diff --git a/flixopt/components.py b/flixopt/components.py
index bdac6d2fb..1f5fe5ece 100644
--- a/flixopt/components.py
+++ b/flixopt/components.py
@@ -491,7 +491,7 @@ def do_modeling(self):
         self.add(
             self._model.add_constraints(
                 charge_state.isel(time=slice(1, None))
-                == charge_state.isel(time=slice(None, -1)) * (1 - rel_loss * hours_per_step)
+                == charge_state.isel(time=slice(None, -1)) * ((1 - rel_loss) ** hours_per_step)
                 + charge_rate * eff_charge * hours_per_step
                 - discharge_rate * eff_discharge * hours_per_step,
                 name=f'{self.label_full}|charge_state',
diff --git a/tests/test_storage.py b/tests/test_storage.py
index b88defaf6..a3b453c2b 100644
--- a/tests/test_storage.py
+++ b/tests/test_storage.py
@@ -165,7 +165,7 @@ def test_lossy_storage(self, basic_flow_system_linopy):
         assert_conequal(
             model.constraints['TestStorage|charge_state'],
             charge_state.isel(time=slice(1, None))
-            == charge_state.isel(time=slice(None, -1)) * (1 - rel_loss * hours_per_step)
+            == charge_state.isel(time=slice(None, -1)) * (1 - rel_loss) ** hours_per_step
             + charge_rate * eff_charge * hours_per_step - discharge_rate * eff_discharge * hours_per_step,
         )