WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is actively increasing its homegrown battery manufacturing capabilities in an effort to lessen reliance on China. However, the core issue lies deeper within the supply chain. China continues to lead in the extraction, processing, and essential manufacturing technologies for battery materials used worldwide. While U.S. factories have expanded their capacity, many still depend heavily on imported components and refined minerals. This gap makes graphite, cathodes, anodes, and lithium iron phosphate materials focal points in Washington’s strategic battery development initiatives.
In 2025, China accounted for over 80% of global battery cell production. It also produced roughly 85% of cathode active material and more than 90% of anode active material. The International Energy Agency provided these figures in its 2026 global electric vehicle outlook. Additionally, Chinese manufacturers supplied nearly three quarters of worldwide electric vehicle battery deployment in 2025. This industrial reach extends from raw mineral processing to the assembly of finished cells and complete battery manufacturing equipment.
Despite the fact that the U.S. has outpaced China in percentage growth of battery manufacturing capacity, the country remains highly dependent on imported materials. During 2025, the United States achieved a 100% net import reliance for natural graphite. Over the past four years, China has been among its leading suppliers of graphite, and Chinese processors dominate the production of battery-grade graphite.
China dominates the most critical segments of the battery supply chain
Government funding now aims to address these upstream vulnerabilities, alongside efforts to boost battery assembly. On Aug. 20, the U.S. Department of Energy announced $500 million allocated for seven projects. These initiatives focus on processing critical minerals, manufacturing batteries domestically, and recycling materials within the United States. One project intends to refine materials recovered from used lithium-ion batteries and manufacturing scraps. Others target improving domestic processing capabilities and developing alternative battery materials to enhance U.S. supply resilience.
Tariffs are also part of the strategy to shift sourcing away from China. In 2024, the U.S. increased tariffs on Chinese electric vehicle lithium-ion batteries to 25%. By 2026, tariffs on non-electric vehicle lithium-ion batteries rose to 25%, and Chinese-origin natural graphite faces a 25% tariff rate. These measures target critical points in the electric vehicle and energy-storage supply chains, aiming to reduce dependence on Chinese imports.
Technological partnerships continue to influence the battery landscape
The debate over U.S. battery independence also involves technological collaborations. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan that uses licensed technology from CATL. Ford maintains ownership and control over the factory, while the Chinese company supplies the technology license. U.S. officials renewed their scrutiny of this partnership in September 2026. Lithium iron phosphate batteries are among the most China-dependent battery technologies because Chinese companies dominate both production and key material supply chains.
This supply challenge extends beyond electric vehicles. In 2025, lithium iron phosphate batteries made up more than 90% of global stationary battery storage deployments. While U.S. grid battery capacity continues to grow with increased domestic manufacturing investments, most components are still imported, largely from China. Building cell factories alone only addresses part of the reliance issue. Processing, component manufacturing, graphite supply, and technical expertise remain vital factors in strengthening the U.S. battery supply chain.