Asia-Pacific battery costs keep hitting record lows through 2029, according to Wood Mackenzie

The “APAC utility-scale energy storage pricing report 2025” analysis by Wood Mackenzie reveals that Chinese battery and system prices are dropping to record lows. The decline stems from rapid technology innovation, stabilisation of raw material costs, massive scale, and intense market competition. However, battery prices may increase after 2029 as demand growth exceeds lithium supply.  

“In our forecast China will continue to be the cheapest market for utility-scale battery energy storage systems (BESS) in APAC, with costs dropping 35% to US$84 per kilowatt-hour by 2034,” Jiayue Zheng, Senior Research Analyst at Wood Mackenzie.  

“System costs across Asia Pacific vary significantly due to import restrictions, local content requirements, certification standards and grid requirements.” 

China dominates the global battery energy storage system market in both scale and the most competitive pricing. The country's market leadership stems from billions in technology investments, manufacturing overcapacity and intense competition among domestic suppliers, creating a highly competitive environment that has driven battery module costs to unprecedented lows in 2025. 

High costs in Australia and Japan reflect local market dynamics and supply chain constraints 

The report covers five major APAC markets: China, Australia, Japan, South Korea and India. Most markets are transitioning to Lithium Iron Phosphate (LFP) battery chemistry, except South Korea, which will persist with Nickel Manganese Cobalt (NMC) chemistry given its established domestic manufacturing base. 

APAC faces significant engineering, procurement and construction (EPC) cost disparities for battery projects, ranging from US$59/kWh to US$117/kWh across the region. Higher labour costs in Australia and Japan drive EPC expenses up to nearly double those in China and India. While Australia benefits from competitive battery pricing through Chinese manufacturers, persistent workforce shortages in the clean energy sector continue to elevate construction costs, offsetting some of the price reductions.  

In Japan, the preference for domestic battery system products creates an even starker contrast, with system costs reaching up to three times higher than China despite the gradual market entry of international manufacturers. “Our forecast considers that the average storage duration of a utility-scale project in APAC will increase from 2.4 hours in 2025 to 3.4 hours by 2034, with longer-duration systems offering cost advantages of up to 20% per kilowatt-hour due to economies of scale in EPC costs,” said Natalie Thompson, Senior Research Analyst at Wood Mackenzie.   

India presents the strongest cost reduction potential, with turnkey costs expected to decrease nearly 40% by 2034, supported by government initiatives including the Viability Gap Funding scheme and low labour costs. 

“Lower battery costs have pushed energy storage investments to new highs in Asia Pacific – we see a market of over US$500 billion in the next decade, already overtaking coal and gas power investments. As the region transitions towards longer duration systems and grapples with trade and supply chain uncertainties, understanding these cost dynamics will be essential for project developers, investors, and policymakers” said Alex Whitworth, Vice President at Wood Mackenzie.