WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is actively scaling up local battery manufacturing as part of its strategy to lessen reliance on China. The more significant obstacle lies deeper within the supply chain, where China continues to dominate the production of battery materials, processing, and essential manufacturing technologies used worldwide. While U.S. factories have expanded capacity, many still depend heavily on imported components and refined minerals. This reliance has brought graphite, cathodes, anodes, and lithium iron phosphate materials into sharp focus for Washington’s battery development efforts.
In 2025, over 80% of the world’s battery cells were produced by China, which also supplied approximately 85% of cathode active material and more than 90% of anode active material. According to the International Energy Agency, these figures are detailed in its 2026 global electric vehicle outlook. Chinese manufacturers also provided nearly three quarters of global electric vehicle battery deployment in 2025, with their industry spanning refined minerals, finished cells, and manufacturing equipment.
Although U.S. battery manufacturing capacity, measured by nameplate figures for lithium-ion, increased by about 50% in 2025, the nation remains highly dependent on imports. In 2025, the U.S. had a 100% net import reliance for natural graphite. During the previous four years, China was among its primary graphite suppliers, and Chinese processors maintain a dominant position in producing battery-grade graphite.
China controls the most critical segments of the battery supply chain
The U.S. Department of Energy has recently directed funds to address these upstream vulnerabilities alongside battery assembly. On Aug. 20, it announced $500 million for seven projects focusing on critical mineral processing, battery manufacturing, and recycling within the United States. One initiative aims to refine materials recovered from used lithium-ion batteries and manufacturing scrap, while others target domestic processing and alternative battery materials to enhance U.S. supply resilience.
Tariffs are also central to efforts to diversify sourcing away from China. In 2024, the U.S. increased tariffs on Chinese electric vehicle lithium-ion batteries to 25%, and by 2026, tariffs on non-electric vehicle lithium-ion batteries rose to the same rate. Additionally, natural graphite from China faces a 25% tariff in 2026. These measures target products at crucial points in the electric vehicle and energy-storage supply chains.
Focus on battery technology partnerships remains intense
Technology collaborations add complexity to the U.S. battery industry. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan utilizing licensed technology from CATL. Ford owns and manages the plant, while the Chinese battery maker supplies the licensed technology. U.S. officials renewed their focus on this relationship in September 2026, as lithium iron phosphate batteries continue to be heavily reliant on Chinese dominance in 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 the global stationary battery storage installations. While U.S. grid battery capacity has grown alongside domestic manufacturing investments, most components are still imported, with China remaining a significant supplier. Developing cell factories is only one step; processing, component manufacturing, graphite supply, and technical expertise remain critical to building a resilient U.S. battery supply chain.