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Tesla's announcement of building a new megapack battery factory in Shanghai has once again caused a stir in the Chinese energy storage industry. It is reported that this will be Tesla's first energy storage super factory outside of the United States.

On April 7, at the China Refrigeration Expo, companies such as Midea Group, Haier Smart Home, and Gree Electric Appliances, Inc. of Zhuhai announced their entry into the energy storage and thermal management industries.

According to incomplete statistics, since 2022, more than 30 companies, including wind power equipment giant Mingyang Smart Energy, environmental protection giant Longjing Environmental Protection, salt-making company Snowsky Salt Industry Group, textile giant Shenghong Holding Group, and food giant Nanfang Black Sesame Group, have entered the energy storage market through the acquisition of energy storage companies or the establishment of new companies. 

The recently released "White Paper on Energy Storage Industry Research 2023" shows that the global energy storage market continues to grow rapidly in 2022, with a newly added installed capacity of 30.7GW for power energy storage projects, showing a year-on-year increase of 98%. 

Although it is a promising field, ensuring energy storage safety, establishing a profitable mechanism, and maintaining competitiveness are the challenges facing many cross-industry energy storage companies.

According to the annual report for 2022 of CATL, the company's energy storage battery system generated revenue of 44.98 billion yuan in 2022, representing a year-on-year increase of 230.16%, but the gross profit margin decreased by 11.51% year on year to 17.01%.

In fact, most cross-industry energy storage companies are still in the early stages of investment, and there is still uncertainty as to whether energy storage business can bring in revenue and profits. 

Taking Nanfang Black Sesame Group as an example, the company mentioned in its announcement that due to various factors such as macroeconomics, industry cycles, and company management, energy storage projects under construction may have risks of not achieving expected benefits. In addition, entering the new industry poses new challenges to the company's operational capabilities and control in the new industry.

When it comes to the primary market, energy storage is also being sought after, especially last year, and even a leading game company announced the plan to venture into the energy storage sector.

According to CVSource data, the total amount of investment and financing in the domestic energy storage field exceeded 230.6 billion yuan in 2021, showing a year-on-year increase of 98.5%. In 2022, the figure exceeded 421.9 billion yuan, representing a year-on-year increase of 82.9%. The number of energy storage-related investment and financing deals in 2020, 2021, and 2022 was about 285, 420, and 526, respectively, maintaining a growth rate of 30%-40%. In addition, data shows that there were 14 financing cases in the first quarter of 2023 alone.

Although it is a trillion-yuan field, there are not many opportunities for primary market investors. According to analysis by primary market investors, on the one hand, the current project valuations are too high to sell; on the other hand, the primary market can only invest in limited parts of the industrial chain. In addition, high-quality projects in the field tend to receive funding and resource support from industrial capital, and many financial VCs are excluded.

However, in terms of financial returns, energy storage is still in the early stages of commercialization and can't bring considerable excess profits. Some investors revealed that even if they invest in the angel stage, the return on investment is difficult to exceed 20 times.