What could a new president mean for US batteries?

With Donald Trump on his way back to the White House, the battery industry will be concerned it is set to face another term under which the responsibility to advance battery technology falls largely to the private sector.

Recently elected as the 47th President, the expectation is that Trump will do much the same as he did when he was last in the Oval Office.

Speaking before before the Economic Club of New York in September, he vowed to rescind any “unspent” funds under the Inflation Reduction Act. His administration is likely to pull out of the Paris Agreement just as it did last time and will also focus again on increasing fossil fuel production.

Throw in a budding public working relationship with Elon Musk (which has seen him soften his view on electric vehicles) plus an increased focus on national security across the board and there could be good and bad in this for the US battery sector.

Chinese companies accounted for over 80% of global shipments of key lithium-ion battery components in 2023, according to Japanese financial newspaper Nikkei. Lithium-ion cells from China are already subject to a 25% tariff under the Biden administration. The percentage of that tariff could also rise under Trump.

In contrast, the Trump administration’s focus on national security and critical minerals (of which there are 50) could tangentially support lithium battery supply chain efforts by increasing domestic capacity for lithium processing, even if the impact isn’t felt tangibly until the next presidential term because it will take time to build out supply to meet increased demand.

Dr Ulrich Ehmes, CEO of lithium-sulphur (Li-S) battery developer Theion, is an outspoken advocate of ensuring the global battery supply chain is not impacted by an ever-changing geopolitical landscape.

“I would strongly recommend choosing the battery active material that can be sourced in a geopolitically stable supply chain. What I see today is a lot of lithium iron phosphate (LFP) chemistries because it is cheaper than nickel manganese cobalt but around 90% of these materials are processed in China,” says Ehmes.

“I like China, but putting all of our eggs in one basket leaves little redundancy. I think it is important to spread the sources to be more resilient.”

The German battery expert says the industry is typically conservative in its adoption of new technology. Around 30 years ago the sector began transitioning from nickel cadmium to lithium-ion. Ehmes describes this as an evolutionary change that takes time to develop, cycle and validate before putting into production.

“Now after 30 years it is time again to think about what is the next generation. The only difference is disruption this time round has different criteria: We need a material that is not only energy dense, needs to be cost-effective, geopolitically resilient and have a low-to-zero carbon dioxide footprint. That last point is very important not only from mine to active material but then also to process the active material and put it into a battery,” says Ehmes.

The time is now

A stable and robust set of industrial policies is absolutely critical for ensuring success in the development and, even more critically, scale-up and deployment of new battery chemistries, says Richard Wang, founder of Crevasse Consulting.

“Battery chemistries are extremely complex to scale up both from a technological and manufacturing perspective and they require substantial investments and a high degree of patience to drive successful outcomes. These factors make them relatively unattractive for private investors to invest in absent long-term and very robust industrial policy from governments,” Wang tells us.

Although Musk’s endorsement could have changed the incumbent president’s tack, the US battery industry came to rely on success in the private sector as its greatest incubator for technology during his last term — boosted by a surge of investment. Four years later and spurred on by the Inflation Reduction Act it is time to build on that momentum, says Wang.

“It’s increasingly critical for the US to step up to the plate as China’s competitive lead in the battery industry across the entire spectrum [supply chain, cell and pack design, manufacturing efficiency, cost and technology] is already enormous and growing larger day by day. Pretty soon, China may entirely leave the rest of the world behind in batteries, in the same way that TSMC and Taiwan have done for semiconductors.”

Harnessing the power of simulation

With a US battery industry potentially forced to rely more heavily upon private sector funding, the use of simulation models to enable a “fail fast” approach is likely to grow even more popular. Companies such as Rolls-Royce and Audi to LG and Tesla all deploy simulation models when testing new cells.

Deploying this technology at scale will also be key to scaling the battery industry more widely and allowing smaller players outside of the top roster of automotive and hardware giants to iterate at a greater rate. Traditional physical hardware-based prototyping is comparatively slow and expensive. It is also resource-heavy and logistically challenging.

“Simulations can reduce the risk of innovation, allowing us to do it from a laptop rather than in a laboratory,” Dr Yashraj Tripathy, head of Product at About:Energy, UK battery software scale-up that provides organisations with the tools to streamline R&D, tells us. “The problem is battery cells are incredibly complex therefore building a simulation tool that can accurately model requires a cross-disciplinary team of electrical engineers, electrochemistry, chemistry, mechanical engineers — pretty much everyone coming together.”

Tripathy says the simulation models his team has built can cut cell testing time from six months to four weeks. “This allows a democratisation of early-stage battery research,” he adds. “If someone is building a small aircraft or vehicle and does not have the money to invest in 50 different cell types, we can narrow that range down for them to five or 10 and provide models for testing.”

“If US policies deprioritise the battery supply chain, it is going to have a damning impact on any non-China battery supply chain strategies,” Tripathy adds. “However, with Elon Musk in the mix, it is going to be an interesting time where political intent (driven by climate denier vote banks and corporates) could be overpowered by foreign relations, and business priorities.” 

Tripahty believe this is where companies like About:Energy come in. “Simulations and digital twins are likely to gain even more traction as the US battery industry seeks efficiency and innovation in response to reduced state support and potential tariffs on Chinese products. These tools can help optimise processes and reduce costs in a more competitive and privately funded landscape.”

The four-year blueprint for US battery development will require maintaining momentum gained during the last four, boosted by Inflation Reduction Act investment and possibly with an increased reliance on simulation-driven research to accelerate innovation. Companies, not just in the US, and governments will need to diversify supply chains in an increasingly unstable geopolitical landscape to avoid over-reliance on China.

This has been the message coming out of the US battery industry for years. The Inflation Reduction Act looked like the beginning of the answer. The question now is what impact will Trump’s second term have on those efforts to catch up with China?

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