‘The more locally we produce, the better’: EVLO on US market, tariffs impacts on BESS

Due to increasing energy demand from data centres, tariffs and concerns over the future of the Inflation Reduction Act (IRA), companies like EVLO have a lot to navigate.

As noted by William Derasmo, partner at US law firm Troutman Pepper Locke, for Energy-Storage.news, data centres are expected to double their share of power demand in the next five years to 9%. More power demand means more need for flexibility, which storage can provide.

Trump meanwhile has imposed new tariffs on goods from China, adding 20% to existing tariffs which brings the total tariff on batteries from China to around 50% (for EVs now, from 1 January 2026 for BESS).

The president’s executive order on “Unleashing American Energy” also announced plans to revoke an executive order on the ‘Implementation of the Energy and Infrastructure Provisions of the Inflation Reduction Act of 2022 (IRA)’, though the implications of this are not yet clear.

EVLO’s Martin Rheault discusses these topics and offers insights into how EVLO is addressing these changes. His colleague Adile Ajaja, director of operations, IT and cybersecurity, will speaking at Solar Media’s Energy Storage Summit USA 2025 in Dallas, Texas next week (26/27 March).

Energy-Storage.news: What are some challenges in developing projects in the US versus Canada? What differences do you see?

Martin Rheault: From a technical standpoint, the industry is truly global. The challenges faced by customers in Canada and the US are quite similar—they want battery storage assets that are safe, high-performing, and reliable.

For many clients, BESS technology is still relatively new. While some have been early adopters, they all share the same core concerns: Will the system last for its full lifecycle? Will it perform as expected? Will it be safe? These fundamental questions remain the same across markets.

One thing we’re always careful of is the origin of components, adapting our supply chain as needed to adapt to regulations. Customers may not see this effort firsthand, but ensuring the right components are sourced and delivered efficiently requires extensive coordination.  

How do you anticipate tariffs affecting EVLO, future projects and the big picture?  

Tariffs are no doubt influencing the entire energy storage sector in several ways. Adaptability is crucial.

For example, discussions with supply chain partners are evolving and changing. The general consensus is the more local we produce, the better. 

A few years ago, a rigid, centralised supply chain might have worked, but that’s no longer viable. The industry now requires diversification and flexibility. 

Have you heard similar discussions from others in the industry about production strategies? Are most companies taking the same approach, or have you noticed any unique perspectives?

Across the industry, implementation strategies tend to be more alike than different. The top priority for everyone is following through on commitments—getting closer to customers and increasing local content on both sides of the border.

While the goal is straightforward, the real challenge lies in execution—aligning supply chains, meeting timelines, and keeping costs reasonable for customers.

At the core, success depends on ensuring that real components are manufactured in the right locations.

There has been uncertainty surrounding the Investment Tax Credit (ITC) and the broader future the Inflation Reduction Act (IRA). Can you share your perspective on these concerns and what you’re hearing from others regarding project announcements and the outlook for US projects?

That’s a great question, and we’re likely hearing and reading the same reports. From our perspective, demand remains strong. However, anytime there’s uncertainty—whether around policy, incentives, or regulations—there’s a perception of a slowdown.

But overall, the energy storage industry is still experiencing significant growth. If you look at year-over-year numbers, they’re consistently in the double digits. Even under ideal conditions, the industry has struggled to meet the massive demand for gigawatt-hours of storage.

So, while uncertainty may cause temporary slowdowns, the long-term outlook remains highly promising. The demand for BESS remains strong, and we expect momentum to continue.

How has EVLO’s BESS technology and the industry evolved, and where is it heading?

One of the biggest trends in battery technology is increasing energy density—customers expect to store more energy within the same footprint. This is a key driver in the industry because higher density reduces overall project costs.

Even within the same family of lithium-ion (li-ion) batteries, density is constantly improving. However, higher density also brings challenges, particularly regarding safety, performance, and long-term durability.

As standards and regulations evolve, these factors must be carefully balanced to ensure reliability over 20-plus years of operation.

Looking ahead, battery technology will continue advancing in three key areas: increased energy density, enhanced safety, and localised production. Manufacturing closer to demand centres is becoming a priority, and I think it’s fair to say that trend will only accelerate.

Does EVLO have anything coming up, or is there any other news from the company?

When discussing BESS integration, we often focus on hardware, but in reality, everything is ultimately connected to software. At the core of our system is EVLOGIX–our proprietary North American EMS software, developed over the years to optimise safety, reliability, and performance.

Customers are also becoming increasingly aware that simply procuring components and assembling them on-site isn’t enough. Beyond individual test units, we conduct comprehensive factory acceptance tests following a strict protocol.

The level of integration, the degree of testing, and the overall system validation will soon be a central criterion for selecting energy storage solutions.

In some regions, these requirements are already becoming the norm, and we anticipate this trend will continue industry-wide. EVLO has embraced this philosophy from the start, and we’re glad to see it gaining wider recognition.