WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is ramping up domestic battery manufacturing efforts in an effort to lessen reliance on China. The deeper obstacle lies within the supply chain itself, as China continues to dominate in battery materials, processing, and essential manufacturing technologies used worldwide. While U.S. factories have expanded their capacity, many still depend on imported components and refined minerals. This gap has made graphite, cathodes, anodes, and lithium iron phosphate materials focal points in Washington’s battery initiatives.
In 2025, China accounted for over 80% of the world’s battery cell production. It also supplied approximately 85% of cathode active material and more than 90% of anode active material. The International Energy Agency documented these figures in its 2026 global electric vehicle outlook. Furthermore, Chinese companies provided nearly three-quarters of global electric vehicle battery deployment in 2025. This industrial dominance spans from refined minerals to completed cells and battery manufacturing equipment.
The United States has outpaced China in percentage growth of battery manufacturing capacity. During 2025, U.S. lithium-ion nameplate capacity increased by approximately 50%. Despite this progress, the U.S. remains highly vulnerable to imported materials. In 2025, the country was 100% reliant on imports for natural graphite. China was one of its leading graphite suppliers over the past four years, and Chinese processors control a dominant share of battery-grade graphite production.
China dominates the most critical segments of the battery supply chain
Current federal initiatives aim to address these upstream vulnerabilities along with battery assembly. On Aug. 20, the U.S. Department of Energy announced a $500 million investment across seven projects. These projects focus on critical mineral processing, battery manufacturing, and recycling within the United States. One initiative intends to refine materials recovered from used lithium-ion batteries and manufacturing scrap, while others aim to develop domestic processing capabilities and alternative battery materials to bolster U.S. supply resilience.
Tariffs also play a key role in the strategy to reduce reliance on 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 the same rate. Additionally, natural graphite imports from China face a 25% tariff in 2026. These measures target products critical to electric vehicle and energy-storage supply chains.
Focus on battery technology partnerships intensifies
Technological collaborations add complexity to the U.S. battery sector. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan, licensing technology from CATL. Ford owns and manages the factory, but the Chinese battery company supplies the licensed technology. In September 2026, U.S. officials renewed their focus on this relationship. Lithium iron phosphate batteries remain highly China-dependent, as Chinese firms dominate both their production and the key materials involved.
The supply challenge extends beyond electric vehicles. In 2025, lithium iron phosphate batteries made up over 90% of the world’s stationary battery storage installations. While U.S. grid battery capacity has continued expanding alongside investments in domestic manufacturing, most components are still imported, with China supplying a significant share of those materials. Addressing reliance on imported components involves more than just building cell factories—processing, component production, graphite supply, and technical manufacturing expertise continue to be vital parts of the U.S. battery supply chain.