WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is actively increasing its domestic battery manufacturing efforts in an effort to lessen reliance on China. However, the challenge lies deeper within the supply network. China continues to lead in the extraction, processing, and production technologies of critical battery materials used worldwide. Although U.S. factories have expanded their output, many still depend heavily on imported components and refined minerals. This dependency has placed graphite, cathodes, anodes, and lithium iron phosphate materials at the forefront of Washington’s battery strategy.
In 2025, China accounted for over 80% of the world’s battery cell production. It also supplied approximately 85% of cathode active material and more than 90% of anode active material. The International Energy Agency documented these shares in its 2026 global electric vehicle outlook. Additionally, Chinese manufacturers provided nearly three-quarters of the global electric vehicle battery deployment in 2025. This extensive industrial reach spans from mineral refinement to finished cells and manufacturing equipment.
While the United States has outpaced China in percentage growth of battery manufacturing capacity, it remains highly dependent on imported materials. During 2025, the U.S. experienced a 50% increase in lithium-ion nameplate capacity. Despite this growth, the country relied entirely on imports for natural graphite in 2025, with China among its main suppliers over the past four years and holding a dominant position in battery-grade graphite processing.
China dominates the most critical segments of the battery supply chain
The federal government now directs funding toward addressing those upstream vulnerabilities, along with battery assembly. On Aug. 20, the U.S. Department of Energy announced $500 million allocated for seven projects. These initiatives include mineral processing, battery manufacturing, and recycling facilities within the United States. One project aims to recover and refine materials from used lithium-ion batteries and manufacturing scrap, while others focus on domestic processing and alternative battery chemistries to bolster U.S. supply capabilities.
Tariffs are also part of the strategy to reduce dependency on China. In 2024, tariffs on Chinese electric vehicle lithium-ion batteries increased to 25%, and by 2026, tariffs on non-electric vehicle lithium-ion batteries will also reach 25%. Chinese-origin natural graphite will face a 25% tariff rate starting in 2026. These measures target products critical to electric vehicle and energy-storage supply chains.
Focus on technology partnerships has heightened concerns
Collaborations in battery technology have added complexity to the U.S. efforts. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan utilizing licensed technology from CATL. Ford owns and manages the facility, while the Chinese company supplies the licensed technology. U.S. authorities renewed scrutiny of this partnership in September 2026. Lithium iron phosphate batteries are among the most China-dependent technologies, given Chinese dominance in both production and key material supply chains.
The supply chain challenge extends beyond electric vehicles. In 2025, lithium iron phosphate batteries made up over 90% of global stationary energy storage installations. While U.S. grid battery capacity continues to grow alongside domestic manufacturing investments, most components are still imported, with China providing a significant share of these materials. Addressing manufacturing of cells is only one part of reducing reliance; processing, component supply, graphite, and technical expertise remain crucial to strengthening the U.S. battery supply chain.