Amid tariff uncertainty, US grid battery industry faces an uphill climb

Domestic battery manufacturing and deployments have been growing fast — but Trump’s tariff wars and looming budget cuts threaten to derail progress..

May 13, 2025

By: Jeff St. John

Companies making and deploying lithium-ion batteries in the U.S. recently gathered in Washington, D.C., to ask the federal government for the policy support they say they need. Their request came alongside a big promise: to cumulatively spend $100 billion by 2030 to build a self-sufficient, all-American grid battery industry. “Within five years, and with $100 billion in investment, we can satisfy 100% of U.S. demand for battery storage,” said Jason Grumet, CEO of the American Clean Power Association, a trade group. “This is unquestionably an ambitious commitment, but it is absolutely achievable if the private and public sectors work together,” he said. The $100 billion promise represents a major increase in the $10 billion to $15 billion that the American Clean Power Association estimates was invested in U.S. grid battery manufacturing and deployment last year.

As recently as a few months ago, industry analysts largely agreed that a domestic ramp-up on the scale of what Grumet proposes was at least possible, if not inevitable. Lucrative federal tax credits for companies that build and deploy clean energy technology within the nation’s borders have helped close the price gap between U.S.-made batteries and those made in China, the world’s main supplier of lithium-ion battery modules, cells, and materials. These tax incentives, created by the 2022 Inflation Reduction Act, have also helped bolster the economics of installing large-scale batteries alongside solar power. Solar and batteries are by far the fastest-to-deploy option for utilities seeking to meet rising electricity demand from data centers, factories, electric vehicles, and broader economic growth. The two energy sources have dominated new additions to the U.S. grid in recent years.

But that’s changing under the Trump administration.

Republicans in Congress may kill the Biden-era tax credits that make domestic battery manufacturing possible. The Department of Energy Loan Programs Office, which has lent huge sums to battery manufacturers like Eos and Kore Power, could soon be shuttered or radically scaled back. And President Donald Trump’s aggressive and ever-shifting tariffs are making it more expensive for manufacturers to produce batteries in the U.S., since the duties raise the costs of everything from cells imported from China to general-purpose materials like steel and aluminum.

On Monday, China and the U.S. announced they’d temporarily ease tariffs on one another, but the situation has not been permanently resolved and leaves tariffs on Chinese imports at 30%. Manufacturers and developers still lack clarity about what the underlying economics of their business will look like months from today.

As Grumet conceded in a briefing with reporters before the American Clean Power Association’s D.C. media event in April, ​“there is a remarkable tension right now between probably the best fundamentals for investment in the energy sector that we’ve seen in a generation and the greatest amount of uncertainty that we’ve seen in a generation.”

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This year's first major heat wave is here. How will the ERCOT power grid hold up?

By Claire Hao, Staff writer

May 13, 2025

The Texas power grid is expected to sail through the first major heat wave of the year without issue, largely thanks to its diverse and growing mix of power plants and renewable energy.

That’s an observation energy professionals closely following the Texas Legislature made with some irony, as state lawmakers have proposed numerous bills to constrain the very same renewable energy that's expected to help keep the power grid afloat this week.

"If there is not a crisis (this week), it's in part because of these resources that right now get considered to be not important or not having very much value,” said Aaron Zubaty, CEO of Eolian, a California-based company with battery storage projects in Texas.

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