Attempts to protect national automakers in the United States have already resulted in the imposition of protective duties on the import of Chinese electric vehicles and traction batteries into the country, but another problem is occupying the minds of local officials. In their opinion, the US energy industry’s dependence on lithium battery supplies from China poses a threat to national security.
Image Source: Tesla
The focus of manufacturers of stationary energy storage systems on the use of Chinese batteries, according to representatives of the US Department of Homeland Security, jeopardizes attempts to create stable supply chains within the country. According to American officials, Chinese companies are using government subsidies in China to quickly capture the American market for stationary energy storage systems and create dependence of the entire industry on China.
Specific subjects of such activities are also indicated – these are the largest suppliers of lithium batteries CATL and BYD, as well as the Chinese company Ruipu Energy Co. Ltd. The first two occupy a share of 40 and 12% in the global battery market, respectively, according to SNE Research. Overall, eight of the world’s largest lithium battery manufacturers are based in China. This makes it difficult to build infrastructure for stationary electricity storage systems by bypassing Chinese suppliers.
Several large energy projects are being implemented in the United States with the participation of CATL, although Duke Energy from North Carolina had to refuse to use its products in the construction of a floating energy storage complex because American parliamentarians intervened in the process. U.S. officials also oppose government subsidies for Chinese battery makers. CATL emphasized that it does not pretend to be, but has achieved its market position through continuous innovation, wise long-term planning and commitment to the principle of producing quality products at a reasonable price.
Wood Mackenzie analysts say Chinese battery suppliers have a larger share of the stationary energy storage market than they do of the electric vehicle market, reaching 90% versus 80%. Falling demand for electric vehicles has led to a surplus of batteries flooding into the stationary energy storage market, sending prices down. The US Department of Defense will lose the right to purchase batteries made by six Chinese companies for its needs from 2027, but some lawmakers are calling for a ban on the purchase of CATL batteries much earlier. Government subsidies for the development of battery production in the United States, according to experts, will help develop the necessary infrastructure in the country, but they will not reduce the cost of such products to the level inherent in Chinese ones.