Over the past few weeks, the wave of U.S. tariffs has reignited debates around global trade, industrial competition, and the clean energy transition. The steep duties targeting China’s EVs, batteries, and related components has led to many questions arising on what this means for the battery sector, with questions swirling around rising costs, potential supply chain disruptions, and slower adoption of electric mobility. However, despite the geopolitical tensions that gave rise to these tariffs, the EV electrification and specifically the battery industry is uniquely positioned to adapt, innovate, and thrive. As such, this turbulent period may prove to be a catalyst driving shifts for renewed investments, deeper collaborations, and faster technological breakthroughs. Indeed, while tariffs can alter trade flows and shift manufacturing footprints, they cannot reverse the fundamental drivers of the energy transition and batteries are still at the forefront.
Resilience in a Time of Change
The battery industry has never been static. Over the last decade, it has faced countless challenges ranging from material shortages to pandemic-era disruptions, and emerged stronger each time. Today, while tariffs on lithium-ion batteries, graphite, and other critical inputs are creating uncertainty for U.S. manufacturers, they’re also driving a rethinking of supply chains that was already underway.
Governments and companies alike have recognized that reliance on a single source of battery materials or components creates vulnerabilities. The Inflation Reduction Act (IRA), with its incentives for localized production, and the Bipartisan Infrastructure Law, with funding for battery research and recycling, have already set the stage for a new battery economy centered in North America. Consequently, tariffs are not the beginning of this shift, but rather are just accelerating it. Furthermore, companies across the U.S., Europe, and Asia are already investing in new gigafactories, localizing supply chains, and fast-tracking next-generation technologies. From Tesla to LG Chem, EV and battery makers alike are aiming to create more balanced, resilient, and sustainable manufacturing ecosystems.
Innovation as an Advantage
From solid-state batteries to silicon to advanced recycling and smart BMS software, what distinguishes the battery industry today is its fast pace of innovation. Indeed, every link in the value chain is being reimagined. Therefore, while tariffs may shift the calculus around where to manufacture or how to source materials, they do not slow the rate of technical and technological progress. If anything, they place a premium on efficiency, quality, and ingenuity. Moreover, OEMs that can deliver better-performing batteries with fewer constraints will gain a competitive edge, and that edge increasingly comes from technology, not just scale.
Policy, Purpose, and Long-Term Vision
While trade policies can be viewed as a source of friction, especially when it introduces volatility or complicates logistics, tariffs alone don’t dictate the future of the battery industry. Across the U.S., Europe, and many parts of Asia, those frameworks are aligned around electrification. In December 2023, the European Union extended the current rules of origin for EVs and batteries under the EU-UK Trade and Cooperation Agreement until the end of 2026. This move postpones the implementation of stricter local content requirements, which were initially set to take effect on January 1, 2024. Without this extension, vehicles not meeting the new thresholds would have faced a 10% tariff. The extension provides manufacturers in both the EU and the UK additional time to adapt their supply chains and increase local battery production. To support this transition, the EU announced up to €3 billion in funding through the Innovation Fund. This financial support aims to bolster the battery manufacturing sector, helping the industry meet the upcoming requirements by 2027.
Similarly, in September 2024, the U.S. Department of Energy unveiled plans to allocate over $3 billion to more than two dozen battery-related projects across 14 states. This funding, sourced from the Bipartisan Infrastructure Law, is designated for activities such as processing critical minerals, constructing battery components, and recycling batteries. Additionally, the U.S. government has updated its electric vehicle tax credit guidelines. Starting in 2024, to qualify for the full $7,500 tax credit, EVs must not contain battery components manufactured or processed by companies from countries considered “Foreign Entities of Concern”.
As such, global investment in battery manufacturing, energy storage, and EV infrastructure continues to break records, despite the potential macroeconomic headwinds. With a clear long-term direction, internal combustion engines (ICE) are continuing to slow down, and clean, electrified transport is taking its place. Therefore, battery makers who align themselves with this long-term vision, who see beyond quarter-to-quarter shifts and remain committed to innovation and resilience, will be the ones who lead. Additionally, as customer demand for performance, sustainability, and cost-effectiveness grows, EV manufacturers that can meet those expectations locally will have a powerful advantage.
The New Order is Electric
With policy changes such as for tariffs, short-term complications in the EV and battery industries can include raw materials becoming more expensive. Furthermore, existing supply relationships may need to be reconsidered. However, responding in a resilient way will determine how the industry proceeds. Indeed, the shift towards stronger, diversified and localised supply chains is a necessary evolution. As new hubs of battery innovation emerge in the U.S., Europe, and beyond, the opportunities for collaboration and co-development are only expanding.
Looking Ahead with Addionics
The battery industry remains central to the global electrification push. While new tariffs may introduce short-term complexities, they also mark a pivotal moment to rethink how and where batteries are made. Localizing supply chains and scaling domestic manufacturing will be essential, and this transition will demand better technology. Addionics’ 3D Current Collectors are uniquely positioned to support this shift by improving performance and cost-effectiveness through increased energy density, cycle life, thermal management and faster charging without requiring a redesign of existing production lines. This drop-in solution is already being integrated by leading industry players. Moreover, Addionics’ 3D Current Collectors’ porous architecture also improves adhesion and structural stability, minimizing degradation over time and supporting long-term durability.
In a landscape defined by change, scalable innovations like Addionics’ 3D Current Collectors allow manufacturers to create a competitive edge, lower costs, and deliver batteries that meet rising performance demands, all while supporting a more sustainable environment. Even with new trade dynamics in play, the momentum toward electrification is not slowing down and those that make batteries smarter, stronger, and more adaptable will continue to lead the way.
Explore Addionics’ technology or contact us for collaboration opportunities.