Batteries had a banner 2024, but the outlook this year is less certain
Data DiveBattery manufacturing gained momentum in the United States in 2024 as demand grows for energy storage solutions, but uncertainty clouds the outlook this year. At least two high-profile battery factories have already been cancelled, and the Trump administration is gunning for clean energy.
Batteries attracted far more investments than any other type of clean technology production in the U.S. last year, because of their growing use in electric vehicles and in storing excess electricity from wind and solar farms, the Clean Investment Monitor’s latest spending data shows.
There are signs this enthusiasm may continue, despite political uncertainty with new leadership in Washington. The U.S. Energy Information Administration said last month that it expects both solar and battery installations to set new records this year in the U.S, even after a record 2024, boosting demand for more production.
Falling battery prices, tariffs on cheap Chinese batteries and federal tax incentives in the 2022 Inflation Reduction Act have made domestic production more attractive and competitive.
But much will depend on whether Republicans in Congress axe the federal tax credits for manufacturing and deploying battery storage from the Biden-era climate law. As the industry waits to see what happens next on Capitol Hill, two high-profile projects were cancelled in February: KORE Power’s EV battery plant in Arizona and Freyr Battery’s plant in Georgia.
The chart shows about $43.7 billion was spent on battery manufacturing efforts in the U.S. last year, seven times as much as was spent on making electric vehicles, according to the monitor, a database jointly developed by the Rhodium Group and Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research to track investments and deployment of clean technologies.