Tariffs, Policy Uncertainty Cancel 21GWh Plans
TL/DR –
The U.S. energy storage system (ESS) battery manufacturing capacity is experiencing extreme challenges, with around 21 gigawatt-hours (GWh) of planned ESS battery production capacity cancelled before 2028 due to new U.S. tariffs, trade policy uncertainties, and other issues. These cancellations, which represent 35% of the planned ESS production capacity, equate to almost $3 billion in potential investments and could cause 15-20% cost increases for utility-scale storage projects through 2026. The imposition of a new 35% tariff has particularly affected Chinese battery manufacturers.
U.S. Energy Storage System Production Challenges
Market intelligence firm Clean Energy Associates (CEA) reveals that the U.S. energy storage system (ESS) battery manufacturing sector faces severe challenges. By 2025, about 21 gigawatt-hours (GWh) of planned ESS battery production capacity, set to be operational by 2028, has been canceled. This significant setback arises from recent U.S. tariffs, trade policy uncertainties, financing difficulties, and escalating market competition.
Main Impacts:
- 35% of projected ESS production capacity delayed or canceled.
- Chinese battery makers most affected by a new 35% tariff.
- 12 utility-scale storage projects reevaluating technology procurement.
- Inflation Reduction Act’s domestic production goals at risk.
These cancellations equate to nearly $3 billion in potential investments and may hinder America’s energy transition. Analysts anticipate potential 15-20% cost increases for utility-scale storage projects through 2026. Industry leaders urge for clearer policy indications to reassure investors in the domestic storage supply chain.
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