Sungrow Responds to Battery Cell Strategy: Committed to Asset-Light Model and Cell Neutrality

Sungrow Clearly Responds: No In-House Cell Production, Staying Asset-Light

On April 27, Sungrow formally addressed market concerns about whether the company is considering expanding into upstream battery cell manufacturing during an earnings call. The company stated unequivocally that its cell-neutral principle will not change, and it will continue to pursue an asset-light operating model without entering the cell manufacturing business.

In recent years, as the energy storage market has experienced rapid growth, vertical integration across the supply chain has become an increasingly prominent trend, with many energy storage system integrators extending their reach into upstream cell production. Against this backdrop, Sungrow's strategic positioning has drawn widespread attention from investors.

Deep Collaboration Over Heavy-Asset Investment

During the call, Sungrow revealed that the company has already partnered with multiple collaborators to pursue joint innovation across both winding and stacking technology pathways, and has "successfully defined battery cells." This means that while Sungrow does not directly manufacture cells, it possesses the capability to deeply participate in and define critical specifications such as technical parameters and performance benchmarks.

The company further noted that heavy-asset operations carry significant risks, which remains one of the core reasons behind its decision not to produce cells. Instead, Sungrow is exploring ways to establish closer partnerships with cell manufacturers across the following dimensions:

• Strategic Cooperation: Building long-term strategic partnerships with core cell suppliers
• Supply Chain Synergy: Strengthening deep integration at the supply chain level to ensure supply stability
• Joint R&D: Conducting collaborative research and development in cell technology innovation to drive product performance improvements
• Market Collaboration: Jointly developing markets to achieve mutual benefits
• Capital Ties: Even considering cross-shareholding arrangements to further solidify cooperative relationships

Industry Significance of the 'Cell-Neutral' Strategy

Sungrow's "cell-neutral" strategy carries a unique competitive logic within the current energy storage industry landscape. By not binding itself to a single cell supplier, the company can flexibly select the best-performing and most cost-effective cell products available on the market, thereby maintaining technological leadership and cost advantages at the system integration level.

At the same time, by deeply engaging in upstream technology through "successfully defining battery cells," Sungrow has effectively secured core influence over its supply chain without bearing the risks associated with heavy assets. This "asset-light plus strong definition" model may well become an important development paradigm for energy storage system integrators.

Outlook: Collaborative Symbiosis May Become the Industry's Dominant Theme

In an environment of intensifying competition and declining cell prices across the energy storage sector, Sungrow's choice to participate in upstream activities through deep collaboration rather than building its own production capacity reflects a prudent assessment of industry cycles and operational risks. Looking ahead, as capital cooperation models such as cross-shareholding advance, the relationship between Sungrow and cell manufacturers is expected to evolve from a simple supply-demand dynamic into a community of shared interests — providing a new template for collaborative development across the energy storage value chain.