U.S. Department of Homeland Security analysts shared an internal report with local agencies in August, warning of the economic risks of using Chinese storage batteries. It warns that dependence on Chinese batteries could harm the development of a secure supply chain in the US.
The document, first obtained by the national security transparency nonprofit Property of the People and seen by WIRED, accuses Chinese companies of “using PRC state support to quickly and cheaply access the emerging U.S. energy storage industry for utility batteries and to create supply chain dependence on China,” and asks that any suspicious activity be reported.
In particular, the report claims that three companies – Contemporary Amperex Technology Co. Limited (CATL), Build Your Dreams (BYD) and Ruipu Energy Co. Ltd. (REPT) – “have taken advantage of the various forms of state support and used them to further business strategies to increase market share in the US.”
According to South Korean energy research firm SNE Research, CATL and BYD are currently by far the market leaders in energy storage batteries, with 40 percent and 12 percent market share respectively. Eight of the top ten companies in the industry are from China, so there are few alternatives to turn to when building network storage.
The report says it builds on previous papers that analyzed the use of uncompetitive tactics by Chinese “state-backed companies in the electric vehicle and battery supply chain.” DHS did not respond to a request for further comment.
In 2022, CATL inked a deal with Primergy Solar to build the largest U.S. solar and storage project in Nevada, which came online this year. The battery products have also been used by Duke Energy, a North Carolina-based utility, although the latter dropped CATL as a supplier for offshore electricity storage after national security concerns were raised by, in part, lawmakers in Washington.
In an emailed statement, Fred Zhang, a spokesperson for CATL, rejected the categorization that the company has relied on state aid to gain an edge. “CATL has achieved tremendous growth through continuous innovation, far-sighted strategic planning and commitment to high-quality products at a reasonable price,” the statement said.
BYD and REPT did not respond to WIRED's request for comment.
Following efforts to curb the competitiveness of Chinese EV companies, the US government is now also concerned about how domestic utilities could become overly dependent on Chinese batteries for energy storage.
