WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is ramping up its domestic production of batteries as part of an effort to lessen its reliance on China. However, the more significant obstacle lies deeper in the supply network. China continues to control key aspects of the battery materials sector, including processing and essential manufacturing technologies used worldwide. While U.S. factories have boosted their capacity, many still depend heavily on imported components and refined minerals. This gap has made graphite, cathodes, anodes, and lithium iron phosphate materials focal points in Washington’s push to develop a self-sufficient battery industry.
In 2025, China was responsible for over 80% of global battery cell production, while also accounting for about 85% of cathode active material and more than 90% of anode active material. These figures are reported in the International Energy Agency’s 2026 global electric vehicle outlook. Chinese manufacturers supplied nearly three-quarters of worldwide electric vehicle batteries in 2025, with their industrial capacity spanning from refined minerals to finished cells and manufacturing equipment.
The U.S. has seen a faster percentage growth in battery manufacturing capacity than China. During 2025, U.S. lithium-ion nameplate capacity increased by approximately 50%. Despite this progress, the country remains highly reliant on imports for critical materials. In 2025, the U.S. recorded 100% net import dependence for natural graphite. China ranked among its main graphite suppliers over the previous four years, and Chinese processors maintain a dominant role in producing battery-grade graphite.
China holds the most vital segments of the battery supply chain
Federal investments are now targeting these upstream vulnerabilities along with battery assembly. On Aug. 20, the U.S. Department of Energy announced $500 million allocated for seven projects. These initiatives focus on critical mineral processing, domestic battery manufacturing, and recycling within the United States. One project aims to refine material recovered from used lithium-ion batteries and manufacturing scrap, while others emphasize processing domestically sourced materials and developing alternative battery chemistries to enhance U.S. supply resilience.
Tariffs are also part of the strategy to reduce dependency on China. The U.S. increased tariffs on Chinese electric vehicle lithium-ion batteries to 25% in 2024, with tariffs on non-electric vehicle lithium-ion batteries rising to 25% in 2026. Additionally, natural graphite imported from China faces a 25% tariff rate in 2026. These measures target critical points within the electric vehicle and energy-storage supply chains.
U.S. scrutiny of battery technology collaborations persists
Technology partnerships have added an extra layer to the ongoing debate over U.S. battery independence. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan, utilizing technology licensed from CATL. While Ford owns and operates the facility, the Chinese battery producer supplies the licensed technology. U.S. officials renewed their focus on this arrangement in September 2026. Lithium iron phosphate batteries remain among the most China-dependent technologies, as Chinese firms dominate production and key material supply chains.
The supply chain challenge extends beyond electric vehicles. In 2025, lithium iron phosphate batteries accounted for more than 90% of all global stationary battery storage installations. Although U.S. grid battery capacity has continued to grow alongside increased domestic manufacturing investment, most components are still imported, with China supplying a significant portion of those materials. Addressing reliance on imports involves not only building cell factories but also developing processing capabilities, component production, graphite supplies, and technical expertise—elements that remain vital to strengthening the U.S. battery supply chain.