On September 22nd, local time, Reuters reported that American battery startup EnerVenue has abandoned its plan to build its first factory in Kentucky and instead decided to establish it in China. This reveals that President Trump's efforts to attract manufacturing back to the United States still have limitations.
According to reports, EnerVenue has a research and development department in Fremont, California. It was founded by Cui Yi, a Chinese-American professor of materials science at Stanford University. The team has developed a new material that can significantly reduce the cost of nickel-metal hydride batteries while maintaining excellent battery performance. In 2023, EnerVenue announced plans to build a factory in Kentucky. The first phase of the project cost $264 million and created 450 jobs. However, the plan was abandoned a year later.
CEO Henning Ratt told Reuters that the Kentucky pilot project was a “valuable learning experience,” but the technology was not yet mature at that time. EnerVenue then redesigned the batteries and the factory.
EnerVenue will start mass production at its factory in Changzhou this Thursday. When Rat joined the company in April this year, he stipulated that building a factory in China was a prerequisite for accepting the position. He explained that choosing to produce in China rather than the United States was because China has a more solid skill base and a deeper supply chain, especially in Changzhou, the “new energy capital of China”.
The true secret lies in this industrial cluster. Ratti pointed out that the area has attracted a large number of experts in hydraulics, pneumatics, and automation, as well as engineers capable of rapidly iterating on the company's "first-mover" production lines. Ratti said that if the plant were not built in China, with existing capital, it would be “extremely difficult” to validate manufacturing processes at a commercial scale.
Reuters noted that EnerVenue's choice indicates that even in an industry considered crucial to the United States' energy security and supply resilience, Trump's tax cuts, simplified approval processes, and other incentives may not be enough to offset the advantages held by countries like China.
Latt declined to disclose the exact construction costs of the factory in Changzhou, but stated that the costs were between $20 million and $50 million. Approximately 95% of the factory's production processes are already automated, and around 400 employees will be hired by the end of this year. He also said that the support provided by the Chinese government mainly focused on approvals, certifications, and site selection.
In March of this year, EnerVenue completed a round of financing worth over $300 million, led by Full Vision Capital, a family office under Hong Kong real estate tycoon Li Jiajie. Latt said that the company's goal for this year is to reach an annual production capacity of 250 terawatt-hours, which is equivalent to about 300 cells per day. By the third quarter of 2027, this figure is expected to increase to 1 gigawatt-hour.
Latt revealed that EnerVenue plans to open similar facilities in North America, the Middle East, and Europe starting from 2028. The locations for these facilities will be determined next year.
We are an American company with a footprint in China.” However, he emphasized that China is “a factory within factories” and also a vital stepping stone for global production.
When asked if EnerVenue would set up factories in the United States, Rat said, “We hope to enter the North American market. Right now, it depends to some extent on legislation and regulation.”
