Can the US battery market untangle from China?

<div data-chronoton-summary="&lt;ul&gt;&lt;br&gt;&lt;li&gt;&lt;strong&gt;A surprise ban rattles the industry.&lt;/strong&gt; Trump&#039;s executive order banning Chinese batteries from grid-scale energy storage caught domestic players off guard, and could delay or cancel projects while developers scramble for alternatives.&lt;/li&gt;&lt;br&gt;&lt;li&gt;&lt;strong&gt;Homegrown supply is coming, but not yet.&lt;/strong&gt; US battery factories from LG, Samsung, and others are ramping up, but domestic supply likely won&#039;t meet demand until the 2030s — leaving a potential gap in the meantime.&lt;/li&gt;&lt;br&gt;&lt;li&gt;&lt;strong&gt;The deeper tension has no easy answer.&lt;/strong&gt; China&#039;s dominance in batteries and solar is the result of years of investment and experience. Cutting off cheap, available technology to build local alternatives means paying more — at least for now.&lt;/li&gt;&lt;/ul&gt;" data-chronoton-post-id="1143791" data-chronoton-expand-collapse="1" data-chronoton-analytics-enabled="1"></div> <p>The US is hitting records for the rapid growth of its energy storage market. That’ll go a long way to shoring up the grid, increasing reliability and also cutting emissions, since batteries can help store energy from intermittent renewables like wind and solar.</p> <p>Crucially, this is all happening with the help of cheap Chinese batteries, though there’s been a concerted effort to reduce the US’s reliance on them. Most recently, in an executive order in late August, the Trump administration declared a national emergency that essentially bans Chinese batteries from being used in grid-scale energy storage systems.</p> <p>There’s an argument to be made about reducing reliance on any single source of a crucial energy technology. But all this tension raises a broader question for me: How much should countries take advantage of cheap, available tech, versus cutting off major sources to force development of their own factories even if that comes at a higher cost?</p> <p>This is hardly America’s first push to move away from Chinese influence in the battery supply chain. One of the major policy tools used in recent years is restricting the tax credits designed to incentivize use of the new technologies. Limiting the types of projects that are eligible can help reduce the cost of local technologies so they’re more competitive with otherwise cheaper imported options.</p> <p>Back <a href="https://www.technologyreview.com/2022/08/02/1056606/ev-tax-credits-battery-supply/" target="_blank" rel="noreferrer noopener">in 2022</a>, the US government designed the tax credits that were part of the Inflation Reduction Act to restrict where a battery’s minerals could be mined, processed, or recycled, as well as where a battery and its components were assembled.</p> <p>Those tax credits underwent a makeover in 2025, but the Trump administration has taken a similar tack. New legislation requires that starting in 2026, 55% of the cost of materials used for new energy storage projects must come from outside China and other restricted countries or the projects won’t qualify for tax credits.&nbsp;</p> <p>And we can’t forget about tariffs. Import taxes for batteries <a href="https://source.benchmarkminerals.com/article/us-battery-imports-fall-to-five-year-low-after-section-301-tariffs-raised-to-25-" target="_blank" rel="noreferrer noopener">increased to 25%</a> in January, up from 7.5%.</p> <p>But the new <a href="https://www.whitehouse.gov/presidential-actions/2026/08/declaring-a-national-emergency-to-secure-the-united-states-bulk-power-system/" target="_blank" rel="noreferrer noopener">executive order</a> is a more drastic move. It bans the installation of “any foreign-produced bulk-power system electric equipment” that poses a national security risk. The order specifically calls out battery energy storage systems, as well as inverters and transformers.</p> <p>“An outright ban was a bit of a surprise, and it does create a bit of concern for domestic players in the US,” says Shan Tomouk, energy storage and energy lead for Benchmark Mineral Intelligence, an energy industry analyst.</p> <p>The move is likely to slow deployment of grid-connected energy storage projects in the near term, according to analysis from BloombergNEF, an energy consultancy. Projects could face delays as developers wait for clarity on the rules.</p> <p>Depending on the detailed guidance from the Department of Energy, which is expected by the end of the year, some projects may need to find alternative sources for their cells, whether they’re domestically produced or imported from other countries. These will likely be more expensive than Chinese imports, says Isshu Kikuma, an energy storage analyst at BloombergNEF. “Worst case, those projects could get canceled,” he says.</p> <p>Technically, the order applies even to existing energy storage plants, though it’s unlikely that they’ll be taken offline because of their batteries’ origin. Since most of these plants currently use Chinese batteries, enforcing the order to the letter would essentially mean removing most installed battery energy storage from the US grid, Kikuma says.</p> <p>In the longer term, the US will eventually be able to meet its own demand for batteries. The country <a href="https://intelligence.benchmarkminerals.com/article/white-house-executive-order-prohibits-import-of-bess-systems-and-other-energy-equipment" target="_blank" rel="noreferrer noopener">could have enough capacity</a> by about 2030, though some factories may not ramp up or run at their full capability, meaning domestic supply won’t actually meet demand until later in the 2030s. </p> <p>New factories from LG Energy Solutions, Samsung SDI, Ford, and SK On are set to come online or ramp up by next year. In an ironic twist, a slowing EV market is helping, as some factories originally designed for vehicle batteries are retooling to build cells for grid storage instead.&nbsp;</p> <p>But it will come at a cost. Today, batteries produced in the US are still significantly more expensive than those made in China. Even switching to imports from other countries like South Korea would likely be more expensive.</p> <p>This is a crucial issue that goes beyond the US and even beyond batteries. China is miles ahead of much of the rest of the world on technologies like solar panels and batteries. Through years of government support and experience with research and manufacturing, the nation is an energy powerhouse.</p> <p>There’s a delicate political balance to maintain as the world figures out how to navigate this situation. There’s cheap technology on offer, which can help drastically reduce emissions and energy costs. But there can be risks associated with relying too much on any one player for crucial technologies.</p> <p><em>This article is from The Spark, </em>MIT Technology Review<em>’s weekly climate newsletter. 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