California is a battery research juggernaut. Why can’t it manufacture them too?

California is a leader in battery innovation, research, and talent development. To build a resilient clean energy transition and capture the full economic benefits of this growing industry, the state also needs a diverse, domestic battery supply chain that spans the entire value chain—including manufacturing. Yet despite its leadership in innovation, California continues to lose large-scale manufacturing investment to other regions and states.
A new employer assessment brief from New Energy Nexus California reveals why the State struggles to attract battery manufacturers compared to other states and what the state can do to compete. The findings are clear: structural barriers hold back companies willing to invest and scale production locally.
Why California falls behind
Manufacturing siting decisions depend on speed, certainty, and cost. California scores high on talent and innovation but falls short on:
- Power infrastructure – Multi-year utility delays for bringing power to industrial sites
- Permitting – Complex, uncertain, and fragmented approval processes
- Incentives – Lacks coordinated attraction packages that other regions, such as those located along the Battery Belt, offer.
- Supply chain – Limited U.S. capacity to produce and process critical minerals at scale.
When regions compete for manufacturers, speed makes all the difference. Companies compare regions primarily on how quickly they can start operating. Speed and certainty outweigh small cost differences.
Introducing BAHRMI
The Bay Area High Road Manufacturing Initiative (BAHRMI) is leading the effort to transform how manufacturing investments and workforce resources are deployed across the region. BAHRMI unites industry, labor, and community partners to build an inclusive, competitive, and sustainable advanced energy manufacturing economy for the Bay Area.
BAHRMI is actively developing pilot projects in Contra Costa County to cultivate high-road battery manufacturing, engaging employers, labor unions, workforce development partners, government, and community stakeholders to design a high-road battery innovation hub that creates quality jobs and builds community wealth.
The opportunity: What employers need
The assessment identifies eight recommendations that could reduce uncertainty, lower costs, and speed timelines for manufacturers. These align directly with BAHRMI’s high-road approach.
- Pre-permitted sites – Manufacturing-ready campuses with pre-negotiated permits and single-point-of-contact approvals
- Shared infrastructure – Facilities with shared waste, water, hazardous materials processing, and pilot-scale manufacturing capacity
- Targeted incentives – Upfront incentives, lower electricity rates, workforce development stimulus, and recycling mandates
- Government procurement – Long-term contracts that create reliable markets for domestically manufactured products
- Workforce development – Coordinated pathways through community colleges, apprenticeships, and on-the-job learning
- Strategic positioning – Focus on early-stage prototyping and commercialization, building on Bay Area R&D strengths
- Community and environmental stewardship – Balance community engagement, environmental protection, and industrial innovation.
The bottom line
California has the talent, innovation, and market demand. What it lacks is the coordinated strategy to turn these assets into manufacturing growth. By investing in pre-permitted sites, shared infrastructure, targeted incentives, and a skilled workforce guided by high-road principles, the Bay Area can become a hub for advanced battery manufacturing that creates good jobs, strengthens regional competitiveness, and supports long-term economic and energy affordability goals.
Download the full employer assessment brief for detailed findings and recommendations.
The employer assessment brief was prepared by Areana Flores of New Energy Nexus. Financial support for convening participants and preparing this report was made possible by the Bay Area High Road Manufacturing Initiative, through a grant from California Jobs First.
Get involved
For updates related to this report, follow BAHRMI’s LinkedIn here.
For questions, reach out to Areana Flores at areana.flores@newenergynexus.com






