China battery ban opens U.S. grid to Korean, Japanese makers

U.S. battery storage could quadruple to 1 terawatt-hour by 2032

The widely anticipated transition to electric vehicles has not materialized at the pace the industry predicted, but another transformation is rapidly in progress: battery packs storing power on the U.S. electricity grid. Battery packs can release stored power whenever demand requires and help the grid absorb intermittent sources such as solar and wind. The shift is good news for South Korean and Japanese battery makers, whose U.S. factories built for an EV boom are finding buyers among electric utilities and AI data centers instead.

In late August, President Trump ordered U.S. firms to stop buying or installing power-grid components, including battery storage, from adversaries including China. The order upended a market that Chinese makers had come to dominate over the past decade, after cheaper products won them overwhelming U.S. market share despite Washington’s trade battles with Beijing. A decade ago, battery storage on the grid was virtually nonexistent.

“Energy security is national security,” White House spokeswoman Taylor Rogers said. “President Trump will not allow our bulk-power system to be susceptible to vulnerabilities from foreign entities.” A Chinese government spokesman said Beijing opposed “overstretching the concept of national security to go after foreign enterprises.”

The U.S. Energy Storage Coalition, an industry trade group, says electricity stored in U.S. batteries could reach one terawatt-hour by 2032 — quadruple today’s level and enough to keep Texas, California, Florida and Michigan running at peak power for four hours.

The administration has yet to clarify how the order will be enforced, including whether it would extend to Chinese batteries already on the grid. A White House official said the Energy Department was working on specific guidance.

At a DTE Energy site in Trenton, Mich., workers are installing gray, rectangular steel enclosures roughly the size of standard shipping containers across a stretch of gravel. The boxes house server-style racks lined with thousands of battery packs made by LG Energy Solution, a South Korean company, using a less expensive iron-based chemistry known as LFP. If all the batteries on the site release electricity at once, they can deliver 220 megawatts — enough to power nearly 40,000 homes, according to DTE Energy.

The factories those companies built were initially intended to sell batteries to EV makers; instead, the demand is coming from electric utilities. Many AI data centers are directly incorporating battery-energy-storage systems to handle fluctuations in power demand, using them as a buffer that ensures stable power flow during spikes and can kick in quickly in an emergency.

In September, Nvidia certified LG Energy, Japan’s Hitachi Energy and Tesla as approved suppliers of battery-energy-storage systems for AI data centers. No Chinese firms made the list.

South Korean and Japanese companies have been building dozens of battery factories across the U.S. to claim federal tax credits for domestic battery manufacturing that date to the Biden administration. Among them is an LG Energy joint venture with Hyundai Motor in Georgia that was targeted in an immigration raid last year.

LG Energy produces battery-energy-storage systems in Michigan, Ohio and Tennessee, as well as in Ontario, Canada, and works with Honda in Ohio and General Motors in Tennessee. By the end of this year, it plans to secure more than 60 gigawatts of global production capacity in battery-energy-storage systems, including more than 50 gigawatts in North America, an LG Energy spokeswoman said. She pointed to U.S. policy and “the importance of reshoring manufacturing for strategic industries like batteries.”

In the first half of 2026, LG Energy’s share of the North American energy-storage system market grew to 13.6% from 4.2%, according to battery-market research firm SNE Research, placing it third behind China’s CATL and Hithium. Roughly 95% of LG Energy’s North American shipments were destined for grid-power use, SNE said, and in October the company estimated its third-quarter revenue rose 59% from a year earlier.

Other manufacturers are also seeking to fill the gap left by China. Samsung SDI said Monday it signed an agreement with U.S. energy firm Alpha Omega Power to supply an additional gigawatt-hour of battery energy storage by the end of the year, expanding a deal signed last year; production will take place at its Indiana plant, a joint venture with automaker Stellantis. SK On in August agreed to deliver 9 gigawatts of LFP battery cells over five years to U.S.-based NeoVolta Power, produced at SK On’s plant in Georgia. Japan’s Panasonic has converted part of its EV battery production lines in Kansas to make batteries for AI data centers.

“The Korean battery players, in conjunction with their partners in the American automobile sector, will likely become very significant, if not dominant, players in the U.S. market,” said Milo McBride, who specializes in clean energy and battery geopolitics at the Carnegie Endowment for International Peace, a think tank.