The energy storage industry is booming, but integrators are facing a life-and-death test!

Recently, the energy storage industry is "booming."

However, behind the boom in the energy storage industry, system integrators are facing significant challenges, accelerating differentiation, and even elimination.

Some are happy, while others are worried.

The fundamental reason is that with the evolution of the energy storage industry, the rules of the game and key success factors are constantly evolving; if you don't advance, you will perish.

01 Differentiation One: Downstream Project Development Capability

There was once a misconception in the energy storage industry.

It was widely believed that technology is very important. However, those who understand know that in energy storage system integration, while technology is important, it can only rank second; project development capability always ranks first. Relying solely on technology makes it difficult to gain key competitive advantages.

In this regard, this public account analyzed in January this year, "Energy Storage System Integration: Not a Hero Based on Technology."

With the booming energy storage industry, system integrators must personally enter the field to compete for the most scarce project resources, thereby driving their own equipment sales.

This model is almost the same from domestic industrial and commercial energy storage to independent energy storage both domestically and abroad, and even overseas household energy storage, with only slight differences in methods.

Simply competing on system integration technology or manufacturing makes it too difficult to achieve differentiation, and there is serious homogenization and overcapacity, which are not scarce resources.

Relatively speaking, the most scarce resources in the energy storage industry chain are project or scenario resources. The value of scenario resources is reflected in various project intermediary fees, route fees, or channel fees, which is the market-based "clear pricing" of project resources.

For system integrators, it is difficult for the equipment side to "show off," so they can only move downstream to reflect differentiation through scarce project resources, achieve competitiveness, and improve gross margins and profitability.

In other words, integrators without project development capabilities are almost unlikely to achieve excess returns, which will be directly reflected in their profitability.

Based on this logic, the competitive focus of system integrators is not on the technology side but on the project side. Of course, this does not mean that the technology side is unimportant; it is just that the project development side is more important.

Of course, how to enhance the project development capabilities of system integrators is another topic, which we will analyze in other articles.

As a result, we see that some system integrators, which were once highlighted by technology and highly sought after by the capital market, have rapidly declined.

Welcome to identify with this.

02 Differentiation Two: Upstream Supply Chain Assurance Capability

System integrators are more like intermediaries.

In addition to downstream project development resources, they also need to connect with upstream resources such as battery cells and other main material resources, especially battery cells as core components, which may even become elements of differentiated competition, such as CATL Inside.

This year, under the circumstances of "one cell is hard to find" in the upstream battery cell market, supply chain assurance capability has become even more important: first, to ensure timely project delivery, and second, to minimize procurement costs.

Recently, many system integrators have faced situations where upstream battery cell suppliers "raise prices at will," significantly affecting their profitability.

As a result, we see that many integrators have begun to "lock orders" with upstream battery manufacturers. For example, Haibosi Technology locked in a three-year order of 200GWh with CATL, which is a true reflection However, not all system integrators have the ability to lock in orders. On one hand, there needs to be a large-scale business demand, and on the other hand, a certain level of prepayment capability is required, which imposes high demands on both business and capital.

This difference in capability will naturally widen the gap.

03 Differentiation is Inevitable

The gap in capabilities will inevitably lead to differentiation in competition.

On one hand, not all integrators have market-oriented development teams and capabilities, especially the ability to leverage capital to drive project development, which requires higher integration demands from the funding side.

On the other hand, not all integrators have the capability to integrate upstream supply chains. This depends on their own business reserves as well as their brand, creditworthiness, and financial strength.

These two aspects will significantly widen the capability gap among integrators, further accelerating their differentiation.

In a phase of rapid industry development, those who do not advance will retreat; excellent companies will run faster and faster, while mediocre companies will be eliminated more quickly.

Energy storage system integration is also expected to shift from a previously highly fragmented state to a more concentrated one.

This feels more like a life-and-death battle.

It's quite brutal.

Risk Warning and Disclaimer

The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial conditions, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Investing based on this is at one's own risk