There’s a good chance that whatever device you’re using to read this story is powered by a Chinese-made battery. And until recently, this was also true for many electric vehicles. That’s because the US, Europe, Japan and other parts of the globe have spent decades outsourcing batteries and battery manufacturing to China for cost reasons. That country then took that lead and ran with it to the point where it now accounts for more than 80% of battery manufacturing capacity, according to S&P Global.

Lately, the US in particular has been playing catch-up. And the good news is that it seems to be working.

New details compiled last week by an economic analyst and a data journalist Joey Politano reveals that US lithium-ion battery production has grown significantly in recent years, particularly since the passage of the Inflation Reduction Act (IRA).

Despite the unwieldy name of this legislation, it is perhaps the most important climate- and jobs-focused bill ever passed into law, packed with incentives to develop and manufacture green energy technologies — including batteries for electric vehicles — domestically and not abroad. In fact, according to Politano’s data, battery production has actually increased by 25% in the US since 2023.

Politano told InsideEVs that his conclusion comes from two sources: the US Census Manufacturers’ Shipments, Inventories, and Orders (M3) survey and the Bureau of Labor Statistics’ producer price index for battery manufacturing. He tracks such trends and more and his Substiva.

His findings build on other studies I’ve seen that confirm this trend. Conformable International Energy Agency (IEA) data for MayChina’s global investment in cleantech manufacturing and controlling the battery space is actually down from 2022 and 2023. You can thank local manufacturing growth for much of that; investment tripled in the US and Europe in 2023. It should also get even better when we can see the full data this year; “40% of investments in clean energy production in 2023 were in facilities due to come online in 2024,” the IEA said in its report. S&P reports that US investment in electric vehicle battery manufacturing was $40 billion between 2020 and the third quarter of 2023 alone.

Photo by: InsideEVs

This also applies to US battery use for our power grid. The Guardian recently reported that America has dramatically stepped up production and installation of huge backup batteries that can be used in blackouts this year. “From almost nothing a few years ago, the US is now adding utility-scale batteries at a breakneck pace, having installed more than 20 gigawatts of battery capacity on the electric grid,” the story said. “This means that battery storage equivalent to the output of 20 nuclear reactors has been attached to America’s power grid in just four years, with the EIA predicting that this capacity could double again to 40 GW by 2025 if there are further expansions planned”.

People tend to think of lithium-ion batteries only in terms of a car, but that’s only part of what’s happening in America right now. However, batteries and the development of battery technology have spread throughout the power space, and growing them here for use in cars is a great way to get things moving. This is how America gets good at doing it. Much of this in recent years has been related to the IRA, which allowed automakers to offer a tax credit of up to $7,500 for the purchase of an electric vehicle if it and its batteries were made in North America. Because no automaker wants to compete with another without that advantage, battery factories are popping up all over the U.S. to support the EV sector—including red and purple states.

Hyundai Motors Group Metaplant in Savannah, Georgia

That’s worth noting here because now President-elect Donald Trump has promised to repeal IRA provisions, get rid of tax credits and incentives for electric vehicles, and claw back unspent funds. Whether it can is a matter of open debate; killing the entire IRA would require an act of Congress, and many if not all elected officials would want to keep those EV and battery manufacturing jobs in their districts. In addition, the EV race is now a matter of technological competition with America’s toughest geopolitical opponent. The auto industry is certainly a big part of it, but it’s only a part; this race goes into almost anything that uses or will use electricity.

It is true that the battery industry will very likely continue to go it alone without subsidies. Demand for battery-powered devices isn’t going anywhere, and in the car world, sales of purely internal combustion vehicles peaked globally in 2017 and have been in decline ever since. But China has invested a huge amount of national and regional funding into batteries, electric vehicles and more; if the US is to have a chance to compete with such a giant and avoid becoming simply an importer of the world’s cutting-edge technology, the next occupant of the White House would do well to take note of what actually works now.

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