WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – Amid global efforts to diversify and secure critical supply chains, the United States is actively expanding its domestic battery manufacturing capabilities in an effort to lessen reliance on China. However, the core challenge lies deeper within the supply chain, where China continues to hold sway over battery materials, processing techniques, 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 disparity has placed particular focus on graphite, cathodes, anodes, and lithium iron phosphate materials in Washington’s push for battery self-sufficiency.
In 2025, China was responsible for over 80% of the world’s battery cell production. The country also produced roughly 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 supplied nearly three-quarters of the global electric vehicle battery deployment in 2025, with their industrial footprint extending from refined minerals to finished cells and manufacturing equipment.
Despite the rapid growth in U.S. battery manufacturing capacity, the country remains vulnerable due to reliance on imported raw materials. During 2025, the United States was entirely dependent on imports for natural graphite, with a 100% net import reliance. Over the previous four years, China ranked among the top graphite suppliers to the U.S., and Chinese processors continue to dominate battery-grade graphite production.
China retains control over the most critical segments of the battery supply chain
To address these vulnerabilities, federal investments now target upstream weaknesses as well as battery assembly. On August 20, the U.S. Department of Energy announced $500 million dedicated to seven projects focusing on critical mineral processing, battery manufacturing, and recycling within the United States. One initiative aims to recover and refine materials from used lithium-ion batteries and manufacturing scrap, while others focus on domestic processing and developing alternative battery materials to enhance U.S. supply resilience.
Part of this strategy also involves imposing tariffs to incentivize sourcing away from China. In 2024, tariffs on Chinese electric vehicle lithium-ion batteries increased to 25%, and by 2026, tariffs on non-electric vehicle lithium-ion batteries will also rise to 25%. Additionally, Chinese-origin natural graphite is subject to a 25% tariff rate starting in 2026. These measures target critical points in the electric vehicle and energy-storage supply chains, aiming to curb dependency on Chinese imports.
Concerns about technological partnerships persist in U.S. battery development
The debate over battery technology partnerships has added complexity to the U.S. strategy. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan that utilizes technology licensed from CATL. Ford owns and manages the factory, while the Chinese battery manufacturer supplies the licensed technology. In September 2026, U.S. officials renewed their focus on this relationship. Lithium iron phosphate batteries remain highly dependent on China, as Chinese companies dominate both their manufacturing and the supply of key materials.
This supply chain challenge extends beyond electric vehicles. In 2025, lithium iron phosphate batteries represented over 90% of global stationary battery storage deployments. While U.S. grid battery capacity continues to grow in tandem with domestic manufacturing investments, most components are still imported, with China supplying a substantial share. Thus, establishing cell factories alone does not eliminate dependence, as processing, component production, graphite sourcing, and technical expertise remain critical to strengthening the U.S. battery supply chain.