How to Crush the American Battery Boom

In July, Donald Trump’s administration announced a staggering 93.5 percent tariff on Chinese graphite—a material essential to battery production. China not only dominates graphite mining but also controls 96 percent of the global supply of processed anode-grade graphite, a key component of lithium ion batteries. The move sent shockwaves through the already fragile battery supply chain and all but guarantees higher costs for U.S. manufacturers. It’s only the latest in a string of irrational policies that make it harder, not easier, to bring manufacturing back home.

This summer, congressional Republicans passed the president’s massively unpopular budget bill, rolling back Joe Biden’s signature clean energy legislation, the Inflation Reduction Act (IRA). While much of the attention on the bill’s energy components has focused on the damage to the wind and solar industries, the legislation will also upend the booming battery business, gutting one of the economy’s fastest-growing and strategically vital industries. While the Biden administration made substantial progress in building a domestic battery supply chain, Trump is kneecapping battery manufacturing in the U.S. by crushing demand and hiking up input costs.

The contradictions in Trump’s “America First” strategy are hard to miss: The White House pushes policies to streamline critical minerals production while dismantling the industries that need such minerals; it taxes essential imports without supporting adequate domestic replacements; and it proclaims its mission to bring back American manufacturing jobs while enacting policies that shut down factories.

America’s clean energy transition cannot be stopped, but it can be slowed. Trump and the Republicans have decided to do just that—even if it means fewer jobs, higher prices, and more energy dependence.

The industrial policies passed under Biden ushered in a resurgence in American manufacturing by employing carrots (tax credits) and sticks (tariffs and domestic content requirements). The IRA, the Bipartisan Infrastructure Law (BIL), and the CHIPS Act jump-started a clean energy boom, using targeted public investment to catalyze trillions in private capital.

The Biden administration strategically designed an industrial policy for batteries. Tax credits “derisked” investment and improved the cost-competitiveness of domestic battery manufacturing, while Foreign Entity of Concern (FEOC) provisions penalized companies that continued to rely on imported battery components. Those restrictions were set to tighten gradually, giving American firms more time to build out a domestic supply chain.

It worked. According to the Clean Investment Monitor, Biden’s green industrial strategy tripled quarterly investment in clean manufacturing from 2022 to 2025. Since the IRA was passed, more than 380 clean tech factories have been announced, with 161 already operational. Of the $115 billion in manufacturing investment the IRA attracted, batteries led the way, accounting for 69 percent. In a short time, the Biden incentives made U.S. battery production cost-competitive with China—which dominates over three-quarters of the global battery supply chain—and put the nation on track to meet all of domestic battery demand with a Made in America battery manufacturing industry by 2030.

But then the Republican Party returned to power.

Trump’s signature legislation, the One Big Beautiful Bill Act, signed in July, guts the tax credits that help American manufacturing catch up to China, while his administration continues to impose tariffs in a blunderbuss manner. The main outcome of this so-called economic “strategy” will be higher inflation and persistent shortages of foreign goods and commodities. And the effects of Trump’s tariffs are only beginning to reach consumers.

Since Trump’s inauguration, more than $27 billion of investment in clean energy manufacturing has been canceled, bankrupted, delayed, or scaled back, taking nearly 19,000 jobs. More EV manufacturing facilities, including battery plants, were canceled in the first three months of 2025 than in all 2023 and 2024 combined.

The elimination of the EV tax credit and the EPA’s move to rescind Biden-era tailpipe emissions regulations deals a blow to EV adoption, but it will cripple America’s battery manufacturing. A report by Princeton’s ZERO Lab estimates that not only could these repeals result in the cancellation of an eyepopping 100 percent of planned battery facilities, but they also potentially threaten to shut down up to 72 percent of battery manufacturing plants. Withdraw market incentives, and the market dries up. EV sales could also fall 30 percent by 2027 and 40 percent by 2030. That translates to 8.3 million fewer EVs, and 8.3 million fewer batteries needed to power them.

The IRA didn’t just spur investment in battery manufacturing; it helped create over 133,000 decent blue-collar jobs in battery production in just two years. Within the first five months of Trump’s presidency, more than 6,000 of those jobs were wiped out.

With the passage of the One Big Beautiful Bill, the nonpartisan energy policy think tank Energy Innovation projects that 31,000 battery jobs will evaporate by 2030. But the more profound tragedy is the number of American jobs—approaching 1 million—in manufacturing, supporting industries, and local economies that will now never materialize.

These aren’t workforce reductions for a dying industry. They are layoffs in the sectors of tomorrow—cuts to a technology that makes a more resilient, affordable energy system for America possible.

Trump and the GOP are doubling down on fossil fuels as the economics of renewables—even paired with the costs of battery storage—make that strategy irrational. Batteries absorb electricity during the day while prices are low and discharge it during peak demand hours, improving grid reliability and cutting energy costs for consumers.

Look at Texas, the country’s largest deregulated electricity market, where battery storage is booming to take advantage of dirt-cheap solar power. The growth of solar and batteries there has significantly reduced the risk of grid emergencies for which the Lone Star State had become infamous. Solar provides power during the hottest hours of the day, while batteries store the excess and release it as the sun sets. In California, where battery capacity has exploded 30-fold since 2018, record discharges of battery power during last year’s extreme heat meant that the state didn’t need to issue a single energy conservation alert.

Ironically, battery storage provides precisely the type of dispatchable energy that Trump administration officials claim they want. A recent report by the North American Electric Reliability Corporation, a nonprofit regulatory authority that sets and enforces grid reliability standards, found that battery expansion improved overall grid reliability even as the rapid uptake of data centers increases strain on the system.

Energy Secretary Chris Wright has pulled support for long-duration battery storage projects and cut funding for scientific research into advanced battery technologies. As one former senior Department of Energy official told The Guardian, “If you stop any research for next generation solar or battery technology, or wind or geothermal or other pieces, what you’re effectively doing is compromising a huge range of technology that has the potential to reduce costs.”

For all its talk about American energy dominance and lower prices, raising energy costs is exactly what the Trump administration’s policies are accomplishing. Since January, thanks to Trump’s tariffs, short-term battery storage costs have risen 56 percent to 69 percent. Unsurprisingly, deployment of battery storage on the grid is expected to fall 30 percent over the next decade. The Trump administration likes to harp constantly about supporting “affordable, reliable, and secure energy”—they forget to add “as long as it suits my party’s ideological priors.”

This comes as Trump and the GOP rail against U.S. dependence on Chinese batteries and the need to reshore American manufacturing, after passing a bill that decimates the domestic battery industry.

While the final version of the GOP mega bill technically retains the advanced manufacturing tax credit for battery producers, new FEOC rules (read: China) impose unworkable domestic content requirements that make the credits inaccessible. Both complex and overly restrictive, the FEOC provisions will require regulatory guidance from the Treasury Department—a process that took two years under Biden. Until then, it’s unlikely that companies will invest without knowing whether they’ll qualify for the credits.

Meanwhile, the GOP is aggressively deregulating extractive industries. While boosting critical mineral production can support the buildout of a domestic supply chain, it makes little sense to simultaneously undercut the high-value-add industries like battery manufacturing that create the very demand for those minerals.

Yet Trump is doing just that. He has leaned on the Cold War–era Defense Production Act to boost investment in critical mineral production. The Department of the Interior is streamlining permitting processes for lithium mines. Trump strong-armed Ukraine President Volodymyr Zelensky into granting the U.S. sweeping economic privileges over Ukraine’s mineral resources. However, these resources are critical because they serve the transition to clean energy. Why produce more lithium if not to make more batteries?

Trump announced a 50 percent tariff in July on copper imports, citing the critical need for the conductive metal in everything from semiconductors to ships to batteries. But the U.S. imports 40 percent of its copper, and there’s no alternative path to achieve copper self-sufficiency in the near or long term. Whereas a new battery plant can come online within two years, a new mine can take over 20 years to open up production. In the U.S., the average development time to open a new copper mine takes up to 32 years. Investors can hardly expect American trade policy to remain stable for 30 days, let alone during the remaining three-plus years of Trump’s term in office. Ultimately, the Trump administration and congressional Republicans have been pursuing policies to expand domestic mining, refining, and processing of critical minerals—arguably worthy goals, but not if you’re simultaneously destroying the manufacturing of products derived from such resources. They are ceding the lead in clean tech to China so the U.S. can become a raw materials exporter like so many Third World nations trapped in the cycle of extraction without development.

Justin Wolfers, the University of Michigan economist, accurately sums up Trump’s “plan” to restore U.S. manufacturing: “Raise the price of inputs like steel, aluminum & copper; create shortages of rare earths; invite retaliatory tariffs; cut R&D; raise borrowing costs by blowing out the budget; and … cover it all in a thick cloud of uncertainty.”

The 50 percent tariff on imported steel has doubled the price of domestic steel, yet many companies still import because even inflated foreign steel is cheaper. The nascent American battery industry hasn’t had enough time to relocate its supply chain. China still dominates the global market for key battery components, which U.S. companies must depend on until suitable (and competitive) domestic alternatives emerge. Trump’s on-again, off-again tariff wars don’t guide investment—they paralyze it.

Trump returned to office partly under the dubious promise to “Make America Great Again” by reviving domestic manufacturing and restoring high-wage blue-collar jobs. Now he and the GOP aren’t just breaking that promise, they’re spitting in the face of the Americans who believed them.