But in trying to return manufacturing to the United States through tariffs, the Administration may be confusing a symptom with the disease.  The disease is not a lack of manufacturing in the United States.  The disease is that the United States is underinvesting in manufacturing infrastructure.  That underinvestment has led to the symptom of a declining manufacturing sector in general and to the lack of advanced battery manufacturing in the United States in particular.

Advanced battery manufacturing will not take place in the United States just because we want it to or because the government imposes a tariff on importers.  Manufacturing will only take place if investors fund the construction of new battery manufacturing plants and related supply chain infrastructure.  Today, building a Gigafactory requires about a billion dollars of investment, two to three years of construction, and at least 10 years of profitable operation in order for investors to get a favorable return on their investment.

Unless an investor can see a pathway to profitability for that Gigafactory over time, no investment will be made, no factory will be built, and no manufacturing will return to America.

Tariffs can in theory help investors see that pathway to profitability by protecting a Gigafactory project from low-price foreign competition.  But for tariffs to be effective in promoting investment, they need to be “sticky”.  In other words, investors need to have confidence that the tariff regime will remain in place during the entire period that the project needs to operate in order to produce a favorable return on investment.

President Trump’s problem is that while he can impose tariffs at will, he cannot make them stick.  Investors know this.  Given that major portions of the business community, Wall Street, a large majority of Democrats, and a significant number of Republicans oppose the Trump tariffs, the best that President Trump can do is hold his tariff regime in place for four years.  Four years is just not enough time to support the financing of a new battery Gigafactory, or probably any factory that manufactures advanced technology or heavy industry products.

The Trump Administration needs to start over.  Before imposing a tariff regime, it needs to build a political consensus in favor of the kind of tariffs the President wants to impose.  Only if the tariffs have broad political backing will investors trust that they can survive long enough to benefit their investments.

Building a political consensus supporting tariffs means reaching out to the business community, to Wall Street and even to Democrats to sell the potential benefits of the Trump tariff program.  This needs to be done before that program is enacted, not after.  If President Trump is unable or unwilling to build such a consensus, his tariff regime will fail in its intended purpose.  Unpopular tariffs might raise a few dollars for the federal government in the short term.  But they will not return manufacturing investment or manufacturing itself to America.

The positive reactions to the meeting contrasted with uncertainty about the state of the industry as a whole.  No one really knows what is going on in Washington, D.C.  It appears that the Trump Administration has not yet taken a position, favorably or unfavorably, on advanced battery technology.  During a first 100 days filled with chaos and radical change, the fact that no one in the Administration seems to be paying attention to batteries may well be a good thing.

Yet while the chaos and radical change in Washington grabs headlines, the presentations made by speakers and NAATBatt member firms during the NAATBatt 2025 meeting underline the fact that Washington is a side show.  Technological advances will determine whether the manufacture of advanced battery technology in North America will be commercially successful, not government policy.  And those advances keep coming.  A session on AI in the battery industry made some interesting predictions about where the most important technology advances are likely to occur in the battery space.

The “What Would a Moonshot in Advanced Batteries Look Like” panel focused less on new technology and more on the importance and challenges of reducing cost.  A culture of innovation is the key advantage of  North American advanced battery makers.  But commercializing that innovation will remain challenging as long as oversupply in China keeps prices artificially and unsustainably low in North America.  Panel members Stan Whittingham, Craig Rigby, Joern Tinnemeyer and David Howell agreed upon the centrality of this problem, but could not agree on a solution.

The best part of NAATBatt 2025, as always, was the Member Update Presentations.  This year, 170-member companies signed up to give presentations.  Collectively those presentations provided a better understanding of who is working on what in the North American advanced battery market than any study or report.  The presentations as a whole were as inspiring as they were impressive.

2025 will likely see continued technological progress in advanced batteries and, hopefully, greater certainty about federal government policy supporting it.  NAATBatt looks forward to reviewing that progress and that certainty at its 18^th annual meeting, NAATBatt 2026, on February 9-12, 2026, at the JW Marriott Starr Pass hotel in Tucson, Arizona.

First is that advanced batteries and electric vehicles are not the product of government policy.  They are the product of fundamental changes in energy and automotive technologies that will continue regardless of political leadership.  Government policy cannot affect the existence of this change (though it can affect its pace).  Politics will not prevent the adoption of a superior technology by U.S. businesses and consumers.  As long as we in industry keep our eye on the ball, no change in government policy will cripple our industry.  And the ball is: better, cheaper, faster.

Second, there is a difference between politics and policy.  Modern EV’s, which are still a new and relatively expensive technology, make a great punching bag for a political coalition marketing itself to hard-pressed blue-collar workers.  My guess is that Henry Ford took political heat in the early 20^th Century from politicians representing the vast majority of U.S. voters, who could not yet afford his products.  But Henry Ford got his costs down and ended up doing just fine.

Third, a new approach to some of the challenges of the advanced battery industry in the United States might prove refreshing, and perhaps even beneficial.  Everyone who runs a business appreciates the prime importance of efficiency.  A new focus on efficiency could be beneficial to all good businesses in our industry.

Focusing on the fundamental needs of business in the battery industry could be even more beneficial.  As I have long observed, every business has two problems: a balance sheet problem and an income statement problem.  Over the last four years the federal government has provided necessary and invaluable assistance to many of our members in solving their balance sheet problem.  If the next Administration chooses to focus more on the income statement problem, our industry could benefit as well.

Finally, China.  I have written previously in this blog that we need a new approach to China.  What that approach needs to be and what issues that approach needs to cover go well beyond batteries.  While I will not weigh in on the wisdom of across the board tariffs on everything made in China (and everywhere else), it strikes me that a deal needs to be cut with the Chinese.   Because of the peculiarities of U.S. politics, it needed to be Nixon who went to China.  McGovern could never have done it.  So let’s see what happens in 2025.

I do not wish to discount the apprehension in our industry or to be overly Pollyannaish.  The advanced battery industry received unprecedented moral and financial support over the last four years, which it badly needed.  It may be that we will not have that level of support over the next two to four years.  But the future is far from bleak.  We have a strong technology wind at our back.  The best days of the advanced battery, EV and renewable energy industries lay before us, not behind.  Let’s just keep charging ahead.

Three things loom large at NAATBatt in 2021.  First is a study of the North American supply chain for lithium-ion battery technology.  Three NAATBatt committees–the North American Manufacturing Committee, the Markets Committee and the Battery Recycling Committee–have already completed maps of the business segments within their areas of focus.  A committee of NAATBatt leadership is in the process of consolidating those maps and creating a final list of the business segments within the lithium-ion battery supply chain to be studied.

The goal of the supply chain project is to create a list of every major business segment and process that is involved in the manufacture of lithium-ion battery cell and packs.  NAATBatt will then identify every company doing business in each such segment in North America.  The goal is to create a dynamic database that will highlight resources and business opportunities within that supply chain for NAATBatt members.  The map should also identify to the U.S. and Canadian government officials the holes in the North American lithium-ion supply chain that government support might help fill.

A preliminary list of business segments should be completed within the next two weeks and will be circulated to the three participating committees for comment.  NAATBatt intends thereafter to open a solicitation for a third-party consultant to research and fill in information about all companies active in each business segment in North America.

NAATBatt’s second major project for 2021 just kicked off this week.  NAATBatt’s Education Committee has started its own mapping project.  The Education Committee will map the job categories that are likely to be impacted by the electrification of transportation and the installation of stationary energy storage.  The goal of the project is to identify the job training needs of the North American workforce as the electrification of the 21^st Century economy continues and accelerates.

I would encourage all NAATBatt members to pitch in and help out with the electrification job training project.  One of the greatest barriers to energy storage and electric vehicle deployment in North America may be the lack of properly trained technicians.  Industry is uniquely positioned to identifying who those technicians will be and what skills they will need.  NAATBatt’s hope is that its electrification job training project will address a possible supply constraint for our members and help governments more effectively focus job training dollars.

Third and finally, NAATBatt looks forward to getting back together again in person in the hopefully soon-to-come post-Covid era.  NAATBatt is busy planning its NAATBatt 2021 meeting next February, which will necessarily be on-line only.  A virtual meeting will not be the disaster NAATBatt feared that it would be when Covid first broke out early last year.  The substantive content will be largely the same, maybe even better than past in person meetings.  If you have not yet registered to attend NAATBatt 2021, please do so by clicking here.

But virtual meetings are no substitute for in-person meetings.  The need for camaraderie and for the long, detailed conversations that usually follow in speaker presentations is an itch that virtual meetings just can’t scratch.  NAATBatt looks forward to scratching that itch again in the second half of 2021.  Keep an eye on our newsletter for announcement concerning our next in-person events.  Hopefully you will not have to keep looking too long.

For me, the most noteworthy content was not the technical detail of where Tesla is going with its battery technology.  The move to tabless 4860 cells, more silicon, less cobalt, away from solid state technology (apparently), and the road map to a 56% reduction in battery costs were all very interesting topics, if not entirely novel.

For me the most interesting take-away from Battery Day was that Tesla now apparently sees itself as a battery company rather than a car company.  Car sales may drive its revenue growth.  But Tesla recognizes that reducing battery costs is the key to increasing vehicle-driven revenue growth and that efficiently manufacturing of battery cells at very large scale is the key to reducing battery costs.

This, of course, is what NAATBatt has been saying for 10 years.  He who makes the batteries will one day make the cars.

The big news about Tesla from Battery Day is that, having recognized efficient battery cell manufacturing as the principal challenge of its business, Tesla has decided to address that challenge directly and manufacture battery cells itself.  This decision stands in contrast to so many of its automotive OEM competitors, who, seeing the same fundamental challenge to their businesses, have elected to outsource the problem to third party contractors.

Lithium-ion battery cells will be one of the most important technologies of the 21^st Century.  Batteries will power the myriad of devices that run on electric energy unattached to the grid.  Those devices are what will make the 21^st Century fundamentally different than the 20^th Century.  The spin off opportunities and supply chain linkages that lithium-ion battery manufacturing will provide make it no less strategic from the standpoint of economic development than AI or 5G.  Companies and countries that do not to compete in lithium-ion battery cell manufacturing will miss huge opportunities for job and wealth creation in the coming century.

The challenge that Tesla has decided to undertake in manufacturing lithium-ion batteries at scale is daunting.  Success is in no way guaranteed.  Tesla’s core competence is not electrochemistry.  It is unclear how much know-how Tesla has actually acquired from Panasonic since it started manufacturing battery cells at the Nevada Gigafactory in 2016.  Manufacturing lithium-ion battery cells at mass scale is an extraordinarily complex business.  But Tesla can take some comfort from the fact that CATL in China went effectively from nothing to being the largest lithium-ion battery company in the world in little more than five years.

NAATBatt has been calling for years for the creation of lithium-ion battery manufacturing champions in North America.  Domestic champions are critical to the development of a robust domestic supply chain for lithium-ion technology.  They are also critical to the continued support of lithium-ion R&D in the United States, a traditional strength of the American research institutions that may be waning.

The question is whether Tesla is up to the challenge of being a national champion.  To date Tesla has been extraordinarily successful in moving its stock price to eye-popping levels.  It has mastered the game of being a Silicon Valley start-up.  If that is its only goal, it may continue to know that kind of success for a while.

I hope that Tesla’s ambitions, and Elon Musk’s vision of his legacy, are bigger than that.  North America needs a champion in lithium-ion technology.  It needs a champion that can help create jobs and economic opportunities at the hundreds of other companies that will be benefit if lithium-ion battery manufacturing can find a vibrant home in North America.  This no small thing.

To become the lithium-ion battery manufacturing technology champion of North America, Tesla need to step up from being an introverted start-up and focus on a larger social and economic development role.  This would be a change but not a novel transition for a successful, industry-leading business.  Companies such as General Motors and McDonalds did the same sort of thing during the 20^th Century.  It will be interesting to see whether Tesla has the appetite to do the same.

Today lithium-ion batteries reaching the end of their useful lives are not being recycled in any significant quantities in North America.  The cost of transporting those used batteries to recycling facilities, and of recycling facilities processing those batteries, exceeds in almost all cases the profit that any recycler can expect to make from processing those batteries.

The economic barrier to lithium-ion battery recycling is destine to become a serious problem when, in a few short years, the batteries in first generation electric vehicles and stationary energy storage project start reaching the end of their useful lives.  Consigning those batteries to landfills will be environmentally unacceptable and mandatory recycling programs that several states are already threatening to impose will create a costly surprise for consumers.  There must be a better way.

The workshop this week was a first step towards identifying a better way.  The workshop saw presentations by the top experts in the field on the subjects of battery collection, sorting and identification, transportation and storage, and recycling technology.  Copies of those presentations are now available on line to all registered attendees of the workshop and all NAATBatt members.

Most gratifying for the workshop organizers was that we had low expectations as to how many people would show up in Buffalo to hear about an arcane problem unlikely to become critical for several years.  We planned for about 40.  140 showed up.  Our apologies to the Buffalo fire department for packing them all in.

If you attended, spoke at or sponsored the workshop, thanks for your participation and support.  Photos from the workshop will be available on the NAATBatt website next week.