SACRAMENTO, Calif. — As production ramps up at the new facility in Sacramento, producing lithium-ion battery components, CEO of the company Sparkz, Sanjeev Malhotra said the new tariffs on countries like China by the U.S. is frankly music to his ears.
“When I first heard about the tariffs, I went and got myself a very nice bottle of wine,” Malhotra said.
All joking aside, Malhotra said China’s dominance in lithium-ion batteries, which powers things like electric cars, makes something like tariffs essential for helping U.S. companies like his compete in the market needed to electrify the country for the future.
“We need to have an advantage,” Malhotra said. “So, that we do not have other countries basically dump [product] at a low cost [into the U.S.] when the industry is in the nascent stages. And here the industry is in the nascent stages.”
Malhotra said their raw materials are domestically sourced and manufacturing is all done in the U.S., too.
The company is in phase one, producing cathode material [which is around 40% of a battery], with plans to expand to cells and full battery packs soon.
He supports the current 20% tariff on Chinese imports and hopes it increases.
“As I said, this industry starting off in the United States,” Malhotra said.
It’s not just Sparkz as various other players.
“For all of us, essentially tariffs provide us that window for us to scale up,” he said.
But while Malhotra can see the positive side of the tariff war, economists said overall tariffs are not good for the economy, especially the on, then off, then on again, tariff rollercoaster said professor of economics at UC Davis Christopher Meissner.
“Every industry’s going to see some damage from this,” Meissner said. “I can’t see a positive business case for such uncertainty and, changing, policies.”
As far as bringing manufacturing jobs back to the U.S., that again is something Meissner said he is skeptical about.
“American manufacturing jobs have gone down, but productivity looks pretty good,” Meissner said. “It’s due to automation more than trade.”
Malhotra said interest in domestic battery products has meant they are expanding the business in other states and his business is already seeing positive effects from the tariffs.
“As we speak here,” Malhotra said. “My sales folks are in discussions with at least a dozen customers who are saying that they were buying from overseas, they were buying from Asia, from China.”
And while Malhotra said he knows he may be an outlier, the new business he said may not have come about if not for the tariffs.
