The U.S. energy storage system (ESS) market is expanding rapidly, providing a potential cushion for Korean battery manufacturers facing slower growth in electric vehicles (EVs), according to Bernstein.
“The U.S. energy storage market is experiencing robust growth, with installations up 57% year-to-date to 23.7 GWh,” Bernstein said.
ESS growth is “outpacing the growth in solar and wind capacity,” with demand driven by grid resilience needs amid rising electrification and AI. Key states fueling this surge include Texas, California, Arizona, and Northern Virginia.
By 2025, total U.S. ESS and EV battery demand is expected to reach 192 GWh, up 20% year-on-year. Bernstein forecasts ESS growth of 50% to 51 GWh, while EV battery demand will grow only 13%. “ESS is expected to account for 27% of the total which would be the highest ever,” the analysts wrote.
Trade tensions are reportedly reshaping the competitive landscape. “Current tariffs on Chinese ESS batteries are around 40% today and rising to 58% starting in 2026,” Bernstein noted, which could support U.S.-made batteries.
Korean manufacturers are said to be moving quickly: Bernstein notes that LG Energy Solution has already begun U.S. LFP production, with Samsung SDI and SK On set to follow in 2026. Tesla also plans LFP cell output in Nevada.
Samsung SDI is seen as the most aggressive in shifting capacity, with “over half of SDI’s battery manufacturing capacity will be dedicated to ESS applications (20 GWh) by YE26.”
The firm added that LGES will have the largest U.S. ESS capacity at 30 GWh, though this is just 15% of its 215 GWh total.
Still, Bernstein warned that despite booming ESS demand, oversupply looms. “US battery manufacturing capacity is projected to rise significantly from 338GWh YE25 to 601 GWh by YE26, representing a robust 78% y-o-y increase. This is likely to outpace demand growth of 20-30%,” the firm said.
