WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – Amidst efforts to expand domestic battery manufacturing, the United States continues to face significant reliance on China for critical raw materials. While local cell production has seen growth, key supply chains further upstream remain fragile, with Chinese firms maintaining a leading position in the global production of various essential materials for lithium-ion batteries. This dominance encompasses graphite anodes, cathode materials, and lithium iron phosphate technology. The current challenge involves more than just assembling batteries; it also requires securing the minerals, components, and processing capabilities that sustain those manufacturing plants.
In 2025, Chinese manufacturers accounted for over 80% of the world’s battery cells, as reported by the International Energy Agency. They also produced roughly 85% of cathode active materials and over 90% of anode active materials. These components are fundamental to lithium-ion battery production for electric vehicles and energy storage solutions. Additionally, China remains the primary hub for lithium iron phosphate batteries, commonly called LFP batteries, as per the same agency.
During 2025, U.S. battery manufacturing capacity experienced significant growth through the launch and development of new facilities. Nevertheless, the nation’s factories still predominantly depend on imported or processed materials from abroad. Natural graphite exemplifies this dependency, with the U.S. reporting complete net import reliance on this material in 2025. China continued to be a major supplier, and Chinese processors maintained dominance in the production of battery-grade graphite used in traditional lithium-ion anodes.
Addressing the core supply chain challenges with critical materials
The U.S. Department of Energy has allocated new funds to strengthen the supply chain segments that remain underdeveloped domestically. In August 2026, the department announced a $500 million investment across seven projects focused on critical minerals, battery technology, and recycling initiatives. These projects aim to enhance domestic processing, recover materials from used batteries, and explore alternative anode materials. The department states that this funding is intended to boost national capacity at various stages of battery manufacturing.
In addition, the U.S. has increased tariffs on Chinese battery-related products. The tariff on lithium-ion batteries for electric vehicles was raised to 25% in 2024, with a similar rate applying to non-electric vehicle lithium-ion batteries in 2026. Natural graphite from China faces a 25% tariff starting in 2026. These measures target products used across the electric vehicle sector, consumer batteries, and grid storage, all of which continue to see high demand for lithium-ion technology.
Supply chain ties reveal ongoing reliance on Chinese expertise
Ford Motor Co. exemplifies the persistent link between U.S. manufacturing and Chinese battery technology. The automaker is establishing an LFP battery plant in Michigan that utilizes technology licensed from CATL. Ford owns and manages the facility, while CATL supplies the licensed battery technology. In September 2026, federal officials renewed their focus on this arrangement. The project underscores how Chinese companies still hold critical knowledge in LFP manufacturing, even when production occurs within the United States.
Demand for batteries extends far beyond passenger vehicles. In 2025, LFP chemistry accounted for more than 90% of global stationary energy storage installations. As U.S. utilities continue to increase grid-scale storage, the importance of reliable supplies of cells, graphite, cathodes, and other key materials grows. Although new U.S. factories have expanded final assembly, processing and component manufacturing remain central to the country’s continued reliance on Chinese materials for battery production.