(Bloomberg) —
Enphase Energy Inc., a US solar and battery systems supplier, is in the process of moving its battery cell manufacturing out of China to avoid tariffs imposed by President Donald Trump as part of a wider trade war between the world’s two largest economies.
“We need to be making cell packs outside of China and that’s what we are going to be focusing on the next year,” Chief Executive Officer Badri Kothandaraman said in an interview with Bloomberg News. He did not specify where the company would move its operations.
While a third of Enphase’s battery assembly operations are currently based in the US, the company gets battery cell packs, a key component, from China, he said.
Read More: Solar Firms Jump After Enphase Signals Steadying US Market
Trump imposed a 10% tariff on Chinese imports on Tuesday, and China retaliated with levies on US energy and other measures including tightened export control on critical minerals. China accounts for nearly 70% of US battery imports, according to BloombergNEF.
BloombergNEF’s Javier Rico said Enphase can benefit from additional tax credits if the company manufactures battery cells in the US. “It makes sense that now, their next move is to diversify the cells away from China,” the analyst said. Projects that buy US-made batteries, can also access additional incentives by having them in a project.
The Biden administration already increased tariffs on Chinese EV batteries, raising the rate to 28.4% in 2024. While stationary batteries won’t see the added tariff increase until 2026, the additional 10% tariff proposed by Trump will push costs for the segment.
Enphase said the tariffs will result in a small increase in the company’s costs, resulting in a 2% to 3% boost to how much a homeowner will pay for a system.
“It’s not going to hurt us too much,” Kothandaraman said.
(Adds analyst commentary in fifth paragraph, incoming 2026 tariffs in sixth.)
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