A fleet of multibillion-dollar lithium-ion battery factories are under construction across the US, leveraging lucrative manufacturing tax incentives in the Inflation Reduction Act of 2022 in a bid to domesticate an essential energy transition technology.

But as that build-out continues, US imports of lithium-ion batteries are surging to ever new heights, underlining the extent to which America's rising demand for electric vehicles and electrochemical energy storage remains reliant on international trade, especially with China.

In the first three months of 2023, US lithium-ion battery imports jumped nearly 66% from a year ago to 235,386 metric tons, according to data from supply chain research specialist Panjiva. That marked the 11th consecutive quarter of rising battery imports and set a new quarterly record roughly 24% above the previous high in the fourth quarter of 2022.

Among the busiest shippers in the first quarter were China's Contemporary Amperex Technology Co. Ltd., the world's largest maker of lithium-ion batteries; LG Energy Solution Ltd., which has major factories in South Korea, China and Poland; and US-based Tesla Inc., which imports China-made batteries to augment domestically produced counterparts.

The largest consignees included Tesla and Samsung SDS America Inc., a subsidiary of South Korean batterymaker Samsung SDI Co. Ltd. Battery storage system integrator Fluence Energy Inc. and a battery construction affiliate of NextEra Energy Inc. also received large shipments from abroad.

Fluence, Samsung, Tesla and LG Energy Solution, a subsidiary of South Korea-based LG Chem Ltd., are among the companies that have committed to building or expanding US lithium-ion battery manufacturing since the Inflation Reduction Act was enacted, while Contemporary Amperex Technology is partnering with Ford Motor Co. on its domestic battery production.

China accounted for the biggest share of US battery imports in the first quarter, with a dominant 87.9% share, expanding from 77.5% a year ago, according to Panjiva data.

South Korea accounted for 3.2%, down from 4.7% in the first three months of 2022. Poland increased its share to 3.1% for the first quarter of 2023, from 1.4% in the first quarter of 2022. Japan's share of US lithium-ion battery imports collapsed from 11% in the first quarter of 2022 to just 1.2% in the first quarter of 2023.

Panjiva is the supply chain research unit of S&P Global Market Intelligence, a division of S&P Global Inc.

S&P Global Commodity Insights produces content for distribution on S&P Capital IQ Pro.