European storage inventories on the rise
China's share of battery manufacturing ranges from roughly 70% to 95% across the value chain and is not expected to change materially in the short term, according to EUPD Research analyst Ali Arfa. The Chinese export tax rebate for battery products is set to fall from 9% to 6% before being eliminated in January 2027, which Arfa expects to bring forward shipments to Europe. EUPD Research estimates European residential energy storage installations at approximately 15 GWh to 17 GWh in 2026, and Arfa expects oversupply concerns in the residential and C&I segments in the fourth quarter of 2026 and first quarter of 2027, while utility-scale prices remain comparatively stable.
Why it matters: The segment-level divergence in storage pricing shows how a change in Chinese trade policy transmits through supply chains into European distribution channels, with inventory risk concentrated in residential and C&I sales rather than utility-scale projects.