WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is boosting local battery manufacturing efforts as it seeks to lessen reliance on China. However, the core challenge lies deeper within the supply network. China continues to lead in producing battery materials, processing, and essential manufacturing technologies used globally. While U.S. factories have expanded their production capacity, many still rely on imported components and refined minerals. This dependency has made graphite, cathodes, anodes, and lithium iron phosphate materials key focal points in Washington’s battery development strategy.
In 2025, China manufactured over 80% of the world’s battery cells, approximately 85% of cathode active materials, and more than 90% of anode active materials. According to the International Energy Agency, these figures are detailed in its 2026 global electric vehicle outlook. Chinese companies also supplied nearly three-quarters of the global electric vehicle battery deployment in 2025, spanning from mineral refinement to finished cells and manufacturing equipment for batteries.
The United States has outpaced China in percentage growth of battery manufacturing capacity. During 2025, U.S. lithium-ion nameplate capacity increased by roughly 50%. Despite this progress, the U.S. remains significantly dependent on imported materials. In 2025, the country had a 100% net import reliance for natural graphite. China was among the top graphite suppliers for the U.S. in the previous four years, and Chinese processors maintain a dominant role in producing battery-grade graphite.
China’s hold on critical segments of the battery value chain persists
Current federal funding initiatives aim to address these upstream vulnerabilities as well as battery assembly. On Aug. 20, the U.S. Department of Energy announced a $500 million investment in seven projects. These initiatives focus on processing critical minerals, manufacturing batteries, and recycling within the U.S. The funding will also support refining materials recovered from used lithium-ion batteries and manufacturing scrap, along with efforts to develop alternative battery materials to bolster U.S. supply resilience.
Tariffs are also part of the strategy to diversify sourcing away from China. In 2024, the U.S. raised tariffs on Chinese electric vehicle lithium-ion batteries to 25%. In 2026, tariffs on non-electric vehicle lithium-ion batteries increased to 25%, while natural graphite from China will face the same tariff rate. These measures target essential products within the electric vehicle and energy-storage supply chains.
Tech partnerships are under renewed examination
The debate over U.S. battery technology partnerships continues to evolve. Ford Motor Co. is constructing a lithium iron phosphate battery plant in Michigan, utilizing licensed technology from CATL. Ford owns and operates the facility, while the Chinese battery producer supplies the licensed technology. In September 2026, U.S. officials renewed scrutiny of this partnership. Lithium iron phosphate batteries remain highly China-dependent, with Chinese companies dominating their production and key material supply chains.
This supply issue 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 has grown alongside investments in domestic manufacturing. However, most components for American batteries are still imported, with China providing a significant share of those materials. Therefore, building cell factories is only one aspect of reducing dependence; processing, component production, graphite supply, and technical manufacturing expertise remain critical components of the U.S. battery supply chain.