US battery equipment makers have taken their battle to Washington DC to defend their markets by promoting a “Made in America” approach and claim they are gaining the government’s ear. Andrew Draper reports.
The Battery Machine Builders coalition was formed with six members last October and their spokesperson, Bennett Resnik, said the lobby association has been working with the Departments of Energy and Defence in pursuit of activities that will promote domestic battery equipment manufacturing.
“While a young organisation, we’ve found quick success and strong partnership with the government in considering equipment supply chain for federal funding opportunities. It is our goal to continue efforts that will place an emphasis on American-made machine procurement in all federal funding, financing and tax incentives,” he said.
One of its founders is New-York based Charles Ross & Son Company, which makes mixers for a range of industries including batteries. Sales Manager Christine Banaszek said the company is consistently losing out when new battery plants are being built and fitted out in the US with equipment that more often than not comes from Asia.
“For now, for us here in the US…there are opportunities from these battery plants being built, but they are maybe joint ventures with Chinese battery companies. Or they’re using technology from China,” she said.
“In the US, it has been commonplace to work with large engineering companies that provide the design, procurement and installation of a turnkey system. However in Asia, a single provider of the entire turnkey system is contracted to handle everything. What we are finding today is that US JVs that have aligned themselves with Asian battery manufacturers are incorporating this ideology by bringing foreign equipment and the labour to install the systems here in the US,” she added.
Ross does not provide turnkey systems. It has a holding in a mixer manufacturer in China. That in turn has a separate company providing turnkey solutions.
Cutthroat prices
New plants are opening throughout the US to build batteries. But the equipment and the machinery are still coming from China at cutthroat prices, according to Banaszek. “So that’s why we formed this coalition with Ross as a founding member,” she said.
The coalition partners are trying to convince US politicians that for plans receiving federal funding, it should be written into grant applications that the machinery should be sourced in the US, or a percentage of it at least, she said.
That is a requirement for raw materials under the Inflation Reduction Act, she said. “But somehow it was forgotten to put it in and to also include the machinery.”
Still dependent on China
That has to change, she told BEST. “This is actually money from the government that we are spending to stimulate the market and, they say, so we won’t be so dependent on China. “But in truth, you’re still being dependent on China because you’re getting the machinery from there and you know, they have the the password to the code and recipe software. The end users aren’t even allowed to have access to the programming for whatever controls the mixers or the machinery.”
Banaszek said the coalition’s work is bearing some fruit in alerting the government and its agencies to the issues around national security.
Fishing expeditions for information
She added that many of the new plant owners were requesting quotes but it seemed like fishing expeditions for information. “So we found this flurry of new plants. There was a time in 2022 where almost every week there was an announcement, or people were asking us for quotes. But they were all turnkey systems and they wanted somebody like a single vendor type.”
Such vendors do not exist in the US, she said. Traditionally, when a new plant opened, the owners would hire an engineering firm which would design and contract all the specialised vendors needed, and then put everything together.
“But this time the battery plants were expecting a quote from us, it’s basically like, ‘quote me a plant that has to produce 10GWh of work,” she laughed. “And so that trend was just so obvious and nobody here got the order. Everything was coming from Asia.” And there is nothing to stop that happening, but it still looks great PR for the US and American jobs, she said.
The concern is what might come next, she said. “Because it could start with battery manufacturing now. But what’s stopping them in the future if they want to import machinery to make other critical components – do they just import them from Asia too?” And the battery market opened that possibility, she said. “So we want to stop that trend of shipping US dollars and jobs overseas.”
Ross learned that many Asian equipment manufacturers were planning to set up in the US – not manufacturing, but rather service centres. That is an understandable development, she added, but it might threaten the existence of established US players.
She points to her company’s established and loyal customer base, which she believes will ensure its survival, but also notes the challenger companies from Asia are coming in with prices that are maybe a quarter to a third of theirs.
You get what you pay for
The old adage of you get what you pay for seems to apply, she added with a smile. She has heard of companies who went with the cheaper goods and found “everything that could go wrong, went wrong.”
The job of the coalition, she said, is to call attention to the fact that US companies can also build those machines at home.
It wants clauses in funding contracts, legislation even, that the battery plants must buy American. “Yes, they should be required to buy American. And we even say it doesn’t have to be Ross, it could be any American company as long as it’s kept here.”
The coalition was established with six members. They include Siemens, Abbot Furnace, Bechtel, BW Papersystems, Ross and Dürr. It is under the umbrella of Venn Strategies, which also lobbies on behalf of the Battery Materials and Technology Coalition.
Its stated strategies are to:
- increase awareness of US battery machine manufacturing
- obtain preferential treatment in federal funding, financing and tax credits
- build capacity in the US through market growth.
Its targets are the Departments of Energy, Defense, Commerce, Treasury and the White House; and it lobbies individual politicians and officials.
Many initiatives over the years
Another coalition member is Dürr Systems. Clean technology systems business development director David Ventola told BEST there have been many initiatives over the years to stimulate the industry, including the American Recovery and Reinvestment Act following the financial crash of 2009. Some 5–6 battery factories were built in the US with that government funding, he said. More than half of the machinery for these factories was imported from Asia, as the funding agreements did not require US-built machinery, he added.
Then came the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act. There is a basic funding requirement that by 2026, 75% of the content of the battery – the materials and the components – need to be produced domestically.
“And so that’s kicked off a significant wave of investment from mining to active materials production, to cell manufacturing. And again, the regulations leave out the source of machinery. Even though the materials and the components need to come from North America, as for the machinery, there’s no comment.”
With the new gigafactory projects, many of them have either a joint venture partner or a very strong technology partnership with an Asian company, he added.
Not much of a look-in
In some cases, especially ones involving Chinese companies, Asian battery manufacturers have invested in Asian machine builders and co-developed products. It means US machine builders do not get much of a look-in when trying to gain business.
Ventola said: “So I think there are barriers to entry and what we hope to get is a chance to bid. We want to be competitive. And so the objective that we have, at least from Dürr, is to let the US government – if they’re going to give out taxpayer dollars, which they are – at least give a preference to companies who say ‘We’ll purchase the machinery in North America, because then it’s stimulating the economy in North America and not sending that capital investment to somewhere across the Pacific.’”
He pointed to two funding opportunity notices from the DOE:
- DE-FOA-0003099, which refers to ‘domestic manufacturing equipment’ funded under the Infrastructure Investment and Jobs Act (known as BIL). That is set to invest more than $7 billion in the battery supply chain from 2022–26
- DE-FOA-0003236, on battery manufacturing. It noted most of the world’s suppliers of battery processing machines are outside the US and added ‘It is important to develop adaptable and versatile domestic processing machines that are also easily integrated into domestic manufacturing lines.’
“Our advocacy to DOE is moving the needle,” said Ventola.