The Chinese battery industry entered 2026 running two races simultaneously: manufacturing at ever-lower prices and ensuring that each new generation of equipment delivered greater value over its lifespan. Production scale pushed prices to levels that had seemed unattainable just a few years earlier, while LFP continued to evolve and chemistries like sodium-ion began to find a place beyond the laboratory.
But just as much of the market was looking towards 2027 expecting another turn of the screw on that curve, Chinese fiscal policy introduced pressure in the opposite direction .
The phased withdrawal of the benefit applied to battery exports had reduced the tax rebate from 9% to 6% during 2026 , leaving the elimination of the remaining percentage for January 1, 2027. From CATL 's perspective, this last move could introduce temporary pressure on manufacturing costs, although without altering the direction the company expected for the coming years.
“There is a small, momentary, very circumstantial increase, but we believe the trend will continue downwards,” said Ricardo Garro, Commercial Director for Latin America at CATL , during the panel “Networks, storage and new generation for the Peru of the future,” at Future Energy Summit Peru 2026 .
The discussion, however, quickly moved beyond simply how much a battery might cost next year. The manufacturer shifted the debate to a broader question: what variables would begin to define the profitability of BESS when the initial price alone no longer explained a project's competitiveness ?
And Peru emerged as a particularly interesting case to put that thesis to the test.
With a market still concentrated on early frequency regulation applications, but undergoing strong renewable expansion and growing needs for flexibility and grid connectivity, the Asian manufacturer projected a scenario in which batteries could move towards longer lifespans, new services and volumes measured not only in MW but also in MWh.
The fiscal adjustment came just as the industry had broken another cost barrier
With the fiscal impact already factored into the 2027 scenario, Garro turned his attention to the other half of the equation. He explained that battery costs had fallen by around 90% in a decade , and the market was already beginning to break through the US$100/kWh benchmark, for years considered one of the major barriers to accelerating energy storage.
But CATL avoided projecting the next improvement in BESS solely based on further price reductions. The executive maintained that the evolution of the LFP had begun to modify variables crucial to the economic performance of the projects, especially degradation and available capacity during the first years of operation.
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“Technological advancements are increasingly making projects better, even if they cost the same,” Garro summarized.
This shift in focus moved the analysis from the cost of installing each kWh to the value the asset could generate over its entire lifespan. A system capable of maintaining greater capacity for a longer period could improve production and revenue even if the initial investment did not experience a corresponding decrease.
CATL's recent strategy aligned with this move. During 2026, the company launched a ten-hectare storage validation center in Xiamen, representing an investment of approximately US$440 million . This facility is designed to subject complete systems to grid conditions, high voltage, combustion, extreme temperatures, and electromagnetic compatibility. The objective was no longer solely to optimize the cell itself, but to verify how a power plant would perform at full scale before reaching the market.
Meanwhile, the manufacturer had opened another avenue with sodium-ion technology . Although initial commercial data still showed higher values than LFP, Garro highlighted its lower degradation and a lifespan that could reach 30 years . The comparison once again pushed the debate back to the same point: for CATL, the initial cost was becoming just one of the variables that defined the competitiveness of a BESS.
And that reading was particularly relevant for Peru, where storage was just beginning to expand its space beyond the first frequency services.
Peru emerged as the next commercial laboratory: from the first MW to the GWh
The reading was especially relevant in Peru , where the scale of storage still contrasted with the renewable volume that sought to enter the system.
The country has over 22 GW of solar and wind power projects in various stages of development , compared to just over 2.1 GW of operational capacity, and only around 3.7 GW of that portfolio had a Definitive Generation Concession. This gap shifted the discussion from the number of projects to how to integrate them, ensure their viability, and prevent expansion from being hampered by grid limitations.
In that scenario, battery storage systems (BSS) were beginning to find more space than that associated exclusively with frequency regulation. Peru projected a potential of close to 700 MW by 2030 , while hybrid developments such as Cotahuasi I, with 200 MW of photovoltaics and storage, were advancing , and other projects were incorporating batteries into both new power plants and existing facilities.
At the same time, Osinergmin launched procedures related to primary and secondary regulation during 2026, while the Ministry of Energy and Mines (MINEM) discussed new rules for complementary services.
It was on this still nascent market, with increasingly specific needs, that CATL expanded its strategy. Garro identified opportunities for batteries to provide stability to renewable energy generation and allow for the postponement of certain investments in transmission and distribution—two applications capable of taking the business well beyond initial ancillary services.
“There is a great opportunity to continue implementing batteries for multiple other uses, such as providing stability in renewable projects, standalone projects that postpone transmission and distribution investments,” the executive stated.
The next discussion, therefore, was no longer solely about how much storage Peru could install, but about the duration and functions of those systems. And that's where CATL raised the stakes: faced with an initial reference of around 500 MW raised during the panel, Garro pointed out that the international market was already migrating towards configurations of two, four, and even eight hours , opening the possibility that the country could begin to consider its next stage directly in terms of GWh.