In early May 2025, the U.S. energy storage industry announced a $100 billion investment aimed at developing domestic battery manufacturing capabilities to meet 100% of the nation's energy storage demand by 2030. This initiative comes in response to proposed tariffs on Chinese imports and potential repeals of clean energy subsidies under the Inflation Reduction Act (IRA).

The proposed tariffs could impose a 156% duty on energy storage imports from China, a significant development for a sector that currently relies on China for approximately 90% of its battery supplies. Industry leaders and analysts express concerns that the $100 billion investment may be insufficient to establish a competitive domestic supply chain from scratch, given the nascent state of U.S. battery manufacturing. Companies like Lightshift Energy and American Battery Factory continue to depend on Chinese components due to cost and supply limitations. Political support, stable tax policies, and streamlined permitting are deemed vital for the sector's success. Canceled U.S. projects and pending policy changes further contribute to the uncertainty, with experts emphasizing that building a robust battery manufacturing industry will require significantly more investment and long-term visibility.

Former Treasury Secretary Janet Yellen has warned that extensive tariffs on Chinese imports could have a severely negative impact on the U.S. economy, possibly even leading to a recession. She criticized the tariffs for harming U.S. businesses that depend on imported inputs, which constitute about 40% of the country's imports. Yellen compared the tariff strategy unfavorably with more targeted approaches, emphasizing the need for careful policy to avoid undermining growth in sectors vital to the energy transition.

The global shift to renewable energy and the growing demand from data centers are driving significant growth in energy storage systems, creating a new battleground for Chinese and South Korean battery manufacturers. The U.S. energy storage industry's commitment to invest $100 billion in domestic battery manufacturing is a significant step toward achieving energy independence and fostering economic growth. However, challenges such as reliance on Chinese components, policy uncertainties, and the sufficiency of the investment highlight the complexities involved in building a competitive domestic supply chain. The outcome of proposed tariffs and potential policy changes will play a crucial role in shaping the future of the U.S. energy storage sector.