Five major risks are on the horizon, said Clean Energy Associates.
On January 20, 2025, Donald Trump will be inaugurated president of the United States, and analysts are predicting his administration will make sweeping changes to the clean energy landscape.
A report from Clean Energy Associates (CEA) highlighted five potential risks to the battery energy storage industry, including risks to EV batteries, grid-scale storage, and home battery energy storage.
1) Antidumping / countervailing duty enforcement
A new antidumping and countervailing duty (AD/CVD) petition was filed in December 2024 against imports of a critical battery material, anode active material (AAM), from China.
Anodes made with Chinese AAM and batteries would be subject to duties, which on average in recent orders have exceeded 100% of the cost of imported goods. About 74% of AD/CVD petitions result in new duties imposed on importers.
CEA said there is a high likelihood of this outcome, with a moderate impact on the market. It expects action to take place as soon as February 16, 2025.
2) UFLPA battery detentions
Incoming President Trump nominated Marco Rubio to Secretary of State, which CEA said brings elevated risk to far-reaching and more severe enforcement of the Uyghur Forced Labor Prevention Act (UFLPA).
Battery importers placed on the UFLPA list are faced with a rebuttable presumption that the product is contaminated with a supply chain that participated in forced labor. It can be very difficult to prove no finding of forced labor under a rebuttable presumption, meaning that most suppliers placed on a UFLPA list would be barred from bringing product to the United States.
This outcome, which would require action from the President, is considered highly likely to occur and is a high impact risk, said CEA. The report said UFLPA battery supplier enforcement could begin as soon as February 2025.
3) Section 301 60% tariff
Based on campaign promises, the Trump administration is expected to increase Section 301 tariffs to 60% on multiple goods from China. A 60% tariff would force battery procurement away from Chinese suppliers to Korean and Japanese suppliers and generally increase prices, said CEA.
CEA said the outcome is likely and will have a moderate-to-high impact on the market as soon as March 2025.
4) Tariffs on Section 232 battery supply chain
Reuters reported that Trump’s transition team has suggested adding tariffs to EV battery and supply chain tariffs under Section 232. CEA said proposed tariff levels are unknown, but could include battery energy storage systems.
CEA sees this as a moderate likelihood of occurring, with a moderate-to-high market risk, occurring in Q1 2026 or later.
5) Erosion of Section 48 Investment Tax Credit
CEA said it finds a full repeal of the Section 48E Investment Tax Credit (ITC) unlikely; however there is a distinct possibility it may be phased out as early as 2027, instead of in the mid-2030s. This shortening of the tax credits would likely take place as part of the bill reconciliation process.
Sunsetting the IRA tax credits would require action from both the President and Congress. CEA said there is a moderate-to-high risk of this happening, with a highly negative impact on the market as soon as Q2 2025.
