WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is working to boost its domestic battery manufacturing capacity in an effort to lessen reliance on China. However, the challenge runs deeper into the supply chain, where China maintains a strong hold over battery materials, processing, and critical manufacturing technologies used worldwide. While U.S. factories have expanded their capacity, many still depend heavily on imported components and refined minerals. This disparity has made graphite, cathodes, anodes, and lithium iron phosphate materials central to Washington’s battery strategy.
In 2025, China was responsible for over 80% of the world’s battery cell production. The country also produced about 85% of cathode active material and more than 90% of anode active material. The International Energy Agency documented these figures in its 2026 global electric vehicle outlook. Additionally, Chinese manufacturers supplied nearly three-quarters of the global electric vehicle battery deployment in 2025, reflecting their extensive industrial reach from refined minerals to finished cells and manufacturing equipment.
The US has managed to increase its battery manufacturing capacity at a faster rate in percentage terms than China. During 2025, U.S. lithium-ion nameplate capacity saw growth of approximately 50%. Despite this progress, the country remains highly dependent on imports for key materials. In 2025, the United States was 100% reliant on imports for natural graphite. China ranked among its top graphite suppliers over the past four years, and Chinese processors dominate the production of battery-grade graphite.
China maintains control over the most critical segments of the battery supply chain
Current federal initiatives are aimed at addressing these upstream vulnerabilities as well as battery assembly. On Aug. 20, the U.S. Department of Energy announced $500 million in funding for seven projects focused on critical mineral processing, battery manufacturing, and recycling within the United States. One project will refine materials recovered from used lithium-ion batteries and manufacturing scrap, while others will concentrate on domestic processing and alternative battery materials to bolster U.S. supply resilience.
Tariffs are also part of the strategy to reduce dependence on China. In 2024, the U.S. increased tariffs on Chinese electric vehicle lithium-ion batteries to 25%, and in 2026, tariffs on non-electric vehicle lithium-ion batteries rose to 25%. Additionally, natural graphite imported from China faces a 25% tariff rate in 2026. These measures target products that occupy critical points in electric vehicle and energy-storage supply chains.
Scrutiny over battery technology partnerships continues
Technology collaborations have added complexity to the U.S. battery landscape. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan that uses licensed technology from CATL. Ford owns and manages the factory, while the Chinese battery manufacturer supplies the licensed technology. U.S. authorities renewed their focus on this relationship in September 2026. Lithium iron phosphate batteries are among the most China-dependent technologies, given Chinese dominance in both their manufacturing 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 battery storage installations. Although U.S. grid battery capacity continues to grow with domestic manufacturing investments, most components are still imported, with China supplying a significant share of those materials. Therefore, building cell factories addresses only part of the dependency. Processing, component production, graphite supply, and technical expertise remain crucial elements of the U.S. battery supply chain.