CATL Launches Tianheng Energy Storage System

(AsianFin)—Chinese battery giant CATL has recently unveiled Tianheng, the world's first mass-producible energy storage system with zero degradation in five years, as entrepreneurs are worried about global energy shortages due to fast artificial intelligence (AI) development .

It marks another energy storage product after its release of a photovoltaic energy storage direct current coupling solution with zero auxiliary source composed of three major modules: photovoltaic components, energy storage cabinets, and photovoltaic energy storage inverters last May.

In a recent public address, Nvidia CEO Jensen Huang expressed his concerns over an impending energy crisis due to AI. "The end of AI is photovoltaics and energy storage! We can't just think about computing power, if we only consider computers, we would need to burn 14 Earths’ worth of energy,” he said.

His viewpoint was echoed by OpenAI CEO Sam Altman and Tesla CEO Elon Musk. Altman emphasized the crucial role of energy supply in AI's future while Musk predicted imminent electricity shortages within two years.

Zeng Yuqun, the Chairman of CATL, articulated the company's vision during the 2023 financial results conference, highlighting the imperative of advancing the new energy industry.

CATL's strategic focus on energy storage is shown in its financial results, with revenue from energy storage battery systems experiencing faster growth than power batteries. Revenues from energy storag batteries grew 33.2% year over year in 2023, compared with 20.6% for revenues from power batteries. Meanwhile, the gross margin of the storage battery segment was 23.8% in 2023, higher than the figure for the power battery segment.

However, the journey towards zero degradation technology is fraught with challenges, including high costs and low product yields. Moreover, ensuring safety in energy storage systems remains a paramount concern, with unplanned shutdowns due to critical equipment issues being a prevalent issue.

Despite the challenges, CATL remains steadfast in its pursuit of energy storage dominance. The company's early forays into the energy storage market, coupled with strategic partnerships and investments, underscore its commitment to this burgeoning sector. CATL's revenue from energy storage has surged in recent years, making it the company's second-largest revenue source.

According to statistics, by the end of 2023, CATL had invested in nearly 70 energy storage-related companies, with a total investment of over 46.5 billion yuan (US$ 6.43 billion), covering areas such as new energy, energy storage batteries, solar energy, energy storage equipment, battery packs/groups, BMS, PCS, EPC, energy storage technology services, new materials, and upstream materials of the energy storage industry chain, and so on.

BYD, another key player in the energy storage market, has also intensified its efforts, focusing on both domestic and international markets.

Both companies have set their sights on this huge market, and their chosen strategies involve not only upstream energy storage batteries but also downstream energy storage integration. The difference is that CATL's energy storage advantage lies more in battery cells, while BYD excels in an integrated market-oriented approach.

Going forward, CATL aims to highly integrate automobile battery capacity and energy storage battery capacity, emphasizing the elevation of BYD's position in the energy storage business, said BYD Chairman Wang Chuanfu at the BYD Annual Shareholders' Meeting in June 2023.

The HighTech Industry Research Institute previously pointed out that the global energy storage market has entered a reshuffling period after a rapid development phase, which is expected to continue for the next one to two years.