The electric vehicle and energy storage sector has been one of the fastest-growing import categories in the U.S. market. Lithium batteries, battery cells, cathode materials, anode materials, separators, and finished battery packs sourced from China and other Asian producers were hit with IEEPA surcharges on top of existing Section 301 duties. The combined tariff burden pushed the effective cost of Chinese lithium batteries to extraordinary levels.
The Supreme Court’s February 2026 ruling in Learning Resources, Inc. v. Trump struck down IEEPA tariffs, and the CIT’s March 4 order directed CBP to process refunds. For companies in the EV and battery supply chain, the recovery can be massive — particularly given the high volumes and values of battery imports during the IEEPA period.
This guide covers the specific considerations for lithium battery and EV component importers. For the general recovery process, see the complete guide to IEEPA tariff refunds.
Which products qualify for IEEPA recovery
Any lithium battery or EV component imported from a covered country during the IEEPA period (February 2025 - February 2026) is eligible for IEEPA surcharge recovery. Key product categories:
Battery cells and packs
Lithium-ion cells. Cylindrical, prismatic, and pouch cells in all chemistries — NMC, LFP, NCA, and emerging solid-state formats. These are the core value items in the battery supply chain.
Battery packs and modules. Assembled battery packs for EVs, energy storage systems (ESS), and consumer electronics. These can be extremely high-value imports — a single EV battery pack may be worth $5,000-$15,000.
Portable lithium batteries. Power tool batteries, consumer electronics batteries, and e-bike batteries. Lower per-unit value but often imported in massive quantities.
Battery materials
Cathode materials. Lithium iron phosphate (LFP), nickel manganese cobalt (NMC), lithium cobalt oxide (LCO), and other cathode active materials. China dominates global cathode production.
Anode materials. Natural and synthetic graphite, silicon anode materials, and composite anodes. Chinese graphite is a critical input to nearly all lithium-ion batteries.
Electrolytes and separators. Liquid electrolytes, solid electrolytes, and polyethylene/polypropylene separators. These specialty chemicals and films are heavily sourced from China, Japan, and South Korea.
Lithium compounds. Lithium carbonate, lithium hydroxide, and lithium fluoride. While some lithium is sourced from Australia and South America, processing often occurs in China.
EV components beyond batteries
Electric motors and drive units. Permanent magnet motors, induction motors, and integrated drive assemblies.
Power electronics. Inverters, DC-DC converters, onboard chargers, and battery management systems.
Charging equipment. EVSE (electric vehicle supply equipment), charging cables, and DC fast charging components.
| Product | Typical HTS | Key Origins | IEEPA Rate Range |
|---|---|---|---|
| Li-ion cells | 8507.60 | China, South Korea, Japan | 25-145% |
| Battery packs | 8507.60 | China, South Korea | 25-145% |
| Cathode materials | 2836, 3824 | China | 145% |
| Graphite (anode) | 3801, 2504 | China | 145% |
| Separators | 3920 | China, Japan | 24-145% |
| EV motors | 8501 | China | 145% |
| Power electronics | 8504 | China | 145% |
The scale of the opportunity
Battery imports represent some of the highest-value IEEPA claims in the entire recovery landscape. Consider these numbers:
A mid-size EV component importer importing $50 million in Chinese lithium cells and battery materials annually:
- IEEPA surcharge at 145%: $72,500,000 in IEEPA duties over the tariff period
- Plus statutory interest at 2-4% over the processing period
- Total potential recovery: $75-80 million
An energy storage company importing $20 million in Chinese LFP battery packs:
- IEEPA surcharge at 145%: $29,000,000
- This exceeds the company’s actual product cost
A consumer electronics company importing $10 million in lithium batteries from South Korea:
- IEEPA surcharge at 25%: $2,500,000
- A significant but more manageable recovery
The treasury cash flow modeling guide helps you project when this capital will actually arrive and how to optimize between government processing and immediate capital.
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IRA and clean energy tax credit interaction
Companies in the EV and battery space may be receiving or planning to receive incentives under the Inflation Reduction Act (IRA), including:
- Section 30D EV tax credits (consumer-facing)
- Section 45X Advanced Manufacturing Production Credit (for domestic battery production)
- Section 48C Advanced Energy Project Credit
How IEEPA recovery interacts with IRA credits:
The IRA’s domestic content and “foreign entity of concern” (FEOC) provisions restrict certain credits for vehicles and batteries containing Chinese components. IEEPA tariffs were often cited as an additional policy tool reinforcing the shift away from Chinese battery supply chains.
With IEEPA tariffs struck down and refunded, the tariff-based deterrent is gone — but the IRA’s FEOC restrictions remain. Companies should not assume that the IEEPA recovery changes their IRA compliance position. The FEOC rules operate independently of tariff policy.
Practical implication: If your company accelerated investment in non-Chinese battery supply chains partly to comply with IRA requirements and partly to avoid IEEPA tariffs, the IEEPA recovery addresses the tariff cost but doesn’t change the IRA calculation. Continue pursuing IRA compliance based on the FEOC rules, not tariff rates.
Consult your in-house counsel on any potential interaction between IEEPA recovery proceeds and IRA reporting obligations.
Section 301 tariff overlap
Chinese lithium batteries and EV components are subject to Section 301 tariffs under the Trade Act of 1974. These tariffs were significantly increased in 2024 — the Section 301 rate on Chinese lithium batteries rose to 25% (and was scheduled to increase further for certain product categories).
Section 301 tariffs are NOT refundable under the IEEPA ruling. They remain in effect. Your recovery claim must separate the IEEPA surcharge from the Section 301 duty. The ES-003 report from ACE shows each duty type under its separate HTS code, making the separation straightforward.
For Chinese battery imports, the combined duty stack during the IEEPA period was staggering:
| Duty Layer | Rate | Refundable? |
|---|---|---|
| MFN duty | 3.4% (cells) | No |
| Section 301 | 25% | No |
| IEEPA surcharge | 145% | Yes |
| Total during IEEPA | ~173% | IEEPA only |
Even after the IEEPA recovery, Chinese lithium batteries still carry a 28.4% combined duty burden from MFN + Section 301. The IEEPA recovery doesn’t eliminate the tariff disadvantage of Chinese batteries — it eliminates the unconstitutional excess.
Recovery paths for battery and EV importers
Given the extremely high values involved, battery importers should pursue every available path aggressively:
PSCs on unliquidated entries — file immediately. A single unliquidated entry for a large battery shipment could represent hundreds of thousands in IEEPA duties. Don’t leave these in the queue.
Protests on liquidated entries — the 180-day window is non-negotiable. With per-entry values this high, missing even one deadline is costly. Set up automated liquidation monitoring for all IEEPA-period entries.
CIT litigation for entries past the window — absolutely justified given the dollar amounts. The legal cost of a CIT action is trivial compared to the recovery on a single large battery entry.
Immediate capital for companies with pressing capital needs. Battery startups, energy storage companies, and EV manufacturers often have significant capital requirements for production ramp-up. Converting IEEPA claims to immediate cash can fund operational needs without dilutive financing. The CEO’s guide covers the strategic capital allocation framework.
Supply chain reconfiguration considerations
The IEEPA ruling changes the economics of several supply chain decisions that battery and EV companies made during the tariff period:
Joint ventures and localization
Many companies announced or accelerated joint ventures with Chinese battery manufacturers during the IEEPA period, partly to circumvent tariffs by producing domestically. The IEEPA recovery doesn’t affect the strategic rationale for localization (IRA incentives and supply chain resilience remain drivers), but it does change the financial urgency.
Alternative chemistry sourcing
Some companies shifted from Chinese LFP batteries to non-Chinese NMC or other chemistries to avoid tariffs. The recovery doesn’t reverse those technical decisions, but it changes the cost comparison going forward.
Raw material supply chain
Chinese dominance in battery materials (graphite, cathode active materials, lithium processing) means the IEEPA recovery on material imports may be even larger than the recovery on finished cells. Companies building domestic cell production still import the raw materials from China and paid IEEPA surcharges on those inputs.
The battery recycling dimension
The growing battery recycling industry imports used batteries and battery materials for recovery and repurposing. These imports were subject to IEEPA surcharges just like new batteries:
Used battery imports. Companies importing spent lithium-ion batteries for recycling paid IEEPA surcharges on the declared value of the used batteries. The recovery applies to these entries.
Recovered materials. Black mass, cobalt sulfate, and other materials recovered from battery recycling in covered countries and imported to the U.S. were also subject to IEEPA surcharges. These are recoverable.
Circular economy economics. The IEEPA surcharge made imported recycled battery materials less competitive versus virgin materials, undermining the economics of circular battery supply chains. The recovery restores the economic case for importing recycled materials.
Energy storage project developer considerations
Grid-scale and commercial energy storage developers face project-specific IEEPA recovery considerations:
Project finance structures. Many BESS projects are financed through project finance vehicles (SPVs) with specific ownership structures. The IEEPA recovery right belongs to the entity that was the importer of record — which may be the project SPV, the developer, or a procurement entity. Verify IOR status before filing.
PPA and offtake agreements. If your storage project has a tolling agreement, capacity contract, or revenue-sharing arrangement with a utility or off-taker, review whether the IEEPA recovery affects any cost-sharing or benefit-sharing provisions.
Investment tax credit basis. Similar to solar projects, the ITC basis for energy storage projects (which became eligible for standalone ITC under the IRA) may include IEEPA duties. A refund of those duties could require a basis adjustment. Consult your tax advisor on the ITC interaction.
State-level incentives. Some states offer additional incentives for energy storage deployment. Verify whether the IEEPA recovery interacts with any state-level grant, rebate, or rate-based incentive programs.
The EV startup and growth company challenge
EV startups and growth-stage companies face a particular challenge: they’re often cash-constrained precisely when the IEEPA recovery could be most impactful. For these companies:
Immediate capital may be the right choice. Waiting 18-36 months for government processing isn’t feasible when you need capital for production ramp, R&D, or market launch. Converting IEEPA claims to immediate cash at a discount may be the optimal financial decision when your cost of capital is high and your deployment opportunities are immediate.
Working capital relief. IEEPA duties consumed working capital that could have been deployed for inventory, tooling, or operational expenses. The recovery restores that working capital — or the immediate capital path accelerates the restoration.
Fundraising leverage. A recognized IEEPA receivable (or immediate capital proceeds) can improve your balance sheet position when you’re raising equity or debt financing. The asset strengthens your financial profile at a critical time.
Cash runway extension. For pre-revenue or early-revenue EV companies, the IEEPA recovery can meaningfully extend your cash runway. The treasury modeling guide helps quantify the runway extension under different recovery timing scenarios.
Action plan for battery and EV importers
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Quantify your IEEPA exposure. Pull the ES-003 report and separate IEEPA from Section 301 and MFN duties.
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Prioritize high-value entries. File PSCs and protests on the largest-dollar entries first.
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Review IRA compliance. Confirm that IEEPA recovery doesn’t trigger any reporting obligations under IRA agreements.
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Evaluate immediate capital. For companies with $10 million+ in IEEPA claims, the NPV analysis may favor immediate capital on a portion of the portfolio.
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Request an Impact Assessment. The entry-level analysis separates recoverable IEEPA duties from Section 301, calculates statutory interest, and maps every entry to the optimal recovery path.
Classification nuances in battery imports
Battery and EV component classification can be complex, and classification errors may affect both the IEEPA recovery amount and the MFN duty rate:
Cells vs. modules vs. packs. The HTS classification differs depending on whether you’re importing individual cells, assembled modules, or complete battery packs. The duty rate may differ across these classifications, and the IEEPA surcharge was assessed on the classified entry value. Verify that your entries are classified at the correct level.
Battery management systems (BMS). Imported separately, a BMS may be classified as an electronic control unit rather than a battery component. The IEEPA surcharge applies based on the actual classification and country of origin. If BMS units were bundled with battery packs in the same entry, they were assessed as part of the pack value.
Dual-use components. Some components (connectors, housings, thermal management systems) are used in both battery and non-battery applications. Their classification may vary depending on how they’re described in the entry. Verify that the classification accurately reflects the product for both MFN and IEEPA purposes.
Prototype and pre-production imports. EV companies often import prototype batteries and components for testing and validation. These entries carry IEEPA surcharges just like production entries. Don’t overlook pre-production imports in your recovery analysis — they can be high-value entries for advanced battery technologies.
The grid-scale energy storage market
Grid-scale BESS installations have grown rapidly, driven by renewable energy integration requirements and grid resilience needs. The IEEPA recovery for grid-scale importers has specific characteristics:
Large per-entry values. A single container of grid-scale battery modules can have an entry value of $500,000-$2,000,000. At 145% IEEPA on Chinese origin, that’s $725,000-$2,900,000 in recoverable surcharges per entry.
Utility rate base implications. For regulated utilities that include battery storage in their rate base, the IEEPA recovery may require a rate base adjustment or customer credit. Regulated utilities should coordinate with their regulatory counsel on the treatment of recovery proceeds.
Developer vs. asset owner. In project finance structures where the developer and the long-term asset owner are different entities, verify who was the IOR at the time of import. The recovery right follows the IOR, which may be the developer, the EPC contractor, or a procurement entity.
E-bike and micromobility batteries
The rapidly growing e-bike and micromobility sector imports millions of lithium battery packs annually from covered countries — primarily China:
E-bike battery packs. Integrated battery systems for electric bicycles, typically 36V-52V lithium-ion packs. China manufactures the vast majority of e-bike batteries consumed in the U.S. market. At 145% IEEPA, a $200 battery pack generated $290 in surcharges — exceeding the battery’s cost.
Scooter and micromobility batteries. Electric scooter sharing companies (Lime, Bird, etc.) and personal scooter manufacturers import batteries and complete vehicles from China. The IEEPA surcharge on battery-powered micromobility vehicles was assessed on the full vehicle value, including the battery component.
Power tool battery packs. Lithium battery packs for cordless power tools represent a significant import category. Major tool brands import batteries from Chinese manufacturing partners. The recovery applies to these entries at the standard IEEPA rate for the country of origin.
The micromobility and power tool battery categories are sometimes overlooked in IEEPA recovery discussions that focus on EVs, but the aggregate import volumes are substantial and fully eligible for recovery.
The battery and EV sector has some of the largest IEEPA recovery claims in the economy. The numbers are too big to leave on the table.
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