CATL upgraded to AAA, Wärtsilä downgraded to BB in Q2

Contemporary Amperex Technology Co., Limited (CATL) has been upgraded to a AAA rating, while Wärtsilä Energy has been downgraded to BB in the Q2 2026 update to the Battery StorageTech Bankability Ratings Report. The changes reflect a rapidly evolving global battery energy storage system (BESS) market, where shifting cell prices, intense competition, and international expansion are reshaping supplier risk profiles.

Financial performance, exposure to battery-cell costs, manufacturing scale, and the ability to compete in international markets are now critical factors in assessing a storage provider's long-term bankability. The report's methodology was updated to place greater emphasis on battery cell production, a response to changing market dynamics like the recent spike in lithium carbonate prices. This shift shows the strategic advantage of vertical integration, where suppliers controlling both cell production and energy storage system manufacturing are better positioned to manage input-cost volatility.

Supplier ratings shift with market dynamics

CATL's upgrade to the top AAA rating was driven by strong growth in its energy storage business revenue and its vertically integrated model. Conversely, Finland's Wärtsilä was downgraded from BBB to BB. The downgrade stems from persistently low energy storage orders and the company's decision to spin off its ESS business into a joint venture with RCT Solutions, which is expected to be loss-making in 2026. This move highlights the growing pressure on established system integrators to demonstrate sustainable order growth and profitability.

Other Chinese integrated lithium-ion cell and BESS players, including Rept Battero, CALB, and Eve Energy, posted strong profit increases. US system integrator Fluence reported an all-time high backlog of US$5.6 billion.

The overall bankability score is calculated based on a company's financial health, manufacturing operations, and shipments. Companies are benchmarked against each other on risk metrics and placed into a final ranking from AAA to C.

Chinese suppliers accelerate global expansion

Intense domestic competition and pressure on system margins in China are pushing established and emerging suppliers to seek growth in international markets. The recent rise in lithium carbonate prices and resulting increase in LFP cell prices have further squeezed integrators' profit margins, especially for those scaling up.

Suppliers are mitigating this risk by accelerating expansion into global markets. For example, RelyEZ, which previously delivered over 95% of its 2024 and 2025 shipment volume domestically in China, has expanded into Europe with deliveries to sites in Poland and Hungary this year. Overseas revenue share for Chinese-based suppliers rose by an average of 51% in the first half of 2026, increasing by 3 percentage points as a share of total revenue.

Eastern Europe has seen acute interest, driven by new funding schemes. South America is also priming for growth, with Argentina launching battery storage tenders in 2025 and Brazil scheduling its first battery storage auction for this year. Chile remains a key market due to high solar penetration.

Market consolidation and capacity investment

The top end of the energy storage market remains highly consolidated, suggesting scale and established market positions are key competitive advantages. The concentration ratio (market share) of the top five players (CR5) was around 39%, only a slight decline from 40% in 2025. The mid-tier is more contested, with suppliers competing in a market where price competition is intense and differentiation is difficult.

Investment in increasing production capacity has remained strong. In the first half of 2026, over 120 billion yuan worth of new battery manufacturing projects to be constructed in China were publicly announced. This scale of investment presents a potential contradiction, as suppliers add significant capacity amid existing competition and margin pressure. How quickly this new capacity is absorbed by demand will be a key factor for future pricing and profitability.

Outside China, efforts to localize the upstream battery supply chain continue. Battery-grade lithium carbonate is now being produced at GEL's facility in Cornwall, and Europe's first complete lithium processing site was completed this year in Finland.

The report depicts a BESS market that is expanding, becoming more competitive, and increasingly concentrated at the top. While new manufacturing investment and emerging markets create opportunities, suppliers must handle rising localisation requirements and the strategic tension between global expansion and establishing durable local positions.