Sacramento lithium battery factory says China tariffs will help business, not hurt it

    SACRAMENTO, California (KCRA) -- With the talk of tariffs potentially affecting the economy, California manufacturers are preparing for increases and budget tightening.

But one Sacramento company making lithium batteries says tariffs could help some manufacturers.

"We are not dependent on cobalt or nickel, which are traditionally used in lithium batteries and that supply chain is controlled by China," said CEO Sanjiv Malhorta.

Sparkz is a lithium battery component company, with its newest factory getting ready to go online in Sacramento.

"One hundred percent of the cathode active material is produced in China and Sparkz factory is the first factory to be making the cathode active material in the United States," said Malhorta.

Malhorta says he is re-engineering the supply chain of lithium batteries.

"It was a rude awakening," he said.

When Malhotra worked for the Department of Energy in the Obama and Trump administrations as a battery scientist, he said the U.S. developed the technology, but most of the manufacturing moved to Asia.

"That's why Sparkz essentially is focused on the complete value chain, from making the material to making the cell to making the complete battery pack," said Malhorta.

Sparkz uses the domestic supply chain by getting its materials from West Virginia and California and will soon be making the batteries in Sacramento.

Batteries are used in electric vehicles and other products.

He agrees with President Trump's tariffs on China.

"Go for more. Go for 50%, go for 60%, yes," he said.

The President of the California Manufacturing and Technology Association said if companies don't have to trade internationally, that's better for the state's economy.

"If it's a California start-up with companies and options, it may help them because it depends where the lithium is coming from," said Lance Hastings. "With tariffs, there are always winners and losers, depends on where you are in the equation."

Malhotra wants the U.S. to lead the world in battery manufacturing, not China.

With the tariff talk, he's already picking up new businesses who want it built in America.

"We can match the Chinese pricing and that's what we are offering to our customers today," he said. "We have anywhere between half a dozen to 10 customers who actually have gravitated from China to Sparkz."

Sparkz will be hiring about 200 people for the new Sacramento plant. There will be jobs as operators on the factory floor to management, engineers and scientists.