WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is expanding domestic battery production as it works to reduce dependence on China. The larger challenge sits deeper in the supply chain. China still dominates battery materials, processing and key manufacturing technologies used worldwide. U.S. factories have added capacity, but many depend on imported components and refined minerals. That gap has placed graphite, cathodes, anodes and lithium iron phosphate materials at the center of Washington’s battery push.
China produced more than 80% of the world’s battery cells in 2025. It also produced about 85% of cathode active material and more than 90% of anode active material. The International Energy Agency reported those shares in its 2026 global electric vehicle outlook. Chinese producers also supplied almost three quarters of global electric vehicle battery deployment in 2025. That industrial scale extends from refined minerals to finished cells and battery manufacturing equipment.
The United States has increased battery manufacturing capacity faster than China in percentage terms. U.S. lithium-ion nameplate capacity grew by about 50% during 2025. Even so, the country remains heavily exposed to imported materials. The United States recorded 100% net import reliance for natural graphite in 2025. China ranked among its leading graphite suppliers during the preceding four years, while Chinese processors hold a dominant position in battery-grade graphite production.
China controls the hardest parts of the battery chain
Federal funding now targets those upstream weaknesses as well as battery assembly. The U.S. Department of Energy announced $500 million for seven projects on Aug. 20. The projects cover critical mineral processing, battery manufacturing and recycling inside the United States. One project will refine material recovered from used lithium-ion batteries and manufacturing scrap. Other projects focus on domestic processing and alternative battery materials designed to strengthen U.S. supply capacity.
Tariffs also form part of the effort to shift sourcing away from China. The United States increased tariffs on Chinese electric vehicle lithium-ion batteries to 25% in 2024. Tariffs on non-electric vehicle lithium-ion batteries rose to 25% in 2026. Natural graphite from China also faces a 25% tariff rate in 2026. Those measures apply to products that sit at critical points in electric vehicle and energy-storage supply chains.
Battery technology ties remain under scrutiny
Technology partnerships have added another layer to the U.S. battery debate. Ford Motor Co. is building a lithium iron phosphate battery plant in Michigan using technology licensed from CATL. Ford owns and controls the factory, while the Chinese battery producer supplies licensed technology. U.S. officials renewed scrutiny of that relationship in September 2026. Lithium iron phosphate batteries remain among the most China-dependent technologies because Chinese companies dominate both their production and key material supply chains.
The supply challenge also reaches beyond electric cars. Lithium iron phosphate batteries accounted for more than 90% of global stationary battery storage installations in 2025. U.S. grid battery capacity has continued to expand alongside domestic manufacturing investment. Yet American battery plants still import most components, with China supplying a large share of those materials. Building cell factories therefore addresses only one part of the dependence. Processing, component production, graphite supply and technical manufacturing expertise remain central to the U.S. battery supply chain.
