On April 2nd, since the introduction of Trump's tariff reciprocity policy, it triggered a global tariff tsunami.

This is regarded as the third trade "war" launched by the United States in its history, affecting not only commodity trade but also global markets in finance, capital, and even technology. And among them, the electric vehicle industry chain is a key link.

The tariff hostility towards the electric vehicle industry chain is not only due to the layered tariff barriers imposed since the Biden administration, but also because the Trump administration intends to slow down electrification and embrace fossil fuels, further suppressing domestic demand for electrification.

According to Trump's latest tariff policy, a 25% tariff has already taken effect on cars, engines, transmissions, and lithium batteries.

According to statistics, the basic tariff for lithium batteries and energy storage systems is 3.4%+301 clause tariff (energy storage batteries will increase to 25% by 2026)+double 10% combined tariff+34% equivalent tariff. The short-term tariff for power batteries will reach 73.4%, and the short-term tariff for energy storage batteries will reach 64.9%; In terms of new energy vehicles, the overall tariff has increased to 147.5% due to the combination of tariffs.

Gaogong Lithium Battery previously analyzed that under the impact of tariff policies, it will further flatten the competitive advantage of domestic battery manufacturers exporting lithium battery products to the United States. In addition, the United States' widespread high reciprocal tariff policy towards Southeast Asian countries has also blocked domestic transit channels that rely on third-party countries.

In this situation, a new round of tariff trade war will also have different impacts on various links in the upstream and downstream of lithium batteries.

How does tariff policy affect the battery industry chain?

From the current situation of major domestic production capacity and business distribution, the direct impact of US tariffs is relatively limited.

In the field of electric vehicles, in 2024, only 116000 cars were exported from China to the United States, accounting for 1.81% of China's total automobile exports, with electric vehicle exports accounting for a smaller proportion. And Chinese domestic brand car companies have basically not sold in the United States, so the direct impact of US tariffs on Chinese domestic cars is relatively small.

In the field of batteries, according to data from the General Administration of Customs, China will export lithium batteries to the United States worth 15.315 billion US dollars (about 110 billion RMB) in 2024, accounting for 25% of the total domestic lithium battery exports, a year-on-year increase of 13%, but the export quantity has decreased by about 16%. In addition, domestic exports to the US market are mainly focused on energy storage batteries. Compared to the limited growth rate of electric vehicles, the US energy storage market is expected to have a year-on-year growth rate of 50% by 2025.

Under the combination of tariffs, it mainly affects the revenue performance of battery companies' energy storage business in the United States. However, in the short term, the energy storage market is still dominated by lithium iron phosphate batteries, LG、 The centralized production time of lithium iron phosphate production lines by Japanese and Korean battery companies such as Panasonic is expected to be after 2026. Although the revenue of energy storage batteries is affected, Japanese and Korean battery companies are temporarily unable to replace domestic energy storage products in the short term, and the tariff burden may be jointly borne by energy storage companies and domestic terminal companies in the United States.

In terms of material enterprises, according to Gaogong Lithium Battery, the proportion of domestic direct exports to the United States is relatively small, mainly exported to Japan and South Korea or directly purchased and made into battery cells by domestic customers before going abroad. According to data disclosed by some listed companies, the proportion of domestic major material enterprises exporting to the United States is mostly within 3%.

However, for lithium battery materials exported to Japanese and Korean companies, there is some room for negotiation in terms of tariff burden due to the impact of US tariffs on Japan and Korea.

The impact of this round of tariffs on the United States has been anticipated by the industry for a long time. From 2022 to 2024, domestic enterprises are forming a multi location production capacity layout in expanding overseas business, including not only domestic manufacturing in the United States, but also investment and factory construction in Europe, Africa, and even the Middle East and South America. In terms of cooperation mode, the industry has also carried out multi-level cooperation modes. CATL and EVE Energy have both cooperated with American companies through technology authorization mode.

In the future, domestic enterprises will gradually invest in building production capacity in the United States, and several companies such as Far East Power, Tianci Materials, and Kodali may gradually put production capacity into operation from 2026 to 2027. The under construction production capacity is expected to be nearly 100 GWh.

In the short term, especially the revenue of energy storage batteries in the United States will be affected to a certain extent, but with the release of domestic production capacity in the United States, the subsequent impact of tariffs will gradually decrease.

Under the influence of tariffs, are exports turning inward?

However, in addition to the direct impact on battery companies, the indirect impact of this tariff may further affect domestic production capacity and price conditions.

In the past, the main paths for domestic companies to overcome internal competition were technological innovation and going global. Some lithium battery companies also enjoyed high gross margins from overseas during the process of going global, driving overall performance growth. To some extent, under the new tariff policy of the Trump administration, in addition to guiding the return of manufacturing to the United States, it is also a cost screening of the global manufacturing industry. In the short term, companies with cost advantages have stronger resistance to tariff shocks.

In contrast, some companies with insignificant cost advantages or weaker bargaining power with downstream customers are most affected by the impact of tariffs.

This also means that some companies that do not have cost advantages and mainly operate in the United States may face situations where their profits are equal to or even lower than those in China. According to the analysis of GGII, the domestic export of energy storage batteries to the United States is close to 80 GWh. Although it accounts for a small proportion of domestic production, the overall lithium battery production capacity may be larger due to the impact on material production capacity and exports to Japan and South Korea.

Under the pressure of tariff costs, some international business orders may experience a return flow, thereby increasing domestic production capacity. Previously, Gaogong Lithium Battery also analyzed that despite the slowdown in capacity construction and destocking in the past two years, domestic battery companies still face the problem of a large gap in capacity utilization between peak and off peak seasons, and the overall capacity utilization needs to be improved. At the same time, in the material field, the problem of difficulty in raising prices due to overall oversupply has not changed. If overseas orders flow back, it will also put certain pressure on the production capacity planning and price quotation of domestic lithium battery enterprises.

In the long run, the globalization of decentralized factories and supply chains is urgent, and to resist more potential tariff impacts, it is also necessary to accelerate the development of diversified localized markets.