U.S. Battery Policy Needs a Reboot

The U.S. Supreme Court’s ruling in Learning Resources v. Trump is noteworthy for the battery industry, not because of its impact on tariffs, but because it symbolizes the failure of U.S. industrial policy for advanced battery technology.  In its opinion the court held that President Trump’s use of the International Emergency Economic Powers Act (IEEPA) to impose tariffs on imports, including imports of batteries and battery materials, was unconstitutional.  

But what Learning Resources actually means for U.S. companies in the advanced battery industry is at this point anybody’s guess.  President Trump may well have the power to impose similar tariffs using other legislative tools going forward.  For companies that have paid IEEPA tariffs in the past there is the possibility of obtaining a refund.  But anyone who has listened to recent NAATBatt webinars on this topic knows that any company’s chances of receiving a refund are far from certain.  The result of Learning Resources in the U.S. battery industry is likely to be chaos in the near term, as accurately noted by one of the dissenting justices.  But that does not mean that Learning Resources is without importance. 

The importance of Learning Resources lies not in its impact on IEEPA tariffs.  Its lies instead in its marking of the symbolic failure of a U.S. industrial policy which tried to build a successful domestic battery industry (and many other industries) through a policy of protectionism. 

It was fate, perhaps, that on the same day the decision in Learning Resources came down, three excellent articles appeared in my in-box noting the failure of industrial policy for advanced battery technology in the United States and in the west at large.  All three articles accurately warn of serious long-term consequences should a major new supply of energy—advanced battery technology—become concentrated in and monopolized by a single country. 

The first and most sobering article is a commentary in Batteries International by Shmuel de Leon titled “Western Battery Manufacturing is in Freefall—and Running Out of Time.”  In his commentary Mr. de Leon notes that China not only dominates the advanced battery technology today but is continuing to pull ahead at a rapid pace.  He notes that in his 35 years in the industry he has “never seen a crisis like the one facing us now.”  Mr. de Leon credits a stable, long-term government policy in China for its increasing dominance. 

The second article is “An EV Is the Best Defense Against a Military Assault” by Kenan Sahin of CAMX Power.  In his article, Dr. Sahin makes the point that EV’s are in and of themselves a strategic commodity and must not be treated, by the left or the right, as a Rorschach test (my words, not Dr. Sahin’s).  Like Mr. de Leon, Dr. Sahin bemoans the increasing dominance of EV technology by China and notes its dangerous military implications. 

Finally, “America is Falling Behind in the Global EV Race—That’s Going to Cost the U.S. Auto Industry” by Hengrui Liu and Kelly Sims Gallagher of Tufts University focuses on the slowing market for EV’s in the United States at a time when EV’s increasingly dominate international auto sales.  Global EV registrations rose 20% globally in 2025 but were flat in the United States.  Electrification of vehicle drivetrains is the auto technology of the future.  Drs. Liu and Gallagher note that once competence in electrification technology is lost in the United States, it will be difficult to regain and lead to a serious industrial competitiveness problem. 

The alarm bells in the U.S. advanced battery and automobile industries are clearly ringing.  The more difficult question, however, is what to do about it.  It is almost certain that what the United States should not do is wall itself off from better battery technology, EV automotive technology and battery materials in the rest of the world through IEEPA or similar tariffs.  But it is also true that that massive federal subsidies of individual battery and battery materials Gigafactory projects have yielded no better result. 

Let’s use this Learning Resources moment to define a better path forward.  In my view, that better path forward should have three elements. 

First, let’s concede the for the foreseeable future, large scale manufacturing of lithium batteries and battery materials will be dominated by China.  There is not sufficient political support or support from the western capital markets necessary to make the massive investments in industrial infrastructure that could even conceivably challenge this dominance.  

But what is left after the mega-scale manufacturing of batteries by China are dozens of smaller, niche battery applications.  Some of those niche applications might prove to be rather large (i.e., certain aspects of energy storage in hyperscale data centers).  Those smaller niche markets may offer western battery companies with opportunities to improve their battery competence, innovate new technologies, and, most importantly, protect their margins.  Government support should focus on these niche markets.

The second element is to get closer to the leaders in battery technology and learn from them.  This will be complicated as everyone knows what the game is and the technology leaders will make great efforts to protect their advantage.  But knowledge and know-how naturally transfer over time and through contact.  Wise government policies can help accelerate this transfer.  China’s experience obtaining western technology over the last 30 years is an obvious case in point.  While there are certainly highly strategic aspects of battery technology where protectionism will be necessary, those areas should be defined as narrowly as possible.  Battery market integration should be the guiding principle. 

The third element is international cooperation.  The concentration of battery technology expertise in China is not just a threat to the United States.  It is a threat to every other country in the world except China.  “Made in the USA” is a great slogan and an easy sell.  But the most important focus of policy for large scale manufacturing of batteries and battery materials must be “Made Anywhere but China.”  A broad enough coalition of international partners focused on diversifying battery and battery material supplies for everyone should be able to stand up such alternative sources without imposing an undue burden or politically impossible expenditures on any one country. 

It is time to reboot our battery strategy.