Ben Taulli and Joshua Busby
US dependence on China for critical minerals and battery supply chains represents a national security risk, leaving the country potentially vulnerable to military supply chain disruptions, coercion, cyber threats, and risks to key economic sectors. While it is well understood that China dominates key segments of the global market, the degree of US reliance on Chinese suppliers remains unclear due to data limitations.
Current trade data fails to capture firm-level dependencies and market concentration fully, impeding policymakers’ ability to make informed decisions. This brief examines the global battery supply chain, identifies gaps in trade data, and outlines four key recommendations for improving US tracking of import reliance.
Global Battery Supply Chain and Chinese Market Dominance
China holds a commanding position in the global battery supply chain, controlling a substantial share of the entire value chain from upstream mineral extraction and refinement to downstream anode, cathode,
and finished battery production. Much of the publicly available data on Chinese production, however, does not provide an accurate picture of US dependence on Chinese suppliers. More data is required to drive the nuanced policymaking required to grow the US battery supply chains and learn from China where applicable.
Much of China’s production is directed towards its domestic market, and existing trade data does not account for firm-level details or the role of Chinese firms operating through foreign subsidiaries.
The US imports nearly three-quarters of its lithium-ion batteries from China. Less well known is that only about 30% of electric vehicle lithium-ion batteries are imported, the rest are already produced domestically. The US has specific dependencies on China for graphite but Chinese presence in US supply chains for other midstream commodities such as nickel and manganese is less significant.
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