In August, analysts at the US Department of Homeland Security issued an internal report warning local agencies about the economic risks associated with relying on Chinese lithium batteries for utility storage. The report expresses concerns about how the dependence on Chinese battery manufacturers could impair the development of a secure US supply chain.

This document, procured by the national security transparency nonprofit Property of the People and reviewed by WIRED, criticizes Chinese firms for allegedly exploiting state support to penetrate the US utility battery energy storage sector. The report highlights that this could lead to supply chain dependencies that are unfavorable to US interests. Agencies were advised to report any suspicious activities related to this dependency.

Key Chinese Players

The report specifically names three Chinese companies: Contemporary Amperex Technology Co. Limited (CATL), Build Your Dreams (BYD), and Ruipu Energy Co. Ltd. (REPT). These firms are accused of leveraging state support to consolidate their market share in the US.

Presently, CATL holds a significant 40% of the global energy storage battery market, followed by BYD with a 12% share, according to South Korean energy research firm SNE Research. Among the top ten companies in this industry, eight are based in China, limiting alternatives for building grid storage systems elsewhere.

Concerns and Reactions

The concerns of state-supported noncompetitive tactics by Chinese firms extend previous analyses documented within various US agencies. Although the Department of Homeland Security did not provide additional comments, their stance underscores ongoing fears about Chinese influence in crucial sectors.

Recently, CATL partnered with Primergy Solar to advance the largest US solar and storage project in Nevada, which became operational this year. CATL's batteries had also seen application with Duke Energy in North Carolina; however, Duke Energy terminated their supply relationship following national security alarms raised by US lawmakers.

In response, Fred Zhang, a spokesperson for CATL, defends the company, attributing its growth to innovation, strategic planning, and high-quality affordable products rather than state support.

BYD and REPT, however, did not respond to requests for comment from WIRED. The US government continues its scrutiny of Chinese companies to safeguard against excessive dependence on foreign batteries in the domestic utility sector.

For further details, the original article can be accessed here, published by WIRED.