Can the US battery market untangle from China?

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. 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?

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.

Back in 2022, 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. 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.

And we can’t forget about tariffs. Import taxes for batteries increased to 25% in January, up from 7.5%. But the new executive order 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. 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.