Nomura: ESS and Robot Batteries to Drive the Next Battery Boom as China Dominates

Nomura published a sweeping 50-page anchor report on the global battery sector on June 24, 2026, laying out what the Japanese investment bank describes as a fundamental structural shift in the industry — one defined less by raw volume growth and more by diverging competitive strategies across China, South Korea, and Japan. The timing matters: battery demand is accelerating in energy storage and emerging robotics applications even as electric vehicle growth in key Western markets disappoints, forcing investors to reassess where the real value lies.

The report's central argument is straightforward but consequential: the battery industry is no longer a monolithic growth story. It is fracturing into distinct segments with different winners, different chemistries, and different geopolitical risk profiles.

China Tightens Its Grip, Despite Western Headwinds

Nomura's analysts project global EV battery demand to reach 1.8TWh in 2030 and 2.7TWh in 2035, implying a 9.5% compound annual growth rate over 2026–35. But the more striking number is China's share: the country is expected to command 78% of global EV battery market share and 80% of energy storage system (ESS) battery market share in 2026, even as the US and Europe erect increasingly aggressive regulatory barriers.

China's dominance is structural, not cyclical. It rests on leadership in lithium iron phosphate (LFP) chemistry — which now accounts for 61% of the global battery market — and a vertically integrated supply chain that rivals cannot replicate quickly. According to data cited in the report, China's battery shipments surged 48.5% year-on-year to 783GWh in the first five months of 2026, with ESS shipments up a striking 88% year-on-year.

Contemporary Amperex Technology (CATL), remains Nomura's top global pick with a Buy rating and a target price of CNY612 — implying 49.6% upside from current levels. The firm forecasts CATL's battery sales to grow 43% year-on-year to 943GWh in FY2026, driven by ESS demand and larger battery packs per vehicle. CATL is also preparing to commercialize sodium-ion batteries at scale in 4Q2026, having signed a three-year agreement to supply 60GWh of sodium-ion cells for ESS applications to HyperStrong (688411 CH).

ESS Becomes the Industry's New Growth Engine

Nomura has revised its ESS battery demand forecast upward by 25% compared to six months ago, now projecting 17% annual growth through 2030 to reach 926GWh — roughly half the size of the EV battery market but growing faster. The revision reflects the unexpected acceleration of AI datacenter buildouts, which are creating demand for battery backup units (BBUs) at the rack level, utility-scale storage for renewable integration, and grid modernization programs.

The US represents approximately 20% of global ESS demand, with Nomura projecting US BESS demand of 113GWh in 2026 and 194GWh by 2030. This is where South Korea sees its opening. Korean battery makers — led by Samsung and LG Energy Solution — are targeting the US ESS market, where tariff barriers (38.4% on Chinese imports versus 10% on Korean) and domestic content requirements under the Inflation Reduction Act create meaningful competitive moats.

Nomura estimates Korean ESS battery market share in the US will reach 15% in 2026, rising toward 20% post-2030. Samsung SDI is the firm's preferred Korean pick, rated Buy with a target price of KRW900,000 — implying 68.9% upside. The bank forecasts SDI's ESS revenue will grow 54% year-on-year in 2026, with the company exiting operating losses from 3Q2026 as its US ESS capacity ramps to 20GWh.

However, Nomura notes a structural vulnerability: US-produced ESS batteries currently cost around USD150/kWh versus USD90/kWh for Chinese imports. Government subsidies — specifically the USD45/kWh Advanced Manufacturing Production Credit (AMPC) — narrow the gap to roughly USD95/kWh on an effective basis. But AMPC subsidies phase out from 2033, meaning Korean producers must achieve further cost reductions to remain competitive without policy support.

Robot Batteries: Small Volume, Outsized Value

Perhaps the most forward-looking section of the report concerns humanoid robot batteries — a market Nomura characterizes as a "high-value specialty" opportunity rather than a volume story. The bank has sharply revised its 2030 forecast upward, now projecting 1.2 million humanoid and quadruped robot shipments and battery demand of 9–16GWh (up from a prior estimate of 1.3GWh).

The economics are compelling. Robot batteries command cell prices of USD200–400/kWh — roughly three times the price of EV batteries — owing to customization requirements, high power density specifications, and lower production volumes. Nomura estimates the total robot battery market could reach USD2–4 billion by 2030. Unlike EVs, robot batteries require high C-rate capability for instant power delivery during locomotion and AI computation, favoring high-nickel NCM chemistries in the near term. However, the report notes that improving LFP performance and battery-swapping architectures could allow Chinese manufacturers to gain share in robot applications over time.

Replacement demand adds another dimension: with robot battery life cycles of just two to five years versus eight to ten years for EVs, recurring replacement demand could contribute an additional 2–4GWh annually by the early 2030s.

US EV Outlook Cut; Europe Revives

Nomura's auto team has materially cut its US EV forecast for 2035 to 2.13 million units from a prior estimate of 3.34 million, reflecting a structural pullback by major OEMs — Ford, GM, Honda, Volkswagen, and others — away from EV commitments under the current policy environment. US EV penetration is now projected at just 12.3% by 2035, down from a prior forecast of 19.4%.

Europe tells a different story. EU EV sales rose 26% year-on-year in January–May 2026, driven by Germany's reintroduction of EV subsidies of up to EUR6,000 per vehicle and the UK's extension of zero-emission vehicle mandates. The European Commission's proposed Industrial Accelerator Act, which requires batteries in publicly supported programs to source cells from within Europe, adds a structural tailwind for battery players with onshore European presence.

Lithium: Tight Balance, Moderate Price Recovery

On battery metals, Nomura expects lithium carbonate prices to recover moderately to USD22,000/tonne (CNY 170,000/tonne, approximately US$23.5 billion in annual market value at current volumes) in 2026 and USD24,600/tonne in 2027, up from USD9,700/tonne in 2025. Supply tightness stems from delays at CATL's Jianxiawo mine, Zimbabwe export restrictions, and reduced output guidance from Australia's Greenbushes operation — partially offset by mine restarts at Bald Hill and Finniss.

Nomura also flags nickel and cobalt as having price support from Indonesia's significantly reduced mining quotas and the DRC's cobalt export quota system.

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