WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is boosting its homegrown battery manufacturing capabilities as part of an effort to lessen reliance on China. The core issue, however, lies deeper within the supply chain. China continues to dominate the extraction, processing, and key technological stages of battery materials used globally. While American factories have expanded their capacity, many still rely heavily on imported components and refined minerals. This disparity has brought graphite, cathodes, anodes, and lithium iron phosphate materials into sharp focus as critical elements of Washington’s battery development agenda.
In 2025, over 80% of the world’s battery cells were produced in China. The same country was responsible for approximately 85% of cathode active materials and more than 90% of anode active materials. According to the International Energy Agency, these figures are outlined in its 2026 global electric vehicle outlook. Furthermore, Chinese manufacturers supplied nearly three quarters of the worldwide electric vehicle battery deployments in 2025. This expansive industrial footprint includes everything from mineral refinement to finished cells and manufacturing equipment.
Meanwhile, the United States has achieved a faster percentage growth in battery manufacturing capacity than China. During 2025, U.S. lithium-ion nameplate capacity increased by about 50%. Yet, the country remains significantly dependent on imported materials. In 2025, the United States had a 100% net import reliance for natural graphite. Over the past four years, China has been among its major graphite suppliers, with Chinese processors maintaining a dominant position in the production of battery-grade graphite.
China maintains control over the most critical segments of the battery supply chain
The U.S. Department of Energy has recently directed federal funding towards addressing these upstream vulnerabilities, alongside efforts to boost battery assembly. On August 20, it announced $500 million dedicated to seven projects focusing on critical mineral processing, battery manufacturing, and recycling within the United States. One initiative aims to refine material recovered 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.
Tariffs are also an important element in the strategy 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 level. Additionally, natural graphite imports from China face a 25% tariff rate in 2026. These measures target products that occupy critical positions within electric vehicle and energy-storage supply chains.
Focus on battery technology partnerships and dependency concerns
Technology collaborations have further complicated the U.S. battery landscape. Ford Motor Co. is constructing a lithium iron phosphate battery factory in Michigan that uses licensed technology from CATL. Ford owns and operates the facility, while the Chinese battery manufacturer supplies the licensed technology. U.S. authorities renewed their focus on this partnership in September 2026. Lithium iron phosphate batteries remain among the most China-dependent technologies because Chinese companies dominate both their production and the supply chains of key materials.
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 domestic manufacturing investments have contributed to the ongoing expansion of U.S. grid battery capacity, most components are still imported, with China representing a large share of those supplies. Therefore, building battery cell factories addresses only part of the dependency; processing, component manufacturing, graphite supply, and technical expertise continue to be central elements of the American battery supply chain.
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