U.S. Department of Homeland Security analysts released internal reports to local agencies in August, warning them of the economic risks of using Chinese utility batteries. It warns that dependence on Chinese batteries could harm the development of a secure U.S. supply chain.
The document, first obtained by the national security transparency nonprofit Property of the People and viewed by WIRED, accuses Chinese companies of “using the People’s Republic of China’s state support to quickly and cheaply enter the emerging U.S. utility battery energy storage industry and creating supply chain dependence on China” and asks people to report any suspicious activity.
The report indicated in particular that three companies – Contemporary Amperex Technology Co. Limited (CATL), Build Your Dreams (BYD) and Ruipu Energy Co. Ltd. (REPT) – “have benefited from various forms of state support and used them to further business strategies aimed at gaining share in the American market.”
Currently, CATL and BYD are clearly leaders in the global energy storage battery market, including: 40% and 12% market sharesrespectively, according to South Korean research firm SNE Research. Eight out of the top 10 companies in the industry are from China, so there are few alternatives to turn to when building networked warehouses.
The report said it builds on previous documents that examined Chinese “state-backed enterprises’ utilize of uncompetitive tactics in electric vehicle and battery supply chains.” DHS did not respond to a request for further comment.
In 2022, CATL entered into an agreement with Primergy Solar to build the largest U.S. solar and storage project in Nevada, which came online this year. Its battery products were also used by Duke Energy, a North Carolina-based utility, although the latter discontinued CATL as a provider of offshore electricity storage after lawmakers in Washington expressed concerns in part about national security.
In an emailed statement, Fred Zhang, a spokesman for CATL, rejects the categorization that the company is relying on state support to gain an advantage. “CATL has achieved tremendous growth through continuous innovation, forward-looking strategic planning and a commitment to high-quality products at a reasonable price,” the statement said.
BYD and REPT did not respond to WIRED’s request for comment.
Following efforts to limit the competitiveness of Chinese electric vehicle companies, the U.S. government is now concerned about how the country’s utilities may become too dependent on Chinese batteries for energy storage.