Can the US battery market untangle from China?
The US government is implementing stricter regulations to reduce reliance on Chinese-made batteries for grid-scale energy storage. New legislation requires that a significant portion of material costs for storage projects must originate outside of China to qualify for tax credits.
Why it matters
This policy shift highlights the tension between utilizing cost-effective global supply chains and the strategic push for domestic energy independence.
Energy storage is currently booming, largely thanks to cheap Chinese cells.
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.
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.
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