Morgan Stanley gives CATL a new identity: a giant in power infrastructure for the AI era

Recently, Morgan Stanley released a 60-page in-depth research report titled “Power for AI: Flexible Power - The Next Wave of Growth in AI.” The core view is that the true bottleneck in AI development is shifting from computing power to electricity, and energy storage systems (ESS) will become the key infrastructure to address this bottleneck. In this report, the global leader in power batteries, CATL, is explicitly listed as a “first-tier, highly confident beneficiary” of the energy storage value chain explosion.

AI-powered electricity has already become a $1.5 trillion market theme. However, Morgan Stanley analyst Jack Lu and his team pointed out in the report that as AI moves from the training phase to large-scale inference, the electricity demand exhibits a new characteristic: instantaneous, high-frequency, unpredictable fluctuations.

Traditional power grids and generation facilities are designed for predictable peak loads, but they struggle to cope with the load fluctuations brought by AI inference. The report thus makes a key judgment: the core contradiction in AI electricity is no longer capacity shortage but lack of flexibility.

Against this backdrop, energy storage systems are redefined. The report creatively compares energy storage to electricity inventory — capable of responding within milliseconds to smooth peaks and fill valleys, avoiding or delaying billions of dollars in investments in generation and transmission infrastructure. Morgan Stanley believes that building virtual power plants with energy storage is the most efficient capital strategy to solve AI’s power hunger.

Forecast data shows that the global deployment of energy storage systems is expected to grow from 325 GWh in 2025 to approximately 1,200 GWh by 2030, at a compound annual growth rate (CAGR) of 30%. Among these, data centers alone are projected to generate an additional 321 GWh of annual energy storage demand by 2030 — meaning that within the next five years, the demand from AI data centers alone could double the current energy storage market size.

Morgan Stanley’s positioning of CATL is not just as a beneficiary but as a rule-maker. The report clearly states that, leveraging its scale advantage, cost leadership, and readiness of sodium-ion batteries for commercialization, CATL has the capacity to significantly reduce the levelized cost of energy (LCOE) for energy storage, thereby promoting broader applications in AI data centers and power grids.

The report elaborates on CATL’s core competitiveness from three dimensions. In terms of technological leadership, it emphasizes the commercialization of sodium-ion batteries, which will provide critical resource security for reducing the cost per kWh of energy storage. In terms of full-stack capability, the report believes CATL has the system integration ability to address grid-level pain points. Financially, the report notes that the company’s ample capital provides a solid foundation for ongoing expansion and technological investment.

Morgan Stanley predicts that 2026 will be a pivotal year for multiple business lines of CATL. The company is forecasted to achieve a compound annual growth rate (CAGR) of 22.8% in profits from 2026 to 2027, with the potential to maintain over 20% annual growth through 2030. During a previous earnings briefing, CATL management also expressed confidence in achieving a 25%–30% CAGR over the next five years.

The report believes that as AI’s demand for electricity shifts from adequacy to flexibility and controllability, energy storage will evolve from an auxiliary facility to a core infrastructure. CATL is accelerating its transformation from a traditional power battery supplier to a zero-carbon infrastructure company.