WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is ramping up its domestic battery manufacturing efforts in an effort to cut reliance on China. However, the deeper challenge lies within the supply chain. China continues to hold a strong position in the supply of battery materials, processing capabilities, and essential manufacturing technologies used globally. While U.S. factories have expanded their capacity, many still depend heavily on imported components and refined minerals. This reliance has brought graphite, cathodes, anodes, and lithium iron phosphate materials into the spotlight of Washington’s strategic battery initiative.
In 2025, China accounted for over 80% of the world’s battery cell production. It also supplied about 85% of cathode active material and more than 90% of anode active material. The International Energy Agency detailed these figures in its 2026 global electric vehicle outlook. Chinese manufacturers also supplied nearly three-quarters of the global electric vehicle battery deployments in 2025. This extensive industrial ecosystem spans everything from mineral refinement to finished cells and battery manufacturing equipment.
Despite the rapid increase in U.S. battery manufacturing capacity, China still maintains a dominant role. The U.S. saw about a 50% growth in lithium-ion nameplate capacity during 2025. Nevertheless, the country remains highly dependent on imports, with a 100% net reliance on natural graphite in 2025. Over the previous four years, China was one of its main graphite suppliers, and Chinese processors continue to hold a commanding position in the production of battery-grade graphite.
China retains control over the most critical segments of the battery supply chain
Government funding is increasingly directed at addressing these upstream vulnerabilities along with battery assembly. On Aug. 20, the U.S. Department of Energy announced a $500 million investment in seven projects aimed at critical mineral processing, domestic battery manufacturing, and recycling. One initiative will process materials recovered from used lithium-ion batteries and manufacturing scrap, while others focus on domestic processing and developing alternative materials to boost U.S. supply resilience.
Trade tariffs also play a significant role in the U.S. strategy to reduce reliance on China. Tariffs on Chinese electric vehicle lithium-ion batteries increased to 25% in 2024, with non-electric vehicle lithium-ion batteries facing the same rate in 2026. Additionally, a 25% tariff on Chinese natural graphite will take effect in 2026. These measures target products that are vital links in the electric vehicle and energy-storage supply chains.
Ongoing scrutiny of battery technology partnerships
The debate over U.S. battery technology partnerships has intensified. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan that utilizes licensed technology from CATL. While Ford owns and manages the facility, the Chinese battery producer supplies the licensed technology. U.S. authorities renewed their focus on this relationship in September 2026. Lithium iron phosphate batteries remain among the most China-dependent technologies because Chinese firms dominate their production and key material supply chains.
This supply concern extends beyond electric vehicles. In 2025, lithium iron phosphate batteries made up over 90% of all global stationary battery storage installations. U.S. grid battery capacity continues to grow alongside increased domestic manufacturing investments. However, most components are still imported, with China providing a large share of the raw materials. Addressing only cell manufacturing does not eliminate the dependence; processing, component creation, graphite sourcing, and advanced manufacturing expertise remain critical to the U.S. battery supply infrastructure.