WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – In its drive to lessen reliance on China, the United States is ramping up domestic battery manufacturing. However, the core challenge lies deeper within the supply chain, where China still dominates in battery materials, processing, and essential manufacturing technologies used worldwide. While U.S. factories have expanded their capacity, many depend heavily on imported components and refined minerals. This disparity has brought graphite, cathodes, anodes, and lithium iron phosphate materials into focus for Washington’s battery development initiatives.
In 2025, China produced over 80% of the world’s battery cells. It also supplied approximately 85% of cathode active material and more than 90% of anode active material. The International Energy Agency reported these figures in its 2026 global electric vehicle outlook. Additionally, Chinese manufacturers accounted for nearly three quarters of global electric vehicle battery deployment in 2025. This extensive industrial footprint spans from refined minerals to finished cells and manufacturing equipment for batteries.
While the U.S. has outpaced China in percentage growth of battery manufacturing capacity, its exposure to imported materials remains significant. During 2025, the United States achieved a 50% increase in lithium-ion nameplate capacity. Nonetheless, the nation was entirely reliant on imports for natural graphite in 2025. Over the past four years, China has been among its leading graphite suppliers, with Chinese processors controlling a dominant share of battery-grade graphite production.
China maintains control over the most critical segments of the battery supply chain
Recent federal investments aim to address these upstream vulnerabilities as well as battery assembly. The U.S. Department of Energy announced on Aug. 20 a $500 million fund for seven projects focusing on critical mineral processing, domestic battery manufacturing, and recycling. One initiative will process materials recovered from used lithium-ion batteries and manufacturing scrap, while others target domestic processing and alternative battery materials to boost U.S. supply resilience.
Tariff measures also support efforts to reduce reliance on China. The U.S. increased tariffs on Chinese electric vehicle lithium-ion batteries to 25% in 2024. By 2026, tariffs on non-electric vehicle lithium-ion batteries rose to 25%, and natural graphite imports from China face the same rate. These tariffs target key products at critical points in electric vehicle and energy-storage supply chains.
Focus on battery technology partnerships and dependencies
The debate over U.S. battery technology has been complicated further by international partnerships. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan that licenses technology from CATL. Ford owns and manages the factory, but Chinese company supplies the licensed technology. U.S. authorities revisited this arrangement in September 2026. Since Chinese companies dominate both production and supply chains for lithium iron phosphate batteries, they remain highly dependent on China for this critical technology.
This supply issue extends beyond electric vehicles. In 2025, lithium iron phosphate batteries made up more than 90% of global stationary battery storage installations. Despite ongoing investments in domestic manufacturing, U.S. grid battery capacity still relies on imported components, predominantly from China. Addressing this dependency involves more than just building cell factories; processing, component production, graphite supply, and advanced manufacturing expertise are vital to strengthening the U.S. battery supply chain.