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Global battery energy storage system (BESS) demand is rising more sharply than expected, largely due to significantly lower US onshore battery cell costs driven by next-generation designs. These lower costs translate into more affordable storage systems, improved project returns, and higher deployment volumes worldwide. As a result, are we underestimating the speed and scale of BESS adoption?

In the US, battery cell costs are structurally below current forecasts, resulting in about a 30% drop in overall system costs and supporting double-digit project returns. US policies, including substantial subsidies and restrictions on certain imported battery components, are accelerating domestic demand and shifting market share to local and regional producers. These policies are expected to drive US BESS demand to triple by 2030, with onshore production capacity ramping up significantly.

In China, the domestic BESS market is growing rapidly and remains a key profit center for local industry leaders. China continues to hold a cost and scale advantage, with the market expected to grow around 40% annually from 2025 to 2030, reaching roughly 1 terawatt-hour (TWh). While new storage technologies are emerging as potential future competitors, the current market does not yet reflect these risks.

Battery energy storage is advancing further and faster than is widely recognized due to lower costs, strong policy support, and rapid growth in key regions. This creates significant opportunities and highlights the importance of tracking both cost trends and evolving technologies in the sector.