Trump’s widespread tariffs are coming at a particularly bad time for the U.S. battery manufacturing sector — especially for grid-scale battery makers.
While domestic battery manufacturing capacity has doubled since 2022, capacity for manufacturing battery components — like anode and cathode material and separators — has grown much more slowly. Today, most battery factories in the U.S. (including Tesla’s factory in Nevada) still import at least half of their components, primarily from Asia, including China, Japan and Korea.
Only in the last year have companies really finalized their construction and import plans in the wake of the Inflation Reduction Act. At the start of 2025, there are nearly 700 gigawatt-hours of manufacturing capacity currently under construction.
Factory construction plans for automotive batteries are likely to maintain a relatively good trajectory, said Sam Jaffe, principal at 1019 Technologies. But stationary storage is much further behind in that regard. The U.S. expects to install around 50 gigawatt-hours worth of batteries this year, and there’s zero chance they can all be made domestically, Jaffe explained. Of the few factories that have started construction, none are even close to that type of capacity, he said.
Getting those factories into the construction pipeline took years of strategic planning, with specific calculations on exactly when and from where to import specific materials, Jaffe added.
The Trump administration’s decision to hit those countries of origin with tariffs of up to more than 50%, he said, “really disrupts the entire mechanism that’s been slowly grinding forward to create U.S.-made batteries.”
In part due to provisions in the IRA, the U.S. has a large base of planned construction for battery factories, he added. “The bad news is that the entire supply chain is not there.”
Even worse news, said Kwasi Ampofo, head of metals and mining at BloombergNEF, is that those supply chains are dominated by China, which will face tariffs of more than 100% starting Wednesday.
“These are high specialist, niche, high precision manufacturing processes, and you cannot build domestic capacity overnight,” Ampofo said, pointing specifically to battery cells and separators. “Even if you got the money from tariffs to pump into building new capacity, it’s similar to the chip industry — you can’t easily build expertise.” That means, he added, that U.S. battery makers may face “the highest Capex ever recorded.”
In the near term, Ampofo said he expects to see some producers take advantage of the tariff environment to try to attract capital to build up their domestic supply. But while they build that — assuming they can raise funds in such an uncertain environment — “someone still has to pay for [components] to be imported…we just don’t know who yet.”
Project prospects
For battery projects slated to be built this year, Jaffe said that there’s currently a “stockpile” of batteries in the U.S. that could provide a buffer. “There was an enormous import boom to the U.S. in the last three months,” he explained. “Everyone was buying everything they possibly could, and getting it shipped before April 2nd.”
Jaffe said he expects that the majority of stationary storage projects planned for 2025 will get built, but thanks to the tariffs, they’re likely to be smaller than expected. “And in 2026, that number could be zero.”
That’s partly because it will be prohibitively expensive to source batteries from places like China, and because it takes several years for domestic factories to be built — even those already in the works. On top of the reality of long timelines, battery manufacturers are now facing uncertainty on all sides, including the possible repeal of tax credits, and whether Trump will change his mind on tariff rates.
“It’s going to take several years for those factories to be built, and when you’re making strategic decisions around projects, you want clarity, and there isn’t any,” Jaffe said. That’s particularly challenging for gigafactories — many of which are first-of-a-kind, and all of which are very costly to build.
“It’s hard to imagine the [stationary storage] industry taking off and building gigafactories in the next few years,” he added.
