U.S. pushes domestic battery supply as China dominates refining

U.S. domestic – The U.S. is facing a structural battery supply-chain risk: for 19 of 20 strategic critical minerals, China is the leading refiner with an average market share of about 70%. With demand rising from electric vehicles, electronics, AI data centers, grid storage,

For the U.S., the battery race is no longer only about building better lithium-ion cells. It is also about where the materials come from before they ever reach a factory—because a large share of critical minerals is refined outside the country. creating dependency risks that touch national security. economic competitiveness. and the speed of the energy transition.

The imbalance is stark. For 19 out of 20 strategic critical minerals, China is the leading refiner, with an average market share of approximately 70%. In practical terms, that means the supply chain bottleneck isn’t simply mining or extraction. It is the full system that sources and converts minerals into usable inputs.

Demand for critical minerals doesn’t start in the ground; it starts with consumer trends that are reshaping the global economy. The markets growing fastest today share a common dependency: they run on batteries, and batteries run on critical minerals. That links daily life to geopolitical leverage—whether consumers realize it or not.

A handful of sectors are pulling the battery supply chain forward. Electric vehicles remain the most visible and material-intensive driver. Automakers are not just replacing engines with batteries; they are redesigning mobility around energy storage. stretching demand across passenger vehicles. commercial fleets. and heavy-duty applications. Each step toward electrification accelerates the need for lithium, nickel, cobalt, graphite, and manganese.

Consumer electronics added another layer. Lithium-ion demand was first established through consumer devices, and even as devices get smaller, their ecosystems expand. Wearables, smart homes, and always-on connectivity embed batteries deeper into day-to-day life, creating a steady baseline for critical minerals.

Then comes AI—and it is less abstract than it sounds. The growth of artificial intelligence requires a rapid expansion of data centers. Those facilities depend on batteries for backup power. load balancing. and renewable integration. and the data center buildout is significantly increasing battery materials demand.

Grid-scale energy storage is the next pressure point. As renewable energy grows, the need to store and dispatch electricity reliably rises too. Batteries are moving from pilot projects into core infrastructure. which changes how energy systems operate and demands massive volumes of critical minerals.

Defense and national security needs also sharpen the stakes. Batteries now power advanced military systems, electrified vehicles, and portable energy solutions, turning critical minerals from economic inputs into strategic assets.

Even the digital “everywhere” trend feeds into this, through the data infrastructure framework. As digital services scale, the need for resilient, battery-backed power systems grows as well.

While these sectors expand, the battery industry itself is shifting under the weight of supply-chain security. Battery chemistry is evolving based on priorities like cost, safety, and access to materials. The rise of lithium iron phosphate (LFP) reduces reliance on cobalt and nickel. At the same time, next-generation chemistries may introduce entirely new material dependencies.

But the vulnerabilities are not only technical. Highly concentrated supply chains—particularly in Asia—are creating exposure and intensifying the global race to secure domestic sources.

This is not just a procurement problem; it is an industrial growth problem. As demand for lithium-ion batteries accelerates, the global battery energy storage market must expand to keep pace. Experts predict the market will grow from $50.8 billion in 2025 to nearly $106 billion by 2030.

The growth brings a new complication: end-of-life batteries. That is where recycling starts to move from an environmental afterthought to an industrial strategy. Recycling is described as a key lever for creating a more resilient domestic battery industry by enabling a closed-loop system—recovering materials from used batteries. refining them into battery-grade critical minerals. and reintegrating those materials into manufacturing.

The argument is straightforward. Recycling reduces reliance on volatile regions, lowers costs to consumers, and strengthens domestic supply chains, creating the foundation for a more competitive and secure industry.

Advances in recycling and processing are also becoming a timing issue. The push for resilience depends on improvements that raise recovery rates, lower costs, and support scalable operations. In the U.S. recycling and processing capacity is expanding. with capacity expected to grow to 140 GWh by 2030—presented as meaningful progress toward supply chain resilience.

Taken together. the pieces point to the same conclusion: the next decade’s battery competition will be shaped as much by what happens after batteries are used as by what happens before they are produced. Demand is accelerating across electric mobility, electronics, AI data infrastructure, grid storage, and defense needs. And with refining concentration outside the U.S., the “loop” back into domestic materials becomes less optional.

Access to critical minerals is no longer a niche issue. and battery recycling is framed as foundational to closing the loop on the critical mineral supply chain that will define the next decade of innovation. The race, in this telling, is not only to build better batteries. It is to recover these materials, reuse them, and rethink the material systems that make those batteries possible.

David Klanecky is CEO and president of Cirba Solutions.

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