According to a latest report from market intelligence firm Clean Energy Associates (CEA), the U.S. energy storage system (ESS) battery manufacturing capacity is facing severe challenges.
As of 2025, approximately 21 gigawatt-hours (GWh) of planned ESS battery production capacity originally scheduled to come online by 2028 has been canceled. This significant setback primarily stems from newly imposed U.S. tariffs, trade policy uncertainties, coupled with multiple factors including financing difficulties and intensifying market competition.
Key impacts:
- 35% of planned ESS production capacity delayed or canceled
- Chinese battery manufacturers most affected by new 35% tariff
- 12 utility-scale storage projects now reconsidering technology procurement
- Domestic production targets under Inflation Reduction Act at risk
The cancellations represent nearly $3 billion in potential investments and threaten to slow America’s energy transition, with analysts warning of potential 15-20% cost increases for utility-scale storage projects through 2026. Industry leaders are calling for clearer policy signals to restore investor confidence in the domestic storage supply chain.
