The American EV dream still relies on China
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The U.S. has been investing feverishly in recent years to create a domestic supply chain for electric vehicles and reduce its dependence on foreign countries, but it's far from complete.
Why it matters: Despite more than $130 billion in EV investments in the U.S., big gaps in the supply chain — mostly in mining and refining — have left America vulnerable to an escalating trade war with China.
Catch up fast: With trade tensions rising, China is leveraging its control of critical minerals and refining technology to disrupt American supply chains for everything from cars and electronics to missiles and robots.
- Beijing has tightened export controls on rare earth minerals and magnets that are essential for electric motors, for example, and graphite, a critical material for battery anodes.
- Many other vital battery materials, including lithium, cobalt and nickel, are also mined and refined in China, or by companies under Chinese influence.
Where it stands: U.S. companies trying to reshore the EV supply chain have made a lot of progress in a short period of time.
- Between 2019 and 2025, the industry announced investments of $38 billion for new EV assembly plants and $93 billion for battery manufacturing, according to the Alliance for Automotive Innovation.
Between the lines: That rapid growth was spurred, in large part, by huge manufacturing tax credits signed into law during the Biden administration, and strict battery sourcing rules tied to consumer tax credits for EV purchases.
- But some carmakers also just want more control over their supply chains after getting burned by semiconductor shortages and other pandemic-related disruptions in recent years.
- General Motors, in particular, has been investing heavily in upstream battery suppliers to minimize risk.
The latest: Battery materials company Sila on Tuesday began ramping production of a new American-made next-gen silicon-based anode at a plant in Moses Lake, Washington.
- "This factory is exactly what is needed at this moment," Sila CEO Gene Berdichevsky tells my Axios Pro colleague Katie Fehrenbacher.
Yes, but: Parts of the domestic supply chain are still missing and can't be filled quickly or easily.
Raw minerals: Natural resources aren't distributed equally around the world.
- The U.S. has substantial lithium deposits, but it's difficult to extract them because of various regulatory, environmental and technical obstacles.
- The Thacker Pass mine in Nevada, operated by Lithium Americas, is projected to be North America's largest lithium source, producing up to 60,000 tons per year.
- Other companies are in various stages of lithium mine development, from active production to exploration and permitting.
- "You can't just switch a mine on," said Adam Webb, head of battery raw materials at Benchmark Mineral Intelligence. "From the point of discovery, it could take 10 to 20 years to bring that into production. It's a long game."
Refining: Even if the U.S. does expand its mining capabilities, it lacks the refining capacity to turn those resources into battery-grade materials.
- Refining raw minerals is like turning raw sugar cane into fine white crystals or turning crude oil into gasoline — it requires specialized facilities that the U.S. doesn't have.
- "That processing is not trivial. It takes a lot of water, energy and other chemicals to make the materials we need for battery specifications," says Robert Lee, CEO of LG Energy Solution, which is investing more than $20 billion in U.S. battery manufacturing.
Battery components: China handles almost all midstream production of battery cathodes, anodes and foil separators as well as permanent rare-earth magnets for electric motors.
- Yes, but: Various companies are aiming to close this gap with new production facilities in North America.
- Both GM and Honda, for example, have deals with South Korea's Posco Future M to produce cathode materials in Canada.
- And Redwood Materials, which is producing cathode materials at a pilot plant in Nevada, plans to scale up dramatically with a new South Carolina facility starting in 2026.
- Meanwhile, GM is partnering with two different companies, MP Materials and eVAC Magnetics, to begin producing rare earth magnets in Texas and South Carolina.
What's next: Battery recycling could be a long-term solution, using minerals salvaged from end-of-life EVs to create a circular supply chain. But that's still a long way off.
