Solar Panels and EV Batteries: US Green Energy Policies Toward China

Abstract

As of mid-2023, China produced 97 percent of the world’s solar panel silicon wafers and was rapidly growing in importance as a provider of batteries for the latest generations of electric vehicles. The Biden Administration’s Inflation Reduction Act (IRA) had provisions to help US manufacturers of green technologies in the energy and automotive industries compete in key sectors against China. By late 2024, however, American efforts in these two vital green energy areas had seen both false starts at competition and defensive efforts that may be counterproductive to US interests. Recent developments called into question whether the Biden administration’s strategy to create a domestic bulwark against Chinese manufacturing would further, or perhaps more likely hinder, the simultaneous American goal of rapid deployment of low-carbon technologies. This article assesses both the solar panel and electric vehicle battery sectors, and considers the challenges and opportunities that Chinese competition creates for the US. As the Biden administration came to an end, the IRA stood to facilitate progress in both arenas, though policy toward China’s participation in the sectors would likely shape the pace at which these industries would develop.