The U.S.-China Economic and Security Review Commission, released its annual report to Congress this month.  The 793-page report responds to the Commission’s mandate to “monitor, investigate, and report to Congress on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China.” The report is a culmination of a “broad and bipartisan consensus…with all 12 members voting unanimously to approve and submit it to Congress.”

Although the report is detailed and fascinating, there is one conclusion that is relevant to this post—China has a clear advantage over the United States “at each stage of the battery supply chain, ushering in rapid global market share increases for Chinese EV and battery makers.” As a result, “China’s near monopoly on battery manufacturing creates dependencies for U.S. auto manufacturers reliant on upstream suppliers as well as potential latent threats to U.S. critical infrastructure from the ongoing installation of Chinese-made battery energy storage systems throughout U.S. electrical grids and backup systems for industrial users.”

In other words, China’s dominance in manufacturing of batteries that are used for electric vehicles, and for storage of energy, including renewable energy, poses a cybersecurity risk to the United States. To combat the risk, the Commission recommends:

“To protect U.S. economic and national security interests, Congress [should] consider legislation to restrict or ban the importation of certain technologies and services controlled by Chinese entities, including:

• Autonomous humanoid robots with advanced capabilities of (i) dexterity, (ii) locomotion, and (iii) intelligence; and
• Energy infrastructure products that involve remote servicing, maintenance, or monitoring capabilities, such as load balancing and other batteries supporting the electrical grid, batteries used as backup systems for industrial facilities and/or critical infrastructure, and transformers and associated equipment.”

Hopefully, Congress will take these threats and recommendations seriously as U.S. consumers buy electric vehicles and expand uses for renewable energy.