While the long-term impacts of the elimination of the United States’ federal electric vehicle tax credit remain unknown, it’s clear that battery manufacturers in the country are starting to shift their approach toward grid-scale storage rather than EV batteries. LG Energy Solution, for instance, plans to expand its ESS facility in Michigan, and OEMs like SK and Samsung are entering the U.S. market as EV demand softens.
Still, for Ravi Manghani, the senior director of strategic sourcing at Anza Renewables, it’s more of a step-on-the-acceleration moment than a sudden change in strategy.
“We’ve seen the early signs of divergence take shape over the past several years, largely due to the way the Inflation Reduction Act structured its incentives,” he told ESS News, pointing out that the $7,500 federal EV credit required both the battery and its upstream materials to come from the US or allied countries with the storage investment tax credit (ITC) being tied mainly to domestic content. That’s part of what drove EV-focused battery OEMs to localize their US manufacturing footprints first.
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