U.S. Department of Homeland Security analysts shared an internal report with local agencies in August, warning them about the economic risks of using Chinese utility storage batteries. It warns that dependence on Chinese batteries could harm the development of a secure supply chain in the United States.
The document, first obtained by national security transparency nonprofit Property of the People and seen by WIRED, accuses Chinese companies of “using state support from the People’s Republic of China to quickly and to the emerging US utility battery energy storage industry and create dependencies in the Chinese supply chain,” and calls for reporting any suspicious activity.
Specifically, the report alleges 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 have done so.” leveraged for new commercial strategies to gain share in the US market.”
Currently, CATL and BYD lead the global energy storage battery market by far, with 40 percent and 12 percent market sharesrespectively, according to South Korean energy research firm SNE Research. Eight of the top 10 companies in the sector are from China, so there are few alternatives to turn to when building network storage.
The report says it builds on previous papers that looked at the “use of non-competitive tactics by state-backed companies in battery and electric vehicle supply chains.” DHS did not respond to a request for further comment.
In 2022, CATL signed 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 have also been used by Duke Energy, a North Carolina-based utility, although the latter Eliminated CATL as a provider of electricity storage at marine bases. after, in part, Washington lawmakers raised concerns about national security.
In an emailed statement, CATL spokesperson Fred Zhang rejects the categorization that the company has relied on state support to gain an advantage. “CATL has achieved tremendous growth through continuous innovation, forward-thinking strategic planning and a commitment to high-quality products at a reasonable cost,” the statement said.
BYD and REPT did not respond to WIRED’s request for comment.
Following efforts to curb the competitiveness of Chinese electric vehicle companies, the US government is now also concerned about how domestic utilities could become too reliant on Chinese batteries for energy storage.