Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Climate Tech

Even Domestic Battery Makers Are Feeling the Pain of Trump’s Tariffs

Bay Area battery maker Lyten sources 80% of its components in the U.S. But its ability to scale still depends on trade.

Lyten headquarters.
Heatmap Illustration/Lyten, Getty Images

China dominates the lithium-ion battery supply chain at nearly every level, from critical minerals processing and refining to cell manufacturing and battery pack assembly. So now that the nation faces a cumulative 54% tariff rate, one might think domestic battery manufacturers in the United States — especially those exploring lithium-ion alternatives — would be celebrating their good fortune.

But the actual picture is markedly more mixed. Take Bay Area-based lithium-sulfur battery producer Lyten. On the one hand, Lyten is particularly well positioned to take advantage of the administration’s focus on building out U.S. supply chains. The company has been around since 2015, and last year snatched up a shuttered 200-megawatt factory from Northvolt after the Swedish battery giant declared bankruptcy.

Lyten aims to use entirely domestic inputs in its battery — a goal it’s been chasing since well before Wednesday’s tariff announcement. It currently sources “well over 80%” of its core components domestically, which is largely possible because its lithium-sulfur battery chemistry doesn’t require critical minerals such as nickel, manganese, cobalt, or graphite, which are mined globally and almost always refined in China. Sulfur, Lyten’s key cathode material, is cheap and abundant in the U.S. The company has ambitious plans to start producing at the old Northvolt facility this year, and is planning a much larger gigafactory in Reno, Nevada for 2027.

But Lyten’s plans for scale will depend on its ability to source affordable construction materials. The company’s timeline hasn’t changed for now, but Trump’s tariffs have introduced a big new question mark into its future operations. “We're not drawing any conclusions quite yet,” Lyten’s Chief Sustainability Officer Keith Norman told me.

As Norman emphasized, Lyten is fundamentally “a hard tech company that needs to build a lot of infrastructure” in order to scale, and tariffs could make that a much more expensive proposition. “The building of physical factories, those materials, the infrastructure to do that, the equipment to do that, a lot of that is coming through international trade,” Norman told me.

“The reality is the energy transition is a manufacturing transition,” Norman told me. “There’s nothing in the energy transition that doesn’t require pretty significant investments in manufacturing and build out.” Therefore, tariffs that hit construction materials and equipment will put emergent domestic energy companies — climate friendly or not — at risk of a slowdown. “And so I think that’s the real question — are there ways to build a managed tariff strategy that creates that opening for accelerating U.S. manufacturing?” Norman questioned.

Import duties of 25% on steel and aluminum went into effect in March, so while these building materials are exempt from the sweeping tariffs announced on Wednesday, those additional costs are already shaking out through the economy. There were also plenty of other building materials that were not exempt, such as cement and drywall. What’s more, according to the consultancy Off-Highway Research, which provided its data to Construction Briefing, the tariffs are expected to add about $4.2 billion to the cost of imported construction equipment — think things like bulldozers, cranes, and dump trucks. Costs for HVAC systems, plumbing, and electrical equipment are also set to rise.

For his part, Norman is more worried about the impact of Trump’s tariffs on the EV market than the stationary energy storage market. The electric vehicle industry is still trying to figure out how to move beyond early adopters to achieve mass market success, he told me, a process that tariffs could seriously hamper as they raise the price of innumerable EV components. Battery storage, on the other hand, is already seeing “gangbusters growth,” as Norman put it. So while tariffs will almost certainly make energy storage systems — largely dominated by lithium-ion batteries — more expensive, “In general, we expect that market to continue to grow incredibly rapidly, partially on the backs of the fact that power demand is growing rapidly,” he told me.

Lyten sees itself as a part of that rapid growth. In theory, lithium-sulfur batteries could achieve a greater energy density than standard lithium-ion, though problems with conductivity and cycle life remain. So while Lyten ultimately wants to produce batteries for use in electric vehicles and energy storage systems that are cheaper and more efficient than the industry standard, earlier applications could include use in drones, satellites, and two- and three-wheelers, which don’t have as high performance requirements.

Norman thinks he’s set up the company to survive tough times, if not precisely a global trade war. “Bringing a new battery chemistry to market, we told ourselves we need to be able to survive two major market downturns,” Norman said. “And so we’ve designed the company, the cap structure, our funding strategy, all around being ready for things like this.”

Editor’s note: This piece has been updated to correct Norman’s title.

Green

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Politics

Trump to Axe All 7 Hydrogen Hubs, Bucking Bipartisan Law

A new list of Department of Energy grants slated for termination will hit clean energy and oil majors alike, including Exxon and Chevron.

Flags.
Heatmap Illustration/Getty Images

A new list of Department of Energy grants slated for termination obtained by Heatmap reveals an additional 338 awards for clean energy projects that the agency intends to cancel. Combined with the 321 grants the agency said it was terminating last week, the total value is nearly $24 billion.

While last week’s announcement mostly targeted companies and institutions located in Democratic states, the new list appears to be indiscriminate. Conrad Schneider, the senior U.S. director at Clean Air Task Force, told me in a statement that the move “will have far-reaching consequences — with virtually no region unscathed.”

Keep reading...Show less
Politics

Trump’s DOE Moves to Cancel Direct Air Capture Hubs in Texas, Louisiana

A new list of grant cancellations obtained by Heatmap includes Climeworks and Heirloom projects funded by 2021 infrastructure law.

DAC installation.
Heatmap Illustration/Climeworks, Getty Images

Trump’s Department of Energy is planning to terminate awards for the two major Direct Air Capture Hubs funded by the Bipartisan Infrastructure Law in Louisiana and Texas, Heatmap has learned.

An internal agency project list shared with Heatmap names nearly $24 billion worth of grants with their status designated as “terminated,” including the Occidental Petroleum’s South Texas DAC Hub as well as Project Cypress, a joint venture between DAC startups Heirloom and Climeworks.

Keep reading...Show less
AM Briefing

Solar Shines

On Trump’s metal nationalization spree, Tesla’s big pitch, and fusion’s challenges

Solar installation.
Heatmap Illustration/Getty Images

Current conditions: King tides are raising ocean levels near Charleston, South Carolina, as much as eight feet above low water averages • A blizzard on Mount Everest has trapped hundreds of hikers and killed at least one • A depression that could form into Tropical Storm Jerry is strengthening in the Atlantic as it barrels northward with an unclear path.


Keep reading...Show less
Blue