The Trump administration has initiated efforts to strengthen the domestic battery supply chain and decrease reliance on Chinese suppliers, awarding $500 million this August to seven companies working on battery minerals, materials, and recycling. However, industry experts and analysts contend that this funding level is significantly smaller than what would be necessary to meaningfully challenge China’s entrenched position across multiple segments of the battery production ecosystem.
China maintains commanding shares at nearly every stage of battery production, from raw mineral extraction and chemical processing to finished products including electric vehicles and energy storage systems. The country controls approximately 95% of spodumene processing—a critical step in extracting lithium from hard rock—and produces roughly 85% of the world’s EV battery cathode active material and over 90% of anode active material. Industry observers note that establishing comparable scale and capabilities would require decades and hundreds of billions of dollars in investment. The DOE grants represent the initial funding round from two $3 billion programs created under Biden-era infrastructure legislation, though the current administration has simultaneously canceled numerous battery and EV-related policies from the previous administration.
China’s competitive advantages extend beyond supply chain dominance. The country’s EV market demonstrates substantially higher adoption rates, with new energy vehicles accounting for 65% of new car sales in July, compared to approximately 24% in the United States. Chinese manufacturers like CATL have achieved both high revenues and significant profitability through advanced manufacturing and supply chain capabilities. In contrast, several U.S. battery companies funded through the DOE grants are attempting to overcome China’s dominance through technological innovations—such as developing synthetic anodes from domestic silicon sources or extracting lithium from salt water brine to bypass Chinese-controlled processing stages.
The broader policy landscape presents headwinds for battery sector expansion. Since January 2025, nearly $24 billion in announced battery projects have been canceled, according to Atlas Public Policy. The administration’s elimination of federal tax credits for electric vehicles and related funding has coincided with global energy storage demand expanding at an average rate of 70% annually since 2022, with electric vehicles accounting for over 70% of lithium-ion battery deployment worldwide.
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