Q2 reports from Clean Energy Associates indicate that in the United States, numerous ESS manufacturing projects are being put on the back burner or abandoned; however, home production is gaining traction, as the costs are lower.
More than 20 GWh of 2028 planned energy storage cell production capacities have been shelved in the first half of the year so far, according to the Q2 2025 energy storage supply, tech, policy, and pricing reports from the consulting firm Clean Energy Associates.
The shelved projects also include the 9.6 GWh/year facility in the United States state of Arizona by KORE Power and the 10.2 GWh/year facility by FREYR in Georgia. The entire subset of projects with a capacity of one to five GWh / year in the Southeast and the Midwest has also been shelved, as policy risks and funding mistakes have become crippling for the small players.
The firm would be greatly hampered in its business if 21 GWh of the 2028 annual demand were lost, assuming the 100 GWh target is realized.
However, the study also found that local integrated systems are becoming a progressively practical solution in the United States due to the widening capabilities of local integrators and OEMs. The widening capabilities enable the integration of local networks and the use of spare or substitute parts for integrators.
Rather than sourcing manufacturing in low-cost nations, the paper further states that the bigger integrators are embracing end-market co-location of their facilities, for example, the Chinese manufacturer that, in recent years, installed a 10 GWh battery production facility in the state of Texas.
These end-prices are thus “relatively reasonable” in production-cost terms. The inbuilt ESS capabilities do, however, involve a cost premium of 15-20%; but, the paper argues, “siting manufacturing in the U.S. is the best option for mitigating tariff risk, even if costs are elevated” due to lower Chinese content. However, for the cathode and anode products, the CEA is of the opinion that for a North American value chain, it will be “possible though difficult” to reduce tariff exposure, as the tariffs will impact steel and aluminum, as well as parts of the battery.
For American builders targeting the export market, purchasing cells and systems from Southeast Asia or South Korea could be their best opportunity for avoiding up to $40/kWh in duties, the study findings assert. Domestic integrators of hardware are thus best positioned to “mix and match” points of supply in the quest for the lowest costs, the findings continue.
Although the majority of Southeast Asian announced capacities are for EV battery production, the CEA’s comment that the trend of offshore solar power production will also continue for lithium-ion ESS is clear. The consulting firm “expects hundreds of joint ventures, expansions, and production ramps in the months ahead for the region.”
Though primary-phase non-China lithium-iron-phosphate (LFP) cell production is in its formative days, the paper adds that additional supplies will later in early 2026 become available in the United States, in South Korea, in Malaysia, and in Indonesia (although the currently passed budget bill’s conditions of the foreign-entities-of-concern could make the issue of least-cost supply contentious).
Relatively low and stable lithium prices should also be taken into account, favorably for BESS project developers in countries that are not heavily protected by trade barriers. Non-lithium battery technologies and the recyclability of lithium-ion batteries, however, could face challenges because the prices of lithium are forecast to remain lower than the current pace of $10 / kilogram for most of the rest of the decade.
