Powin ‘struggling to compete with Chinese OEMs’ integrated BESS offerings’ – Energy-Storage.News

Powin’s Financial Challenges and Industry Context

Powin, an early leader in the US battery energy storage system (BESS) sector, announced on 29 May that it faces the risk of ceasing operations within two months due to significant financial difficulties. These challenges reflect broader headwinds in the energy storage industry, including ongoing US-China import tariffs and uncertainty surrounding future US tax credit incentives. An independent manager from Uzzi & Lall was appointed to collaborate with Powin’s management on determining next steps. Subsequently, Powin filed for Chapter 11 bankruptcy protection, with many employees departing the company.

Powin’s Evolution and Market Position

Early Market Leadership

Powin began as a developer and technology provider for battery storage projects before pivoting in 2017 to focus on system integration. Early projects in the mid-2010s, such as landmark BESS installations in California following the Aliso Canyon gas leak, demonstrated batteries’ potential to enhance grid reliability. Powin was among the first to deploy projects in North America, including California and Ontario, Canada, positioning itself ahead of market growth.

Competitive Pressures and Market Shifts

• Powin’s business model relied on importing lithium-ion battery cells from China and integrating them into complete BESS systems, emphasizing its proprietary battery management system (BMS).
• From 2019, Chinese battery cell manufacturers like CATL began producing integrated BESS products, intensifying competition.
• This competition led to a 40% price drop in Chinese BESS products in 2024 and advancements in higher energy density systems, particularly 5MWh capacity within standard 20-foot containers.
• Powin and Fluence were among the first non-Chinese companies to launch 5MWh BESS units, but only in May 2024, trailing Chinese manufacturers by approximately nine months.
• The industry is now shifting back to modular and larger solutions, with Chinese manufacturers leading innovations by leveraging larger battery cells.

Impact of Chinese Cell Suppliers Moving Up the Value Chain

Chinese and South Korean cell manufacturers have vertically integrated their production, offering complete energy storage containers that challenge traditional system integrators like Powin. This shift has pressured companies outside China to differentiate their offerings amid intense price competition and market consolidation.

• US and European integrators such as Fluence, Wärtsilä, and Tesla historically added value by integrating cell technology into fully functional systems.
• Developers now question the unique value propositions of integrators like Powin compared to vertically integrated Chinese suppliers.
• Chinese dominance in the US BESS market is significant, with BloombergNEF using Chinese import data as a benchmark for grid-scale battery storage costs.

Financial Red Flags and Operational Challenges

Powin’s financial difficulties were foreshadowed by a US court complaint filed by CATL seeking arbitration over approximately US$44 million in unpaid invoices for battery shipments in 2022 and 2023. Credit data indicates Powin’s payment delays to suppliers worsened significantly in early 2025, with Days Beyond Terms (DBT) rising from 14 in December 2024 to 37 in May 2025. The proportion of suppliers waiting over three months for payment increased from 4.5% in February to 41% in May, signaling deepening cash flow issues.

Trade barriers, customs delays, and rising component prices due to US tariffs on China and Southeast Asia likely contributed to Powin’s financial distress and bankruptcy filing.

Industry Outlook and Sustainable Development Goals (SDGs) Implications

Market Consolidation and Quality Focus

Despite challenges, the US energy storage market continues to grow rapidly, contributing to SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action) by supporting renewable energy integration and grid reliability. Industry consolidation is expected, with higher-end integrators emphasizing product quality, reliability, and service to differentiate themselves.

• Companies like Fluence and Tesla focus on stability, comprehensive product support, and engineering excellence.
• Quality and warranty assurance remain critical for customer confidence and long-term sustainability of energy storage solutions.
• Market dynamics may see fluctuations between low-cost entrants and premium providers, similar to other mature industries.

Contribution to Sustainable Development Goals

1. SDG 7 – Affordable and Clean Energy: Battery energy storage systems enable increased renewable energy penetration and grid stability, essential for transitioning to sustainable energy sources.
2. SDG 9 – Industry, Innovation, and Infrastructure: The evolution of BESS technologies and integration models fosters innovation and resilient infrastructure development.
3. SDG 12 – Responsible Consumption and Production: Emphasis on quality, durability, and warranty in BESS products promotes sustainable consumption patterns and reduces waste.
4. SDG 13 – Climate Action: Energy storage supports decarbonization efforts by facilitating renewable energy use and reducing reliance on fossil fuels.
5. SDG 17 – Partnerships for the Goals: Collaboration among manufacturers, integrators, policymakers, and financiers is critical to overcoming trade barriers and fostering a sustainable energy storage industry.

Conclusion

Powin’s financial struggles highlight the intense competitive and operational challenges within the global BESS industry. The shift towards vertically integrated manufacturing by Chinese suppliers has transformed market dynamics, pressuring traditional integrators to innovate and focus on quality. Despite these challenges, the energy storage sector remains vital to achieving multiple Sustainable Development Goals by enabling clean energy adoption and climate mitigation. Future industry success will depend on balancing cost competitiveness with product reliability and fostering collaborative efforts to address trade and policy uncertainties.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 7: Affordable and Clean Energy
   • The article discusses battery energy storage systems (BESS), which are critical for integrating renewable energy and improving grid reliability.
2. SDG 9: Industry, Innovation and Infrastructure
   • Focus on technological innovation in battery storage and the competition between manufacturers and integrators.
3. SDG 12: Responsible Consumption and Production
   • Issues related to supply chain challenges, tariffs, and financial sustainability of companies in the energy storage sector.
4. SDG 13: Climate Action
   • Battery storage supports renewable energy adoption, which is essential for climate change mitigation.

2. Specific Targets Under Those SDGs Identified

1. SDG 7: Affordable and Clean Energy
   • Target 7.2: Increase substantially the share of renewable energy in the global energy mix.
   • Target 7.3: Double the global rate of improvement in energy efficiency.
2. SDG 9: Industry, Innovation and Infrastructure
   • Target 9.4: Upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies.
   • Target 9.5: Enhance scientific research, upgrade technological capabilities of industrial sectors.
3. SDG 12: Responsible Consumption and Production
   • Target 12.2: Achieve sustainable management and efficient use of natural resources.
   • Target 12.6: Encourage companies to adopt sustainable practices and sustainability reporting.
4. SDG 13: Climate Action
   • Target 13.1: Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters.
   • Target 13.2: Integrate climate change measures into policies and planning.

3. Indicators Mentioned or Implied to Measure Progress

1. SDG 7 Indicators
   • Proportion of population with access to electricity (implied through grid reliability improvements via BESS).
   • Installed renewable energy capacity (implied by deployment of battery storage systems supporting renewables).
2. SDG 9 Indicators
   • Research and development expenditure as a proportion of GDP (implied by innovation and technology development in BESS).
   • Manufacturing value added as a proportion of GDP (implied by the growth and competition in BESS manufacturing and integration).
3. SDG 12 Indicators
   • Number of companies publishing sustainability reports (implied by discussion on financial health and supply chain transparency).
   • Waste generated per unit of production (implied by quality and warranty issues affecting product lifecycle).
4. SDG 13 Indicators
   • Number of countries with national and local disaster risk reduction strategies (implied by the role of BESS in grid resilience).
   • Greenhouse gas emissions per unit of GDP (implied by the shift to clean energy storage solutions).
5. Additional Implied Indicators
   • Financial health indicators such as Days Beyond Terms (DBT) to measure company payment performance and sustainability.
   • Market share and price competitiveness of BESS products as indicators of industry health and innovation.

4. Table: SDGs, Targets and Indicators

Source: energy-storage.news