WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – As of 2025, the United States is actively boosting its local battery manufacturing capabilities in an effort to lessen reliance on China. The core of the challenge lies deeper within the supply chain, where China continues to hold a significant share of the market for battery materials, processing, and essential manufacturing technologies used globally. While U.S. factories have expanded their output capacity, many remain dependent on imported components and refined minerals. This gap places graphite, cathodes, anodes, and lithium iron phosphate materials at the heart of Washington’s efforts to develop a domestic battery industry.
In 2025, China accounted for over 80% of the world’s battery cell production. The country also produced approximately 85% of cathode active material and more than 90% of anode active material. The International Energy Agency documented these market shares in its 2026 global electric vehicle outlook. Chinese companies also supplied nearly three-quarters of the worldwide electric vehicle battery deployments that same year, demonstrating their vast industrial footprint from mineral refinement to finished cells and manufacturing equipment.
Despite faster percentage growth in capacity, the United States still remains highly vulnerable to imported battery materials. During 2025, the U.S. relied 100% on imports for natural graphite. Over the previous four years, China was among the leading sources of graphite for the U.S., while Chinese processors dominate the production of battery-grade graphite.
China maintains control over the most critical segments of the battery supply chain
In recent months, federal funding has increasingly aimed to address those upstream vulnerabilities as well as battery assembly. On Aug. 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 will recover and refine materials from used lithium-ion batteries and manufacturing scrap. Other projects are geared toward domestically processing key materials and developing alternative battery chemistries to bolster U.S. supply resilience.
In addition, tariffs are playing a role in shifting sourcing strategies away from China. In 2024, tariffs on Chinese lithium-ion batteries for electric vehicles increased to 25%, and in 2026, tariffs on non-electric vehicle lithium-ion batteries also rose to 25%. China’s natural graphite faces a 25% tariff starting in 2026. These measures are targeted at products critical to electric vehicle and energy storage supply chains, aiming to reduce dependency on Chinese imports.
Technological collaborations continue to influence the U.S. battery landscape
The debate over battery technology partnerships has gained momentum. Ford Motor Co., for example, is constructing a lithium iron phosphate battery plant in Michigan that uses licensed technology from CATL. Ford owns and manages the facility, while the Chinese battery manufacturer provides the licensed technology. In September 2026, U.S. officials renewed their scrutiny of this relationship. Lithium iron phosphate batteries remain among the most China-dependent technologies because Chinese companies dominate both their production and key material supply chains.
This supply challenge extends beyond electric vehicles. In 2025, lithium iron phosphate batteries accounted for more than 90% of global stationary battery storage installations. U.S. grid storage capacity continues to grow alongside domestic manufacturing investments; however, most components are still imported, with China supplying a substantial portion of these materials. Developing domestic cell factories addresses only part of the reliance problem—processing, component manufacturing, graphite supply, and technical expertise remain critical elements of the U.S. battery supply chain.