Currents Podcast Summary

Podcast: Currents by Norton Rose Fulbright
Episode: Ep317: Tariffs and the Future of Battery Storage
Date: September 25, 2025
Host: Todd Alexander
Guest: Dan Finfoli, Director of Energy Storage Market Intelligence, Clean Energy Associates (CEA)

Overview

This episode explores the impact of tariffs and trade policy on the U.S. battery storage market, drawing on findings from two new CEA reports. Todd Alexander and Dan Finfoli engage in a nuanced discussion about supply chain shifts, price pressures, competitive dynamics, and the long-term implications for both lithium-ion and alternative storage technologies. The episode is particularly focused on how recent and pending tariffs—especially those targeting China—have shaped project economics and market structure in the U.S.

Key Discussion Points and Insights

1. Tariffs and Their Impact on Battery Storage Costs

[00:28–02:40]

• Tariffs have dramatically increased costs: Most U.S. stationary storage batteries are imported from China, so tariffs specifically targeting Chinese batteries add significant costs to lithium-ion battery storage systems.
  • “In a word, dramatically would be the first element here.” (Dan Finfoli, 01:02)
• Market adapts despite cost headwinds: Price drops from battery technology advances over the last decade have counteracted some tariff impacts, but overall, tariffs have essentially set U.S. project costs back by about two years.
  • “A full containerized system that you got last quarter in Q2 2025, about as expensive as it was in Q2 2023...about two years back on the price decline curve due to tariffs alone.” (Dan, 02:24)

2. Competitive Position of the U.S. vs. the World

[02:40–04:06]

• U.S. is now far less competitive: Tariffs and duties make U.S. deployments 50-60% more expensive than in Europe and other OECD countries. As a result, growth has surged in lower-tariff markets like the EU, further widening the gap.
  • “For building something within the United States right now, due to tariffs and duties, you can be looking at anything from 50 to 60% more expensive than it would be in other countries.” (Dan, 03:14)

3. Measuring the Impact of Tariffs on U.S. Energy Storage Growth

[04:06–08:40]

• Difficult to measure exact impact: Policy volatility (e.g., shifting tariff schedules) has created “a situation of massive flux.” Developers have accelerated imports ahead of tariff deadlines, creating a backlog that may temporarily mute the effects.
  • “The impact right now is still nebulous...the trade policy right now is still very much in flux.” (Dan, 05:04)
• Potential “floor” on the market: If Chinese supply vanished due to policy, there’d be an estimated 40% shortfall in U.S. lithium-ion supply, but the real effect may be closer to a 10–20% reduction, temporarily softened by stockpiling and backlog imports.
• Shift to domestic production: Korean and domestic battery makers are starting to shift automotive battery plants to storage use as EV credits fall away.

4. Supply Chain Strategies and Alternatives to China

[08:40–13:08]

• Korea and domestic production are alternatives but limited in scale: There is growing parity between Chinese and Korean imports, with Korea’s share now nearly matching China’s in some months. The EU and Southeast Asia are also in focus, but scale and cost challenges persist.
  • “Import data indicates that imports from China for battery storage systems were at a monthly low...and South Korean imports were at 6,000, so almost at the equivalent level of China.” (Dan, 09:53)
• Foreign Entity of Concern (FEOC) restrictions add complexity: U.S. procurement is getting squeezed between tariffs and eligibility for investment tax credits, but “energy storage was a bit lucky,” spared the harshest restrictions from recent legislation.
  • “Purchasing from ownership from intellectual property from these foreign entities of concern, still working to see just what the impacts of that are going to be.” (Dan, 12:08)

5. Who Absorbs Tariff Costs?

[13:08–16:45]

• Uncertainty on cost pass-through: Many deals are on hold until there’s clarity, but very price-competitive market has led suppliers—even vertically integrated giants—to absorb some pressure rather than immediately pass full tariff increases onto customers.
  • “There really isn't even that much anecdotal evidence yet about just how much of the tariffs are being passed through.” (Dan, 14:19)
• Margin compression has limits: European prices as low as $60/kWh are cited; it’s unclear how much lower these can go, and bigger buyers may have more negotiating power to absorb or deflect cost increases.

6. Supplier Stability and Market Consolidation

[16:45–18:39]

• No immediate credit risk, possible consolidation: No current panic over supplier financial health, but smaller, less competitive companies may merge or exit. Trusted suppliers are increasing in number.
  • “The more likely option is going to be consolidation...but in terms of credit worthiness, I don't think that we're at that point yet.” (Dan, 17:41)

7. Technology Trends and the Five-Year Outlook

[18:39–23:21]

• Lithium-ion will stay dominant: Incremental technical improvements (energy density, better containers, AC-coupled systems) could yield another 10–15% price slip over five years, but tariffs likely offset this.
• Alternate chemistries remain “perpetually five years out”: Long-duration technologies (iron-air, flow, sodium-ion, mechanical, etc.) are not ready to compete at scale due to costs and limited demand for extremely long-duration storage.
  • “Unfortunately, there just isn't much of a need for those durations yet. That need is emerging over the next 10 years, 20 years.” (Dan, 21:41)
• Renewables integration: As grids get more renewable-heavy, the need for longer-duration storage will grow, but for now, lithium-ion (especially LFP) remains the most competitive for most applications.

8. Future of Domestic Manufacturing

[23:21–25:58]

• Imminent shift toward U.S.-made batteries: Finfoli projects that within three years, over 50%—potentially as much as 75-80%—of U.S. storage demand will be met domestically, as former EV battery plants shift to stationary storage production due to declining EV tax credits and weaker EV demand.
  • “Three years from now, I think we're going to be above 50%, I think it's probably going to be closer to 75 or 80%.” (Dan, 23:44)
• Conversion of factories & policy incentives: It’s much cheaper to convert an EV battery plant to storage production than to build new capacity.

Notable Quotes & Memorable Moments

• On the impact of tariffs:

  “A full containerized system that you got last quarter in Q2 2025, about as expensive as it was in Q2 2023...about two years back on the price decline curve due to tariffs alone.”
  — Dan Finfoli [02:24]

• On competitive pricing:

  “For building something within the United States right now, due to tariffs and duties, you can be looking at anything from 50 to 60% more expensive than it would be in other countries.”
  — Dan Finfoli [03:14]

• On supply chain alternatives:

  “Import data indicates that imports from China for battery storage systems were at a monthly low...and South Korean imports were at 6,000, so almost at the equivalent level of China.”
  — Dan Finfoli [09:53]

• On waiting for clarity before major deals:

  “There really isn't even that much anecdotal evidence yet about just how much of the tariffs are being passed through.”
  — Dan Finfoli [14:19]

• On future domestic production share:

  “Three years from now, I think we're going to be above 50%, I think it's probably going to be closer to 75 or 80%.”
  — Dan Finfoli [23:44]

Timestamps for Important Segments

• Tariff impact and price rollback: [01:02–02:40]
• Comparison of U.S. to other regions: [02:40–04:06]
• Estimating market impact and backlog effect: [04:06–08:40]
• Supply chain alternatives and FEOC complexities: [08:40–13:08]
• Pass-through of tariff costs: [13:08–16:45]
• Supplier financial health and market consolidation: [16:45–18:39]
• Tech innovation and long-duration storage prospects: [18:39–23:21]
• Projection for U.S. domestic production: [23:21–25:58]

Tone

Dan Finfoli offers a candid, analytic view—tempered optimism about domestic manufacturing amid uncertainty, recurring references to policy volatility, and clear, accessible explanations of complex market dynamics. Todd Alexander’s questions are pragmatic, focused on clarifying implications for developers, financiers, and stakeholders in the U.S. energy storage sector.

This summary is designed for listeners and industry professionals seeking an in-depth, actionable understanding of today’s battery storage market challenges and opportunities—without wading through policy jargon or technical minutiae.