The Trump administration has prioritized reducing U.S. dependence on China for battery production by distributing $500 million in Department of Energy funding this August to seven companies involved in battery minerals, materials, manufacturing, or recycling. This initiative represents the first phase of two $3 billion DOE programs established through the Biden-era Infrastructure Investment and Jobs Act. However, industry analysts and company executives contend that the allocated funding falls significantly short of what would be necessary to meaningfully diminish China’s substantial control over the global battery industry.
China maintains commanding positions across multiple segments of the battery supply chain, from raw mineral extraction to finished product manufacturing. The country controls approximately 95% of spodumene processing, produces roughly 85% of the world’s EV battery cathode active material, manufactures over 90% of anode active material, and supplies 80% of global battery cells. In 2025, China imposed strict export controls on rare earths and other critical minerals, leveraging its processing dominance. Tu Le, founder of Sino Auto Insights, noted that establishing competitive capabilities equivalent to China’s current scale would require five to seven years and tens or hundreds of billions of dollars.
Companies receiving DOE funding are targeting areas where China holds particular advantages. Coreshell Technologies obtained $50 million to develop battery anodes from domestically sourced silicon rather than Chinese graphite. Lilac Solutions received $100 million for a method to extract lithium directly from salt water brine, bypassing the conventional processing stage controlled predominantly by Chinese facilities. The global lithium market expanded from approximately 150,000 metric tons in 2015 to 1.5 million metric tons in 2025, with most growth derived from hard rock mining requiring Chinese processing.
Meanwhile, the Trump administration has reversed or modified several Biden-era battery and electric vehicle support policies, including federal tax credits. According to Atlas Public Policy, nearly $24 billion in announced battery projects have been canceled since January 2025. This reversal contrasts with China’s aggressive EV market development, where new energy vehicles represented 65% of car sales in July, compared to approximately 24% of U.S. sales in the second quarter of 2026. China’s dominance extends to manufacturing scale and profitability, with companies like CATL establishing significant technological and production advantages that U.S. competitors have yet to replicate at comparable volumes.
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