, especially when ordinary portable energy storage is considerably more expensive.
- Convergence and Homogenization
Both products heavily rely on e-commerce platforms for distribution and employ similar marketing methods. The most serious issue is the similarity in the products themselves, with only minor changes in color and material, indicating a high degree of overlap in the list of upstream component suppliers. This can lead to a price war due to the lack of differentiation.
- Economic Aspects
Portable energy storage devices are not fast-moving consumer goods (FMCGs). They have high unit prices and long decision-making cycles. Additionally, the weight of these devices can be substantial, with 1 kWh devices generally weighing over 10 kg and 2 kWh devices reaching 20-30 kg. Even with advancements in solid-state batteries, the weight of a 2 kWh energy storage device is around 15 kg.
- Social Aspects
There is an influx of supply from various low-cost enterprises, which can fragment the market. Many companies have invested significant sunk costs in the early stages of their projects, making it difficult for them to recover and adapt to market changes. The market also exhibits high concentration, with the top five brands accounting for nearly 60% of the global market share.
- Other Aspects
The Russia-Ukraine conflict has impacted energy prices. The EU has taken measures to restore energy prices to pre-conflict levels by the end of 2022. Companies must not mistake the abnormal market conditions caused by the conflict for the industry norm and should avoid overexpansion based on these temporary conditions. The normalization of electricity prices may lead to inventory backlogs as products manufactured during the conflict period may not meet current market demands.
Future Development Strategy
Establish Independent Brands: By establishing independent brands, companies can shape a unique image in the new energy storage equipment field, build popularity, and lay a solid foundation for global market expansion.
Build a Stable Global Distribution Network: Companies like Source Power have built a stable sales network worldwide, covering North America, South America, Europe, the Middle East, Central Asia, Southeast Asia, and other regions. This extensive distribution network ensures rapid market entry and adaptability to various market needs.
Strengthen Environmental and Sustainable Development Concepts: In the "dual carbon" era, companies must focus on the environmental performance and life cycle impact of their products. Through product design and production process optimization, companies like Source Power are committed to promoting clean energy use and fulfilling their environmental responsibilities.
In the global "dual carbon" era, companies with unique strategic layouts and deep market insights can integrate the development of energy storage equipment with environmental protection concepts, opening up broader prospects for sustainable enterprise development in the international market.
