For all of its efforts to drive a domestic manufacturing boom in key industries, the United States remains heavily reliant on Asian expertise to build batteries, the powerful technologies that underpin drones, electric vehicles, and much more.
It’s a reality that was laid bare last week when U.S. immigration officials raided an EV battery plant construction site in Georgia and detained around 475 workers, most of whom were South Korean nationals. The plant is co-owned by Hyundai, a South Korean carmaker. U.S. authorities said the raid was the biggest single-site enforcement operation in the Department of Homeland Security’s history.
The raid ignited a diplomatic firestorm with longtime U.S. ally South Korea and has cast a spotlight on the state of the U.S. battery sector. Batteries are essential to powering many of the world’s most cutting-edge defense and energy technologies, including military drones and submarines. Yet the U.S. industry remains deeply dependent on foreign know-how to grow its own sector, and experts warn that the Trump administration’s Hyundai crackdown risks further spooking investment.
“We are reliant on foreign help to build and scale this technology,” said Chris Berry, the president of House Mountain Partners, an independent metals analysis consultancy. “The United States labor force is not going to be able to build these types of extremely technically detailed plants without foreign help.”
It’s not unusual for foreign companies to first rely on their own talent when initially scaling up operations overseas and then train a local workforce, experts said.
“The number of Korean employees at the beginning, while they’re transferring the management technology, [is] higher—and then as quickly as they can, they transfer that knowledge, and then they go home, and it’s less expensive for the company,” said Tami Overby, an international business consultant who previously headed the U.S.-Korea Business Council at the U.S. Chamber of Commerce.
South Korean President Lee Jae-myung made a similar point on Thursday: “This isn’t long-term permanent employment but to establish facilities and equipment for factories; we need technicians to install machinery and equipment. The U.S. doesn’t have such personnel, and they won’t give visas for [our workers] to stay and work.” He warned Washington that South Korean businesses would “hesitate to make direct investments” in the United States if it failed to resolve visa issues quickly.
The Hyundai case has exposed the state of U.S. battery manufacturing expertise. Today, the world’s biggest battery powerhouse is China, which produces more than three-quarters of all batteries sold globally—and does so significantly more cheaply and efficiently than its global competitors—according to the International Energy Agency (IEA). China is the source of more than 70 percent of all EV batteries ever produced, driving ample manufacturing and production expertise.
After China, South Korea and Japan are global battery giants that have made hefty overseas investments. Korean firms in particular top the charts in overseas manufacturing capacity, and last year Korean producers filled more than 20 percent of global electric car battery demand.
“The Koreans, the Japanese, and the Chinese in particular all really understand the technology behind these batteries and the chemistries and the pros and the cons—but they also understand how to scale at speed,” Berry said.
To fuel a U.S. battery boom, the Biden administration harnessed its landmark climate bill, the Inflation Reduction Act (IRA), which used hefty tax incentives to encourage domestic manufacturing and drive new investment and interest in the sector. The IRA was “game changing legislation,” Manish Dua, an analyst with Benchmark Mineral Intelligence, said in 2023. “Massive outlay of subsidies and tax credits has boosted private sector participation across the whole cleantech space.”
U.S. President Donald Trump has gone in another direction entirely, with an onslaught of moves meant to gut the U.S. clean energy sector, unwind many of the Biden tax credits, and unleash more fossil fuel production. The Trump administration’s targeting of EVs—a key market for batteries—has injected fresh uncertainty into the U.S. battery sector, as has its trade war with China, which dominates battery supply chains.
At the same time, the U.S. Energy Department has announced up to $500 million in funding opportunities to boost battery manufacturing and recycling, and U.S. automakers are eager to propel the United States to the forefront of the battery race.
Early this year, General Motors battery chief Kurt Kelty urged North America to “seize EV battery leadership from China.”
“By advancing battery technologies and driving innovation, strengthening our onshoring, and making our supply chain the most competitive in the world, we’re building not just better batteries but a stronger and more resilient U.S. industry for the future,” Kelty said.
U.S. firms have indeed made big strides in research and innovation for batteries, particularly with developing new battery chemistries. But that’s just one part of the battery equation, experts said.
“There is sometimes a gap between research and development and really scaling it up at an industrial and a commercial level,” said Bryan Bille, a policy expert at Benchmark. “That’s basically what China is really good at.”
Days after the Hyundai raid, Trump himself acknowledged that there was a gap in U.S. battery manufacturing that foreigners have helped plug. “You don’t have people in this country who know about batteries,” Trump said on Sunday. “Maybe we should help them along and let some people come in and train our people.”
“We do have to work something out where we bring in experts so our people can be trained so they can do it themselves,” Trump added.
Yet U.S. immigration rules and the Hyundai raid—which has sent shockwaves through other Korean and international firms—also risk deterring the very investment that Trump has been courting as part of his big plan to build up U.S. manufacturing might and push companies to bring production to the United States. The United States lacks a visa program for foreign companies that wish to bring in skilled workers for a short-term period for construction purposes, the Washington Post reported.
The fallout from the raid may already be biting. South Korean officials said on Thursday that Trump offered to allow hundreds of those arrested workers to stay in the United States to train an American workforce. But only one Korean worker decided to stay, the officials said.
Many of the large foreign investors in the United States are likely “quite shocked,” Overby said. “It gives everyone a moment to take a breath and review their immigration compliance rules and regulations, not just for their employees but for contractors, subcontractors, everyone up and down the supply chain.”
After the raid, South Korean firms have halted work on at least 22 projects in the United States, and Hyundai’s chief told Bloomberg that the incident had resulted in a “minimum two to three months delay” on the battery plant.
“I look at it as a little bit of an own-goal,” Berry said. “We’re cutting off our nose to spite our face here in the United States.”