US battery oversupply offers an opportunity to expand into new markets, counter Chinese dominance, and secure long-term energy competitiveness.
The world continues to ramp up production of electric vehicles (EVs) and related infrastructure, shipping over 3.2 million EVs globally in 2024. China comprised 40 percent of these exports, dominating the global market. The United States, which imposed an effective 100 percent tariff on Chinese electric vehicles in May 2024, remained a net importer of EVs, largely from Mexico through US original equipment manufacturers (OEMs). The United States’ main export market was Canada. Considering the substantial changes made so far in 2025 by the Trump administration, from raising tariffs on Canada and Mexico to the removal of EV tax credits, which incentivized domestic production, the calculus for a US strategic economic outlook has undergone a drastic transformation. Additionally, the United States is engaged, both rhetorically and practically, in an economic competition with China regarding global market control and influence, although it does not have to be this way.
US-China Competition
As the two economies have, each in its own way, sought to gain a competitive edge over global supply chains, the United States currently lags in its efforts to engage in the growing EV and battery sector. China has made significant advancements in offshoring some of its manufacturing, securing domestic footholds in both India and Europe. This was likely the context of a reported deal between Chinese Hithium Energy Co, one of the world’s biggest stationary battery manufacturers, in which the Chinese government is invested, and India’s largest company, Reliance Industries. This deal would see the export of key Chinese tech to India, where Chinese batteries would be produced in the first indication of a technology transfer between China and another global economic power.
Trump’s Energy-Focused Trade Strategy
The Trump administration has sought to compete in its own way by negotiating successful energy deals for oil and liquefied natural gas (LNG). For example, the European Union (EU) agreed to purchase over $750 billion of LNG over the course of three years, and the United States has accepted the purchase of US oil as a concession to tariffs in numerous bilateral agreements coming in the aftermath of Trump’s Liberation Day. These deals mask the serious vulnerabilities of US global energy exports, failing to account for fundamentally changing supply chains and consumer demand.
Furthermore, many US manufacturers who were expanding capacity domestically have now cancelled their plans for new factories, due to the changes in market incentives. Battery manufacturers and lithium suppliers have been left with even greater uncertainty as downstream market effects have yet to materialize. Bloomberg recently reported that the United States is at risk of battery oversupply as purchases and production of EVs decline. Interestingly, this can be contrasted with China’s oversupply of solar panels.
China’s Renewable Energy Expansion
China’s role in global energy market competition has been advantaged not only by EV sales, but also by its success in solar panel manufacturing. Oversupply has led Chinese companies to find new markets in key developing regions, particularly in Africa. In fact, solar panel imports to Africa have nearly tripled in the last three years, with an increase of Chinese imports of 60 percent in only the last twelve months. Africa still relies heavily on imports of oil and natural gas; however, the huge growth in the installation of alternative energy generation shows the beginning of a permanent change. Chinese solar panel exports will undermine the United States’ energy-dominant exports, oil and natural gas, in the long run. As the United States seeks to expand its energy exports, particularly to countries like South Africa, which now faces 30 percent tariff rates, it may jeopardize the long-term sustainability of its export market.
US battery manufacturers, however, could learn from Chinese solar panel companies by finding new export markets. If the United States were to utilize its battery production and expand to exports, it could avoid permanent loss in its trade war with China. US battery inventories will need markets as EV sales decline in the United States. Considering that African countries are already transitioning to greater solar panel usage, those markets will need greater battery storage capacity. As China has already done in Africa, the United States could competitively enter alternative markets, supplying long-term and high-capacity energy storage units. In other words, the United States could use its oversupply of batteries to secure markets with untapped potential that will need battery capacity in the long run. While oil exports are expected to eventually decline, the United States can substitute the loss in oil demand with the increase in demand for energy storage.
Path Forward for US Energy Competition
This crucial strategic step could be a game-changer for US energy competition with China. Trump’s policies have led to uncertainty about the viability of manufacturing growth for the domestic battery and EV sectors. Nonetheless, an oversupply of batteries could be the key to successfully securing foreign export markets, leveling the playing field for the US in its competitive economic balancing efforts with China. US manufacturing has further struggled to meet the demands of the Trump administration by cutting its dependency on Chinese-made goods. A change in strategy with regard to batteries could be one method for meeting Trump’s agenda while still expanding growth.
About the Author: Sebastian Borell
Sebastian Borell is a renewable energy analyst based in Europe working in the investment banking sector. With over 5 years in the industry, Sebastian has contributed to reports from the Energy Institute, RenewableUK, and Wood Mackenzie, among others. He holds an MA from the University of Hagen.
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