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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Tesla is no longer the world’s foremost electric vehicle maker — a decline in last-year’s sales, disclosed on Friday, has left it second fiddle to China’s BYD. But cars aren’t the only territory Elon Musk’s company is attempting to stake out. For big batteries, Tesla may be able to put up a stronger fight.

Chinese battery makers have one major advantage: their products get cheaper every year. That’s helped them lap competitors in supplying power sources for electric vehicles: the country produces 75 per cent of the world’s lithium-ion batteries. Then there are the huge rechargeable batteries used by electricity grids. Chinese giants such as CATL have also made inroads there, but their position is not unassailable.

Energy storage systems are becoming a critical part of renewable power rollouts as solar and wind adoption grows. They store electricity when there is excess power on sunny or windy days, and grids increasingly depend on such batteries to stabilise frequency.

These systems used to be a niche business for global battery makers, which derived their fattest margins from making vehicles. But utilities and data centres have been deploying energy storage as core infrastructure. CATL, BYD and Eve Energy have been the biggest beneficiaries of this shift, as have system integrators such as Sungrow and Huawei.

CATL now accounts for nearly 40 per cent of the global market. In Europe, Chinese groups grew their share particularly fast in 2024, up two-thirds year over year, according to Wood Mackenzie data. Sungrow is leading the expansion, more than doubling its market share to 21 per cent.

Yet the US, the biggest customer base after China by installed capacity, has been an exception. Tesla dominates there with a 39 per cent share, despite Chinese rivals having a significant pricing advantage.

The reason for this American exceptionalism is that for grids, hardware is not the full package. Tesla sells a product that bundles kit, software, grid integration and long-term service into a single offering. Grid operators can’t take chances: they are providers of critical infrastructure and have lifespans of around 20 years. That makes warranties and accountability more important than incremental differences in battery cell costs.

Europe’s current openness to Chinese batteries may prove temporary for the same reasons. As storage projects grow in scale and batteries become more embedded, prices may become less important than integration capabilities and the provider’s record. Chinese makers will no doubt focus on warranties and integration too, but political risk works against them.

For now, Chinese makers still have a significant chance to gain more ground. They are improving technology rapidly and benefit from scale. But where electric car buyers seem increasingly willing to go Chinese, unhappily for Tesla, the giant battery market may follow a different path.

june.yoon@ft.com

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

The gold price is set to extend its historic rally to hit fresh highs in 2026, although analysts expect the metal’s advance to slow after a year of stunning gains, according to a Financial Times survey.

The price of bullion, which soared 64 per cent in 2025, will rise by nearly 7 per cent to reach $4,610 per troy ounce by the end of this year, according to the average forecast of 11 analysts.

Many of the factors behind bullion’s blistering rally in 2025 are expected to remain intact this year, said analysts, including buying by emerging market central banks and investor demand for haven assets.

The most bullish prediction was for $5,400 per troy ounce — implying a gain of 25 per cent — from Nicky Shiels of refinery MKS Pamp, who said other analysts’ estimates had been “persistently too timid” in recent years.

“We are only in the early innings of the debasement cycle,” she said, a reference to how some investors are shifting assets into gold as a hedge against the US dollar, which weakened sharply last year.

Gold hit a record high of just under $4,550 per troy ounce in intraday trading on Dec 26, propelled in part by the US blockade of Venezuela. It has since fallen back slightly, amid a volatile end to year for precious metal prices.

With many analysts’ attributing gold’s rise to investor flows, Lina Thomas of Goldman Sachs said there was “significant upside” to her forecast of $4,900 for the end of the year “in a scenario where there’s additional investor diversification”.

She added that investors’ allocations to gold remained low and estimated that for every 0.01 percentage point by which US investors increase their portfolios’ allocation to bullion, the price would rise by around 1.4 per cent.

Investors and analysts largely failed to foresee the ferocity of last year’s rally, on average predicting a price of $2,795 by the end of 2025, compared with the $4,314 at which it closed the year. The survey reveals a large divergence between the most bearish and most bullish calls, with $1,900 separating the highest and lowest forecasts.

The gold price is becoming “harder to predict”, said Peter Taylor, head of commodity strategy at Macquarie Group, because it has been driven largely by investor sentiment and has become disconnected from supply and demand fundamentals.

Taylor, whose forecast of $4,200 for the fourth quarter of 2026 — implying a small fall over the course of the year — is among the most bearish, added he expects “we will see more macro news stability.”

Other bullish analysts point to central bank buying as a key booster for prices. Natasha Kaneva of JPMorgan expects central bank purchases of around 755 tonnes during 2026. Although slightly lower than previous years, that could still push prices towards $6,000 by 2028, she said.

At the same time, a number of analysts are taking the view that gold could fall this year.

The most bearish forecast comes from Rhona O’Connell at StoneX, who said prices could drop to $3,500 in a market that is becoming “overcrowded”.

“The majority of the tailwinds for the price have already been taken on board,” said O’Connell. “My feeling is that, barring a black swan event, there probably is not another wave of this investment to come.”

She highlighted the upcoming court decision on Federal Reserve governor Lisa Cook, who is contesting efforts by President Donald Trump to fire her, as a potential driver of the price in the near term. A ruling in favour of Cook, which would be viewed as supportive of the central bank’s independence, could weigh on gold, she said.

Natixis’s Bernard Dahdah pointed to bearish factors such as declining jewellery demand and the eventual end of the Fed’s rate cutting cycle, which is expected next year. He forecasts gold prices will average $4,200 during the fourth quarter of this year.

“At current price levels, we are already seeing signs of demand destruction within the jewellery sector, and central bank demand has also slowed down,” he said. “We think 2026 will be a year of price consolidation.”