WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – The United States is expanding its battery manufacturing facilities while simultaneously working to reduce reliance on China. Although domestic cell production has increased, significant gaps remain upstream in the supply chain. Chinese firms continue to dominate the global production of various critical materials necessary for lithium-ion batteries, including graphite anodes, cathode components, and lithium iron phosphate technology. The current challenge extends beyond merely assembling batteries, focusing now on securing the minerals, raw materials, and processing capacity essential to sustain those manufacturing plants.
According to the International Energy Agency, China accounted for over 80% of the world’s battery cell production in 2025. The country also produced approximately 85% of cathode active material and more than 90% of anode active material. These components are at the heart of lithium-ion battery manufacturing for electric vehicles and energy storage solutions. The International Energy Agency further identified China as the primary hub for lithium iron phosphate (LFP) batteries, commonly called LFP batteries.
Throughout 2025, U.S. battery manufacturing capacity saw significant growth with new factories opening or existing ones expanding. Nevertheless, the majority of materials still depend heavily on foreign processing or sourcing. Natural graphite exemplifies this ongoing dependency, as the United States reported complete net import reliance for this material in 2025. China remained a major supplier, and Chinese processors continued to dominate the production of battery-grade graphite used in traditional lithium-ion anodes.
Deeper supply chain issues persist with critical materials
The U.S. Department of Energy has allocated new funding to address the most vulnerable parts of the domestic supply chain. In August 2026, it announced $500 million dedicated to seven projects focusing on critical minerals, battery development, and recycling efforts. These initiatives include domestic processing, recovering materials from used batteries, and exploring alternative anode materials. The Department indicated that this funding aims to bolster U.S. capacity at various stages of battery production.
Washington has also increased tariffs on Chinese-made battery products and related materials. For lithium-ion batteries used in electric vehicles, tariffs rose to 25% in 2024. In 2026, the tariff for non-electric vehicle lithium-ion batteries also reached 25%. Additionally, natural graphite imported from China faces a 25% tariff in 2026. These measures target products across sectors such as electric vehicles, consumer batteries, and grid storage, reflecting ongoing demand for lithium-ion technology.
Connections in technology reveal ongoing global supply chain links
Ford Motor Co. exemplifies how U.S. manufacturing remains intertwined with Chinese battery expertise. Ford is establishing an LFP battery plant in Michigan that utilizes licensed technology from CATL. While Ford owns and manages the facility, the battery technology license is held by CATL. Federal authorities renewed attention on this partnership in September 2026. The project underscores the continued influence Chinese firms have over LFP manufacturing knowledge, despite the production being located within the United States.
Demand for batteries extends well beyond passenger vehicles. In 2025, over 90% of the world’s stationary battery storage installations used LFP chemistry. U.S. grid battery capacity has continued to grow as utilities increasingly deploy energy storage to enhance power systems. This expansion underscores the importance of securing supplies of cells, graphite, cathodes, and other essential materials. While new American factories have ramped up final assembly, processing and component manufacturing remain central to the country’s ongoing dependency on Chinese supply chains for battery materials.