WASHINGTON, DISTRICT OF COLUMBIA / RankWire.AI / – In 2025, the United States significantly expanded its battery manufacturing capacity by opening new plants and advancing existing facilities. Nonetheless, the nation remains heavily dependent on imported materials, particularly those sourced or processed abroad. This reliance is especially evident with natural graphite, where the U.S. reported complete net import dependence for that material in 2025. Chinese firms continue to dominate the supply chain, especially in the production of battery-grade graphite for lithium-ion anodes, despite domestic efforts to develop local sources.
While domestic cell production has increased, major supply gaps persist upstream. Chinese companies maintain leadership in the global output of several critical materials needed for lithium-ion batteries. They control the production of graphite anodes, cathode components, and lithium iron phosphate technology, which are fundamental to electric vehicle batteries and energy storage solutions. The International Energy Agency reports that China produced over 80% of the world’s battery cells in 2025, approximately 85% of cathode active material, and more than 90% of anode active material. Additionally, China is the primary producer of lithium iron phosphate batteries, also known as LFP batteries.
Throughout 2025, U.S. battery manufacturing facilities grew rapidly as companies launched or expanded production lines. However, their reliance on imported materials remains substantial. A clear example is natural graphite, which the U.S. fully relied upon through imports in 2025. China maintained its position as a key supplier, with Chinese processors dominating the manufacturing of battery-grade graphite used in traditional lithium-ion anodes.
Deeper supply chain challenges persist with critical materials
The U.S. Department of Energy has allocated new funding aimed at strengthening the domestic supply chain, particularly in areas still lacking sufficient capacity. In August 2026, the department announced a $500 million investment across seven projects focused on critical minerals, battery technology, and recycling initiatives. These projects include domestic mineral processing, recovering materials from used batteries, and exploring alternative anode materials. The department emphasized that this funding aims to boost the capacity of U.S. industries across various stages of battery manufacturing.
Washington has also increased tariffs on Chinese battery components and raw materials. In 2024, tariffs on lithium-ion batteries for electric vehicles rose to 25%, and by 2026, the same rate applied to non-vehicle lithium-ion batteries. Additionally, natural graphite imported from China faces a 25% tariff in 2026. These measures affect products used not only in electric vehicles but also in consumer electronics and grid storage applications, where demand for lithium-ion technology continues to grow.
Supply chain ties reveal ongoing reliance on Chinese expertise
A notable example is Ford Motor Co., which is developing an LFP battery plant in Michigan utilizing technology licensed from CATL. Ford owns and manages the facility, while CATL supplies the licensed battery technology. Federal authorities renewed their examination of this arrangement in September 2026. The project underscores the ongoing influence of Chinese companies in LFP battery manufacturing knowledge, even when production occurs within the United States.
The demand for batteries extends well beyond electric vehicles. In 2025, over 90% of global stationary battery storage installations used LFP chemistry. As U.S. utilities continue to incorporate storage solutions into their power systems, the importance of secure supplies of cells, graphite, cathodes, and other materials increases. Although new domestic factories have expanded final cell production, processing and component manufacturing remain central to the country’s dependency on China for essential battery materials.