watch now

The Trump administration has been trying to build up the U.S. battery supply chain and reduce its reliance on China. But the funding it has set aside for the effort is small compared with what would be needed to substantially loosen China's grip on the industry, according to analysts and executives who spoke with CNBC. The Department of Energy awarded $500 million this August to seven companies related to battery minerals or materials, manufacturing or recycling. It is part of a much larger push by the administration to secure critical minerals and other materials. It also follows the cancellation of many Biden-era policies that supported battery manufacturing and funding for electric vehicles — by far the largest market globally for battery tech. This is the first round of funding by the Trump administration under two $3 billion DOE battery technology and materials programs that were created through the Biden-era Infrastructure Investment and Jobs Act. Boosting the U.S. battery supply chain had been a high priority for the Biden administration, said Richard Wang, CEO of Voya Energy, a battery technology company. "A lot of those policies have reversed themselves under the Trump administration and/or shifted," he said. The efforts come as China has a majority of the global share of several points along the battery supply chain — from raw minerals and chemicals all the way to finished products like electric vehicles and energy storage systems. "It takes decades and tens, if not hundreds of billions of dollars" to achieve the kind of comprehensive scale across the supply chain that China now has, said Tu Le, founder and managing director of Sino Auto Insights. "We don't have decades. We have five, six, seven years to try to become competitive."

China's dominance in refining

China is a major supplier of several critical minerals used in batteries, including graphite. But its real strength is in refining and processing. The country's share of mineral refining has grown since 2020, according to the International Energy Agency. China used that position as leverage in 2025, when it imposed strict export controls on rare earths and a range of other minerals and processing equipment. Several companies receiving DOE funds target spots where China has a strong presence. Coreshell Technologies, which was awarded $50 million by the department, makes battery anodes — an essential battery component — from domestically sourced silicon, rather than Chinese-sourced graphite. Lilac Solutions, meanwhile, received $100 million. That company has a method for extracting lithium from salt water brine, skipping a common refining process typically needed to get the material from hard rock. The global lithium market grew from about 150,000 metric tons in 2015 to 1.5 million metric tons in 2025, said Raef Sully, CEO of Lilac Solutions. The bulk of that growth came from lithium extracted from hard rock mines in the form of a mineral called spodumene. That rock needs to be processed to extract lithium, and 95% of spodumene processing happens in China, Sully said. "If you use our technology, you're producing battery grade lithium carbonate or hydroxide at the site of production," Sully said. "And you're bypassing that important step, that processing step that China has a chokehold on today." China's dominance continues further down the supply chain. It produces about 85% of the world's EV battery cathode active material and more than 90% of anode active material, according to the IEA. Then it makes 80% of the world's battery cells. The IEA said the lack of investment in these midstream stages in countries like the U.S. "poses a growing risk to global supply security." Scale is one of China's biggest advantages, said Wang, pointing to CATL, the world's largest EV and energy storage battery manufacturer, which is based in China. "They have built up an incredible lead in terms of technology and manufacturing capabilities across the world," he said. "They are one of the only battery companies in the world that's not only high in revenue, but is significantly profitable because of how strong their manufacturing and supply chain capabilities are." That is the competition that any U.S. firm faces. "We have a ton of innovation coming out of the United States," Le said. "These small fledgling companies are super innovative, but getting and building prototypes of what they're trying to sell is one thing. Being able to mass produce them at a high quality level, repeatably in the millions of units is another thing entirely."

Batteries and EVs

EVs are prepared for export overseas through frame transportation in Taicang Port Area, Suzhou Port, Jiangsu Province, China, on May 11, 2026. Costfoto | Nurphoto | Getty Images