The U.S. think tank website 'The National Interest' published an article titled "How the U.S. Can Leverage Excess Battery Supply to Gain Global Benefits" on September 10, authored by Sebastian Borell. The article is translated as follows:

Excess battery supply in the United States provides opportunities for expanding new markets, countering China's dominant position, and ensuring long-term energy competitiveness.

The production of electric vehicles (EVs) and related infrastructure continues to grow globally, with over 3.2 million EVs shipped worldwide in 2024. China accounts for 40% of these exports, holding a dominant position in the global market. The U.S. imposed an actual 100% tariff on Chinese EVs in May 2024 but remains a net importer of EVs, mainly through American original equipment manufacturers (OEMs) importing from Mexico. The main export market for the U.S. is Canada. Considering the significant changes made by the Trump administration so far in 2025, including increasing tariffs on Canada and Mexico, and eliminating tax credits aimed at encouraging domestic production, there has been a major shift in the strategic economic outlook of the U.S. Moreover, the U.S. is engaging in an economic competition with China for control and influence over the global market, both in words and actions, even though it is not inevitable.

Sino-U.S. Competition

Due to the fact that both China and the U.S. are seeking competitive advantages in global supply chains in their own ways, the U.S. currently lags behind in its efforts to participate in the growing electric vehicle and battery industry. China has made significant progress in outsourcing some manufacturing, establishing itself in India and Europe. This is likely the background of a reported deal between Reliance Industries, one of India's largest companies, and Hithium Energy Co., one of the world's largest fixed battery manufacturers, which is backed by Chinese investment. This transaction will allow key Chinese technologies to be exported to India and Chinese batteries to be produced in India, marking the first indication of technology transfer between China and another major global economy.

Trump's Energy-Focused Trade Strategy

The Trump administration attempted to compete on its own terms through successful oil and liquefied natural gas (LNG) energy trade negotiations. For example, the EU agreed to purchase more than $75 billion in LNG over three years, while the U.S. accepted purchasing American oil as a tariff reduction in numerous bilateral agreements after Trump's "Liberation Day." These transactions masked the serious vulnerabilities of U.S. global energy exports, failing to fully consider fundamental changes in supply chains and consumer demand.

Additionally, due to changes in market incentives, many U.S. manufacturers who were previously expanding domestic capacity have now canceled new plant construction plans. Due to the lack of downstream market effects, battery manufacturers and lithium suppliers face greater uncertainty. Bloomberg recently reported that as electric vehicle purchases and production decline, the U.S. faces the risk of a battery supply surplus. Interestingly, this contrasts sharply with China's surplus of solar panels.

China's Renewable Energy Expansion

China's advantage in the global energy market is not only reflected in the sales of electric vehicles, but also in its success in the manufacturing of solar panels. The surplus of supply has prompted Chinese companies to seek new markets in key developing regions, especially Africa. In fact, solar panel imports to Africa have nearly tripled over the past three years, and Chinese imports have increased by 60% in the past 12 months alone. Africa still heavily relies on oil and gas imports; however, the significant increase in alternative energy generation capacity indicates that permanent changes are beginning. In the long term, China's solar panel exports will weaken the U.S.-led energy exports - oil and gas. As the U.S. seeks to expand energy exports, especially to countries like South Africa, which currently face a 30% tariff, this may threaten the long-term sustainability of U.S. export markets.

However, U.S. battery manufacturers can learn from Chinese solar panel companies and look for new export markets. If the U.S. can utilize its battery production capacity and expand exports, it can avoid permanent losses in the trade war with China. With the decline in U.S. electric vehicle sales, U.S. battery inventories will need markets. Considering that African countries have started to use more solar panels, these markets will require larger battery storage capacity. As China takes into account the actions already taken by the U.S. in Africa, the U.S. can enter other markets in a competitive way, supplying long-term high-capacity energy storage devices. In other words, the U.S. can leverage its excess battery supply to ensure the security of underdeveloped potential markets that will need battery capacity in the long term. Although oil exports are expected to eventually decline, the U.S. can offset the decline in oil demand by increasing the demand for energy storage.

The Future Path of U.S. Energy Competition

This key strategic move could change the landscape of the U.S.-China energy competition. Trump's policies have created uncertainties regarding the feasibility of domestic battery and electric vehicle manufacturing industries. Nevertheless, the surplus of batteries may be the key to successfully gaining overseas export markets, creating a fair competitive environment for the U.S. in its economic balance competition with China.

U.S. manufacturing has been struggling to meet the requirements of the Trump administration by reducing reliance on products made in China. Changing the battery strategy could be a way to continue growing while fulfilling the Trump agenda.

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