WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is boosting its domestic battery manufacturing efforts to lessen reliance on China. However, the larger hurdle lies deeper in the supply chain. China continues to lead in battery materials, processing, and essential manufacturing technologies used globally. U.S. factories have expanded capacity, but many still depend on imported components and refined minerals. This gap has brought graphite, cathodes, anodes, and lithium iron phosphate materials into focus in Washington’s battery strategy.
In 2025, China produced over 80% of the world’s battery cells. It also supplied around 85% of cathode active material and more than 90% of anode active material. The International Energy Agency reported these figures in its 2026 global electric vehicle outlook. Chinese manufacturers also provided nearly three-quarters of the global electric vehicle battery deployments in 2025. This industrial reach spans from refined minerals to finished cells and manufacturing equipment.
The U.S. has grown its battery manufacturing capacity faster than China in percentage terms. During 2025, U.S. lithium-ion nameplate capacity increased by approximately 50%. Still, the country remains heavily reliant on imports for certain materials. The United States had a 100% net import dependence on natural graphite in 2025. China was among its top graphite suppliers in the past four years, and Chinese processors dominate battery-grade graphite production.
China controls the most critical segments of the battery supply chain
Federal funding now targets these upstream vulnerabilities along with battery assembly. The U.S. Department of Energy announced $500 million for seven projects on Aug. 20. These projects focus on critical mineral processing, battery manufacturing, and recycling within the U.S. One initiative will recover and refine materials from used lithium-ion batteries and scrap from manufacturing. Others aim at domestic processing and developing alternative materials to enhance U.S. supply resilience.
Tariffs also play a role in reducing dependence 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 25%. Natural graphite from China will face the same 25% tariff in 2026. These measures target key points in the electric vehicle and energy-storage supply chains.
Technological partnerships face renewed scrutiny
The debate over battery technology partnerships has intensified. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan. The factory uses licensed technology from CATL. Ford owns and manages the plant, while the Chinese battery company supplies the licensed technology. U.S. officials renewed their focus on this relationship in September 2026. Lithium iron phosphate batteries remain highly China-dependent, as Chinese companies dominate production and material supply chains.
This supply challenge extends beyond electric vehicles. In 2025, lithium iron phosphate batteries made up over 90% of global stationary battery storage installations. U.S. grid battery capacity continues to grow, driven by domestic manufacturing investments. Yet, most components are still imported, with China supplying a significant share of those materials. Building cell factories addresses only part of the dependency. Processing, component production, graphite supply, and advanced manufacturing skills are still vital to the U.S. battery supply chain.