WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – By expanding its local battery manufacturing capabilities, the United States aims to lessen its reliance on China. The core challenge, however, lies deeper within the supply chain, as China continues to lead in the production of battery materials, processing, and essential manufacturing technologies used worldwide. While U.S. factories have increased their production capacity, many still depend heavily on imported components and refined minerals. This gap places particular emphasis on graphite, cathodes, anodes, and lithium iron phosphate materials in Washington’s efforts to bolster battery independence.
In 2025, China was responsible for over 80% of global battery cell production. The country also accounted for approximately 85% of cathode active material and more than 90% of anode active material. The International Energy Agency included these figures in its 2026 global electric vehicle outlook. Additionally, Chinese manufacturers supplied nearly three-quarters of worldwide electric vehicle battery deployment in 2025, covering the entire industrial spectrum from mineral refinement to finished cells and manufacturing equipment.
Despite rapid growth in capacity, the United States has expanded its lithium-ion battery manufacturing at a faster percentage rate than China. During 2025, U.S. lithium-ion capacity increased by about 50%. Nevertheless, the country remains highly dependent on imported raw materials, with 100% net import reliance for natural graphite recorded in 2025. China was one of its main graphite suppliers over the past four years, with Chinese processors maintaining a dominant role in producing battery-grade graphite.
China maintains control over the most critical segments of the battery supply chain
To address these upstream vulnerabilities, federal funding has been directed toward processing and manufacturing stages, as well as recycling. On Aug. 20, the U.S. Department of Energy announced a $500 million investment in seven projects within the United States. These initiatives focus on critical mineral processing, domestic battery manufacturing, and recycling. One project will recover and refine materials from used lithium-ion batteries and manufacturing scrap, while others aim to develop alternative battery materials and expand processing capabilities to boost U.S. supply chain resilience.
Tariffs are also part of the strategic effort to shift away from Chinese sources. In 2024, the U.S. increased tariffs on Chinese electric vehicle lithium-ion batteries to 25%. These tariffs on non-electric vehicle lithium-ion batteries rose to 25% in 2026. Additionally, natural graphite imported from China is subjected to a 25% tariff rate starting in 2026. Such measures target critical points within the electric vehicle and energy-storage supply chains.
Focus on battery technology partnerships remains intense
The debate over U.S. battery independence has become more complex with the involvement of technology partnerships. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan utilizing technology licensed from CATL. Ford owns and manages the factory, while the Chinese company supplies the licensed technology. In September 2026, U.S. officials renewed their scrutiny of this relationship. Lithium iron phosphate batteries continue to be heavily dependent on China, which dominates both their production and key material supply chains.
The supply chain challenge extends beyond electric vehicles. In 2025, lithium iron phosphate batteries made up more than 90% of global stationary battery storage installations. While U.S. grid battery capacity continues to grow alongside domestic manufacturing investments, most components are still imported, with China supplying a significant portion of those materials. Addressing dependency therefore requires more than building cell factories; processing, component manufacturing, graphite supply, and advanced technical expertise remain vital components of the U.S. battery supply ecosystem.