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Schrödinger's Battery

Jan Gunash · Co-Founder & CGO · May 4, 2026

The supply chain that is simultaneously everywhere and impossible to see.

The best questions are not always the comfortable ones. Like: when we say the battery storage boom is one of the great success stories of the clean energy transition, do we actually know what is inside those batteries? And when the answer turns out to be almost entirely one country, what does it mean that almost nobody can see it?

Schrödinger's cat exists in an uncertain state because observing it changes everything. The battery supply chain works the same way. It is simultaneously the foundation of the clean energy transition and a system almost nobody can see inside. It is simultaneously Chinese and not Chinese until a compliance check forces you to look. It is simultaneously secure and fragile until a tariff collapses the waveform. The battery is everywhere. The data about what is inside it is almost nowhere.

These are not rhetorical questions. The battery storage market is growing faster than almost any energy technology in history. The supply chain enabling that growth is more concentrated than almost any critical infrastructure the world has ever built. And the data systems that should make both of those facts legible to planners, investors, and governments are startlingly thin.

A Boom by Any Measure

Something genuinely remarkable is happening in energy storage. Energy storage systems totalled 275.3 GWh in 2025, a 61% increase from the previous year. In 2026, the world is expected to add another 353.4 GWh of energy storage capacity, driven significantly by demand from AI data centres (source: InfoLink / Energy Industry Review). Global stationary energy storage capacity grew 65% between 2024 and 2025 and is expected to grow a further 58% in 2026, with battery prices falling 9% in both 2024 and 2025 supporting that growth (source: Triodos IM). The IEA forecasts global investment in battery storage will rise 16% this year to $66 billion, and UBS raised its 2026 forecast for global battery installations by 25% last month (source: IEA / Business Standard).

Battery storage has moved from a supporting technology for renewable energy into a central pillar of grid modernisation. What was once considered a niche clean energy tool is now valued as highly as generation capacity itself for the flexibility and resilience it provides.

The numbers are real. The transition they are enabling is real. But behind every gigawatt-hour of storage sits a supply chain that almost no public data infrastructure is designed to see inside.

One Country, One Supply Chain

China was responsible for 80% of global battery cell production in 2024. For LFP, the dominant chemistry for grid-scale energy storage, that figure exceeds 98% (source: IEA Critical Minerals Outlook 2025 / IEA Global EV Outlook 2025). China supplies approximately 85% of global cathode active materials across both NMC and LFP chemistries, and holds around 70% of global lithium processing capacity (source: IEA Global EV Outlook 2025 / EIA). All six of the world's top battery cell suppliers are Chinese, and nine of the top ten (source: InfoLink / Business Standard).

Chinese companies are on track to lift global shipments of lithium-ion battery cells for energy storage by about 75%, with exports of batteries for energy storage and electric vehicles already exceeding $65 billion (source: Electronics For You / Business Standard). The energy transition runs on batteries. Batteries run through China. That is not a political statement. It is a supply chain fact. And it is a fact that the global data infrastructure for energy has been remarkably slow to make visible in a form that planners and investors can actually act on.

This is not a criticism of China's industrial strategy. It is the result of fifteen years of coordinated policy that the rest of the world is only now beginning to respond to. The consequences of that concentration are felt differently depending on where you sit. When the U.S. introduced FEOC regulations restricting Chinese battery content from federal incentives, battery costs rose 56 to 69% almost overnight. Europe is watching its battery manufacturing ambitions stall. Developing economies building out renewable grids have almost no negotiating leverage over the supply chain they depend on. A concentrated supply chain means one country sets the price, the terms, and the pace.

The Decoupling That Cannot Be Measured

The U.S. response to this concentration has been significant and rapid. FEOC regulations restricting batteries with Chinese content from receiving federal incentives took effect in 2026. Tariffs implemented since January 2025 have raised battery storage costs between 56 and 69% (source: Cleanview / PV Magazine). The Foundation for Defense of Democracies has described China's grip on the battery supply chain as a significant threat to U.S. economic and security interests, calling batteries the bullets of the future (source: FDD).

The policy intent is clear. The data to implement it is not.

FEOC compliance requires knowing exactly how much Chinese content is in any given battery system, at which point in the supply chain that content entered, and what the realistic alternatives are at each stage. None of that information exists in any comprehensive public form. Battery supply chains involve dozens of processing steps across multiple countries, each adding value in ways that are tracked by commercial agreements rather than public registries. A cathode material processed in South Korea from lithium refined in China from ore mined in Australia passes through a supply chain that existing data frameworks are not designed to trace in the granularity that FEOC compliance now requires.

This is the Schrödinger problem made concrete. The battery is either compliant or non-compliant. But you cannot know which until you look inside. And the tools to look inside do not yet exist at the scale the policy requires.

As China responds to U.S. restrictions by establishing manufacturing facilities in Europe and forming local partnerships, battery globalisation is shifting from product exports to technology licensing and local manufacturing (source: Roland Berger). The supply chain becomes simultaneously more geographically dispersed and harder to track. The data trail gets thinner as the geography gets wider.

The Secrecy at the Fastest Growing End

There is a specific and largely unreported data problem at exactly the segment of the battery market growing fastest. Battery storage projects for data centres are typically shrouded in secrecy (source: Canary Media). The deployment of battery storage as grid stabilisation infrastructure for AI data centres, now the single largest driver of new storage demand, generates almost no public data. No deployment figures. No pricing benchmarks. No supply chain disclosure. No performance data.

Data centres accounted for around 50% of total electricity demand growth in the United States in 2025, and the IEA projects they will account for half of U.S. electricity demand growth through 2030 (source: IEA Global Energy Review 2026). The battery systems being built to service that demand are among the most strategically significant infrastructure investments happening in energy right now. They sit at the intersection of AI, grid reliability, geopolitical competition, and the energy transition. And the data about them is almost entirely proprietary.

This is the same pattern that has appeared in every newsletter in this series. Critical infrastructure is being built. Consequential decisions are being made about where it goes, who supplies it, and what it costs. And the public data infrastructure to understand those decisions either does not exist or is deliberately withheld.

A Divide That Is Widening

The China and U.S. energy divide is not simply a geopolitical story. It is a data architecture story. China has consolidated leadership in clean energy technologies and supply chains through state-led industrial policy, while the U.S. is prioritising fossil fuel exports, a strategy that depends on stable trade relationships at a time when tariff measures add complexity to global energy markets (source: S&P Global). These two approaches produce two incompatible data environments. China's battery deployment data, pricing data, and supply chain data are published selectively and in formats that are not readily comparable with international standards. U.S. policy reversals have interrupted historical data series that clean energy investors and planners depended on.

The result is a global battery market growing at record speed in which the most important single question, where are the batteries coming from and what is really inside them, is the one the existing data infrastructure is least equipped to answer. U.S. legislation is forcing companies to restructure supply chains away from China, but those restructured supply chains are being built on data that is incomplete, delayed, and unevenly disclosed (source: Kleinman Center). The policy is moving faster than the information needed to implement it.

The Long Duration Opening

There is one part of the battery market where the Schrödinger problem looks different. Long duration storage, batteries that can last for days rather than hours, is a wide-open field where other countries can make inroads. Long duration technologies including flow batteries, compressed air, and gravity-based systems use different materials, different manufacturing processes, and different supply chains than the lithium-ion cells that China dominates (source: Bloomberg). They also require different data infrastructure, different performance benchmarks, and different regulatory frameworks.

This is the one area where the concentration risk does not yet exist and where early investment in data standards and supply chain transparency could create a different outcome than the one that produced today's lithium-ion dependency. The waveform has not yet collapsed. The window is open. It is not clear how long it will stay that way.

The Path Forward

The battery storage boom is real and it matters enormously for the energy transition. Every gigawatt-hour of storage deployed is a gigawatt-hour of flexibility that makes renewables more reliable, grids more resilient, and fossil fuel dependency less structurally necessary. But progress built on an opaque supply chain is progress that cannot be secured, verified, or replicated without the country that controls that supply chain.

What is needed is what has been needed in minerals, fertilizer, insurance, and climate monitoring throughout this series. Standardised, public supply chain disclosure at each stage of battery production. Transparent pricing benchmarks that do not require a paid subscription to access. Performance data from the data centre storage projects that are now the fastest growing segment of deployment. And international data sharing frameworks that treat battery supply chain transparency as a public good rather than a competitive advantage.

Schrödinger's cat resolves the moment you open the box. The battery supply chain will too. The question is whether we build the tools to open it before a crisis does it for us.

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Want to contribute your thoughts or findings in data and AI with climate, energy, or nature? Message Jan Gunash on LinkedIn or send an email to jgunash@projectcoeus.com.