WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is ramping up its domestic battery manufacturing efforts as part of an initiative to lessen reliance on China. The core difficulty lies deeper in the supply chain, where China continues to dominate the extraction, processing, and essential manufacturing technologies for battery materials used worldwide. While U.S. factories have expanded their output capacity, many still depend heavily on imported components and refined minerals. This reliance has made graphite, cathodes, anodes, and lithium iron phosphate materials central to Washington’s push to develop a resilient battery supply chain.
In 2025, China accounted for over 80% of the world’s battery cell production. It also produced roughly 85% of cathode active materials and more than 90% of anode active materials. According to the International Energy Agency, these figures are part of its 2026 global electric vehicle outlook. Chinese companies also supplied nearly three-quarters of global electric vehicle battery deployments in 2025. This industrial dominance spans from the extraction of refined minerals to the manufacturing of finished cells and battery assembly equipment.
In percentage growth, the United States has outpaced China in expanding its battery manufacturing capacity. During 2025, U.S. lithium-ion nameplate capacity increased by approximately 50%. Despite this progress, the nation remains highly dependent on imported raw materials. In 2025, the U.S. reported 100% net import reliance for natural graphite. During the previous four years, China was among the leading suppliers of graphite to the U.S., and Chinese processors still hold a commanding position in the production of battery-grade graphite.
China maintains control over the most critical segments of the battery supply chain
To address these upstream vulnerabilities, federal funding initiatives now target critical mineral processing as well as battery assembly. The U.S. Department of Energy announced a $500 million investment for seven projects on August 20. These initiatives focus on domestically refining critical minerals, manufacturing batteries, and recycling materials within the United States. One project aims to recover and refine materials from used lithium-ion batteries and manufacturing scrap, while others concentrate on processing domestically sourced materials and developing alternative battery chemistries to boost U.S. supply resilience.
Tariffs also play a strategic role in shifting sourcing away from China. In 2024, the U.S. raised tariffs on Chinese electric vehicle lithium-ion batteries to 25%. By 2026, tariffs on non-electric vehicle lithium-ion batteries increased to the same rate. Additionally, natural graphite imports from China face a 25% tariff in 2026. These measures target products at pivotal points within electric vehicle and energy-storage supply chains, aiming to reduce dependency on Chinese materials and components.
Focus on technology partnerships continues to influence the battery industry
The debate over battery technology partnerships has gained momentum, exemplified by Ford Motor Co.’s construction of a lithium iron phosphate battery plant in Michigan, utilizing technology licensed from CATL. Ford owns and manages the facility, while the Chinese battery manufacturer supplies the licensed technology. U.S. officials renewed their scrutiny of this relationship in September 2026. Lithium iron phosphate batteries remain particularly dependent on China, as Chinese firms dominate both their production and the supply of key materials involved in their manufacturing process.
This supply challenge extends beyond electric vehicles. In 2025, lithium iron phosphate batteries represented over 90% of global stationary energy storage deployments. While U.S. grid battery capacity continues to grow alongside investments in local manufacturing, most components are still imported—primarily from China. Therefore, establishing cell manufacturing facilities addresses only part of the dependency. Processing, component production, graphite supply, and advanced manufacturing skills remain crucial elements of the U.S. battery supply chain that require development.