US market, policy tailwinds drive domestic battery production uptick

The US battery industry is in a state of flux as federal policy shifts create uncertainty in the energy storage sector.  

Despite the unpredictability, however, one clear priority has emerged in recent weeks: strengthening domestic manufacturing. 

“The current administration has been very consistent around American technology and true American companies benefiting from American taxpayer funds,” said Hugh McDermott, senior vice president of business development and sales at iron flow energy storage company ESS, Inc.

McDermott told pv magazine, the America-centric approach will give a leg up to battery manufacturers who source materials and build systems within the US as domestically produced solutions are increasingly prioritized for incentives and tax credits.  

For instance, the 45X advanced manufacturing production tax credit established by the Inflation Reduction Act, in 2022, has played a key role in accelerating US battery manufacturing. The ability to monetize 45X credits has been vital for securing funding for battery production, even attracting traditionally conservative financial institutions such as J.P. Morgan Chase. 

Products made in the United States are also less vulnerable to tariffs. 

“Tariffs have continued to be the mechanism of choice for our government to manage a lot of different types of trade issues we have here in the US,” said Jim Wood, CEO of solar module producer SEG Solar, during a presentation at the Intersolar & Energy Storage North America 2025 trade event. Wood said that had been true under various presidents of both parties, adding, “It made a lot more sense to start reshoring our supply chain.”  

Many companies are investing in US-based manufacturing to mitigate the costs associated with fluctuating tariff rates, though the transition to domestic suppliers is often expensive at first. US trade body the Solar Energy Industries Association (SEIA) estimates domestic solar and storage manufacturing investment has more than doubled since 2022, to more than $40 billion worth of announcements in the last two years.

The SEIA has reported battery cell and pack production facilities that were announced thanks to federal manufacturing tax credits have begun to come online and more are expected within a few years. In addition, production lines for 580,000 metric tons of battery materials have been announced and are due online by 2030.

Supply chain security and resilience is a major motivation.  

Companies are increasingly focusing on developing robust supply chains that can weather global disruption. Shifting material-sourcing strategies enables companies to ensure reliability and take advantage of domestic content incentives.  

“The reason our customers buy from us, over others is because we have surety of supply,” said SEG Solar’s Wood. By producing products within US borders, he said, companies are much less impacted by volatile prices and the bottlenecks that often plague foreign supply chains.  

Thomas Gösswein, CEO of German energy storage manufacturer Fenecon, Inc, said all the tools used at the company’s plant in Greenville, South Carolina are American-made and purchased locally. Fenecon takes unbranded electric vehicle battery modules and performs software and hardware engineering to create new energy storage systems. 

“My guys are American,” said Gösswein at the Intersolar trade show. “We buy and make American products to make America great. That’s their idea and I’m proud of it.” 

Domestic battery manufacturing is on the rise nationwide and the industry shows few signs of slowing.

From pv magazine USA.