2Q 2023

Analyst Insight: The IRA's Impact on the US Lithium-Ion Market

Energy Storage Tracker Insights

The Inflation Reduction Act (IRA) is a critical turning point in the US’s outlook on sustainability technology. It is igniting aggressive investment in technologies such as EVs, renewable energy technology, batteries, and services for the grid, along with major tax incentives for businesses and citizens willing to participate. While this wave of green tech excitement should have an overall positive impact on the US’s sustainability measures, markets like energy storage systems (ESS) will need time to adjust.  

The energy storage market currently depends on overseas lithium ion (Li-ion) battery manufacturing and is facing stiff competition from growing global demand. The IRA has stimulated interest in US battery production, which is quickly evolving to keep pace with demand. Major OEMs are taking advantage of IRA incentives to build new battery recycling and manufacturing facilities to combat the last few year’s supply shortages and rising prices.

This Guidehouse Insights Energy Storage Tracker Analyst Insight provides an overview of the Li-ion trends and opportunities the IRA sparked, including market inflection trends, market drivers and barriers, an overview of the energy storage market and investments in the US battery market. It provides Energy Storage Tracker highlights from the past two years and conclusions and key recommendations for stakeholders in the energy storage industry. The report is based on data from the Energy Storage Tracker released in 2Q23.

Pages 14
Tables | Charts | Figures 6
  • How large is the North American energy storage market?
  • How is the IRA impacting the Li-ion battery market in the US?
  • What does global ESS capacity look like on a regional level?
  • How are raw materials needed for Li-ion batteries distributed around the world?
  • What is the most globally deployed ESS type?
  • Energy storage and smart grid technology companies
  • Battery manufacturers
  • Governments
  • Grid operators
  • EV developers
  • Large industrial power users
  • Utilities
  • Military agencies



Executive Summary

Market Inflection Trends

Market Drivers and Barriers

Energy Storage Market Overview

US Li-Ion Market

The IRA’s Impact on the US Battery Market

The Last Four Energy Storage Updates


Acronyms and Abbreviations

Additional Resources


  • Energy Storage System Capacity by Region, World Markets: 2Q23
  • Top 10 Energy Storage Types by Total Capacity, World Markets: 2Q23
  • Global Distribution of Raw Materials Needed for Li-Ion Batteries, World Markets: 2Q23
  • US Li-Ion Recycling and Manufacturing Investments
  • Number of Projects in the Energy Storage Systems Tracker between 4Q21 and 2Q23
  • ESSs: Industry Growth Potential, World Markets: 2Q23
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