U.S. battery startup EnerVenue has opened a factory in China after abandoning plans to make Kentucky the site of its first manufacturing plant. The Changzhou facility began production as President Donald Trump met with his Chinese counterpart, Xi Jinping, in Washington.
Chief Executive Henning Rath told Reuters that the timing was a coincidence and that the decision to manufacture in China rather than the U.S. came down to skills and supply-chain depth, particularly in Changzhou, which bills itself as China’s “new energy capital.”
“The secret sauce is this industrial cluster,” Rath said, citing the density of hydraulics, pneumatics and automation specialists, as well as engineers able to quickly iterate on what he called a “first-of-its-kind” production line.
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Rath also said that without building in China, it would be “very difficult with the capital available” to prove the manufacturing process at commercial scale. When Rath joined the company in April, he made building in China a precondition for taking the job.
EnerVenue’s decision has been viewed by some as highlighting the challenges facing efforts to attract more manufacturing to the U.S.
A floor manager at the Changzhou plant said local suppliers often develop equipment without payment until a design is adopted, unlike foreign vendors that tend to require upfront payment. Graduate engineers earn about 12,000 yuan ($1,792) a month, well below U.S. salaries, he added.
EnerVenue, founded by Stanford materials science professor Yi Cui, makes nickel-hydrogen batteries derived from technology NASA used in the Hubble Space Telescope and International Space Station.
In 2023, the company announced plans for a factory in Kentucky, with the first phase expected to cost $264 million and create 450 jobs. The plans were abandoned a year later.
Rath said the Kentucky project was a “valuable learning experience,” but the technology was not yet ready.
According to Reuters, Rath declined to disclose the cost of the Changzhou facility, which is about 95% automated and is expected to employ about 400 workers by the end of the year. He gave an estimated cost range of $20 million to $50 million.
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Government support was limited to permitting, certification and site selection, Rath said.
EnerVenue raised more than $300 million in a funding round in March. The round was led by Full Vision Capital, the family office of Hong Kong property heir Peter Lee Ka-kit, whose broader group includes customer Towngas, Rath said. Other investors included Saudi Aramco and SLB.
Rath described EnerVenue as “an American company with a Chinese footprint.” The company aims to reach annual production capacity of 250 megawatt-hours this year, equivalent to about 300 battery cells a day, and increase capacity to 1 gigawatt-hour by the third quarter of 2027.
The company also plans to open similar factories in North America, the Middle East and Europe beginning in 2028, with sites expected to be selected next year, according to Rath.
However, he emphasized that China is the “factory of factories” and “an important stepping stone” toward EnerVenue’s global production.