1、 EQUITIES CAPITAL GOODS APAC NEW ENERGY How would the OBBB impact the battery sector?9 JULY 2025 Sector Research Report Production time:12:27*(London time)Research Analysts&Publishing EntitiesResearch Analysts&Publishing Entities Event:Trump signed the“One Big Beautiful Bill”(OBBB)into law on 4 July

2、 Key changes related to the battery sector include:1)Expiration of EV tax credits(USD7,500/car)brought forward to 30 Sep 2025 from 31 Dec 2032.2)Relatively small impacts on ESS project ITC(credits through 2032);step-down of solar ITC&PTC(credits through 2027)but with safe-harbour(credits through 203

3、2 if construction starts within 1 year of law passing);3)IRA manufacturing production credits largely intact(to expire by end-2031 vs 2032 previously).Our view#1:Headwinds on EV battery demand in the US;ESS demand to be more resilient For EV batteries,BNPP Exane auto research team previously cut 203

4、0E US EV penetration by 15ppts to 36%due to removal of tax credit.We estimate the US EV battery demand could reach 1,823.9GWh(lowered by 21.7%)in 2025-30E.For ESS batteries,BNPP Exane US utilities research team expects solar installation volume to be largely unaffected at 340GW in 2025-30E assuming

5、most projects could be safe harboured.We estimate US ESS battery demand from solar projects could reach 488.9GWh(lowered by 5.2%)in 2025-30E assuming increasing equipment ratio and back-up hours.In the near term,we expect ESS battery demand to benefit from the front-loaded demand in 2025-26 ahead of

6、 the safe harbour expiration in mid-2026.Overall,we admit structural headwinds in the US battery market,while the global growth profile of the battery industry remains largely intact,given the US market only accounted for 13.0%/12.2%of global EV/ESS battery demand in 2024,plus growing demand from Ch