WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is actively expanding its domestic battery production capabilities in an effort to lessen reliance on China. The challenge extends deeper into the supply chain, as China continues to hold a dominant position in the production of battery materials, processing, and essential manufacturing technologies used globally. While U.S. factories have increased their manufacturing capacity, many still depend on imported components and refined minerals, placing graphite, cathodes, anodes, and lithium iron phosphate materials at the forefront of Washington’s efforts to bolster battery independence.
In 2025, China was responsible for over 80% of the world’s battery cell production, approximately 85% of cathode active material, and more than 90% of anode active material, according to the International Energy Agency in its 2026 global electric vehicle outlook. Chinese manufacturers also supplied nearly three-quarters of the global electric vehicle battery deployment in that same year. This extensive industrial reach spans from refined mineral sources to finished cells and manufacturing equipment used in battery production.
The United States has outpaced China in terms of percentage growth in battery manufacturing capacity, with U.S. lithium-ion nameplate capacity increasing by roughly 50% in 2025. Nonetheless, the nation remains significantly dependent on imported materials, evidenced by its 100% net import reliance for natural graphite in 2025. During the previous four years, China ranked among its leading graphite suppliers, and Chinese processors continue to dominate the production of battery-grade graphite.
China controls the most critical segments of the battery supply chain
To address these upstream vulnerabilities, federal funding initiatives now target those areas alongside battery assembly. On August 20, the U.S. Department of Energy announced a $500 million investment for seven projects, focusing on critical mineral processing, battery manufacturing, and recycling activities within the United States. One such project aims to refine materials recovered from used lithium-ion batteries and manufacturing scrap, while others aim to enhance domestic processing and develop alternative battery materials to increase U.S. supply resilience.
Efforts to shift sourcing away from China also include tariffs. In 2024, the U.S. increased tariffs on Chinese electric vehicle lithium-ion batteries to 25%, with those on non-electric vehicle lithium-ion batteries rising to the same level in 2026. Additionally, natural graphite imported from China faces a 25% tariff in 2026. These measures target products that are critical junctures within the electric vehicle and energy-storage supply chains.
Concerns over battery technology partnerships persist
The debate over U.S. battery independence has grown to include technology collaborations, such as Ford Motor Co.’s construction of a lithium iron phosphate battery plant in Michigan utilizing licensed technology from CATL. Ford owns and manages the factory, while the Chinese battery producer supplies the licensed technology. In September 2026, U.S. officials renewed their scrutiny of this arrangement, given that lithium iron phosphate batteries remain among the most China-dependent technologies because Chinese firms dominate their production and key material supply chains.
This supply chain challenge extends well beyond electric vehicles, as lithium iron phosphate batteries represented over 90% of the global stationary battery storage installations in 2025. Although U.S. grid battery capacity has grown alongside increased investment in domestic manufacturing, most components are still imported, with China supplying a significant share of those materials. Therefore, establishing cell factories addresses only part of the dependence; processing, component manufacturing, graphite supply, and technical expertise remain critical issues in the U.S. battery supply chain.