WASHINGTON, September 21 — The economic stakes of a US emergency order targeting imported power equipment are coming into focus, with Chinese battery storage suppliers holding a dominant position in the global market and American firms facing questions about whether they can compete profitably if supply chains are disrupted. On 26 August, US President Donald Trump issued an emergency executive order banning the import of inverters, transformers and other power equipment, citing a potential risk to US grid security.
The order applies to specific power system equipment, including grid-connected inverters, transformers and battery energy storage systems (BESS). It covers only equipment connected to transmission lines of 69kV or higher, excluding distributed energy resources and local distribution infrastructure.
Scope and Targets
The order targets 24 countries currently subject to US arms embargoes and sanctions, with China being the most significant. Equipment must originate from these countries or from entities owned, controlled or directed by them — a framework similar to US foreign entity of concern regulations. The order is not yet active but will apply to all transactions initiated after 26 August 2026.
The Department of Energy has 120 days to issue implementing regulations. Transactions will not be prohibited until the DOE determines that the equipment poses an unacceptable risk to US security based on cybersecurity, sabotage and remote access threats.
Implementation details remain unclear. Law firm Norton Rose Fulbright suggested the DOE may create a whitelist of pre-approved equipment and vendors or establish a licensing process for power companies seeking to use sensitive equipment. More stringent measures are also possible, including orders to isolate, monitor or remove equipment already in operation.
Supplier Landscape and Market Reaction
Chinese suppliers dominate the global BESS market. According to the latest Battery StorageTech Bankability Ratings Report for Q2 from PV Tech Research, the top five players control 39% of market share. Leading Chinese manufacturers like CATL, Rept Battero, CALB, and Eve Energy have posted strong profit growth and are aggressively expanding internationally, with overseas revenue up 51% in H1 2026.
Immediately following the EO on 26 August, there was speculation about which companies would stand to gain or lose from its potential follow-through. Multiple analysts began following the stock prices of BESS companies Fluence and Tesla.
Fluence did see a brief spike in its stock price on 26 and 27 August, but shares quickly fell below even their previous prices. Analysts at multinational banks Barclays and Piper Sandler expressed doubt over the company’s margins and ability to deliver on its project backlog. This concern is notable given that Fluence recently posted a record US$5.6 billion backlog, according to the Battery StorageTech Bankability Ratings Report.
It raises questions about whether Fluence can execute profitably while facing potential supply chain disruptions from the ban and competing against vertically integrated Chinese players who control both cell production and system manufacturing, giving them significant cost advantages. Tesla, experiencing ups and downs since the EO, has continued an upward trajectory.
Notably, some analysts are arguing it would be better to sell the company’s stock. Investment research firm Zacks noted that Tesla is cutting prices on its electric vehicles in China because it’s losing market share to domestic competitors like BYD and NIO. While the discounts could temporarily boost sales, they’re likely to further squeeze Tesla’s already-thin profit margins and could spark a broader price war that makes the situation worse for all.
What to Watch
The DOE’s 120-day window to issue implementing regulations will determine how broadly the order is applied and whether a whitelist or licensing process emerges. For now, the immediate question is whether American BESS developers can secure alternative suppliers at competitive prices — or whether the order reshapes a market where Chinese manufacturers already control a significant share.
