Advanced battery and energy-storage manufacturing

Advanced battery and energy-storage manufacturing covers the chain from processed minerals and active materials to cells, packs, battery-management systems and stationary storage. It is not one manufacturing stage. Concentration, substitution and policy exposure differ across mining, refining, anodes, cathodes, cell production, pack integration and recycling.

Supply chain

Lithium-ion systems use several chemistries. Lithium iron phosphate avoids nickel and cobalt, while nickel-rich chemistries trade higher energy density against different material requirements. Sodium-ion and other alternatives may change demand for individual minerals but do not automatically replace existing cell plants, equipment, intellectual property or supplier networks.

The International Energy Agency's 2024 report provides a dated baseline. It estimated that China undertook well over half of global lithium and cobalt processing and held almost 85 per cent of global battery-cell production capacity. Those figures describe different denominators and stages in 2024. They should not be repeated as a timeless share of mining, all storage equipment or installed batteries.

Policy and leverage

Concentration creates exposure to disruption, licensing, price changes and industrial policy. China's graphite export-control announcement introduced licence requirements for specified graphite items. Since 3 December 2024, China has also applied stricter end-user and end-use review to covered graphite exports to the United States. This is not the same legal treatment as the general presumption against licensing certain other dual-use items for the United States. A licensing system is not a comprehensive export ban, and an announced security rationale does not by itself prove coercive use in a particular case. Any claim about denial must identify the controlled product, licence decision, destination and date.

The United States uses tax and subsidy conditions, including rules concerning a foreign entity of concern, to shift investment and sourcing. The European Union Batteries Regulation establishes requirements across sustainability, labelling, due diligence, performance and end-of-life management on a staged timetable. Regulation (EU) 2025/1561 postponed application of its battery due-diligence obligations from 18 August 2025 to 18 August 2027. These measures can support Friend-shoring and de-risking, but industrial policy, product regulation and export control have different authorities and effects.

Recycling adds another time horizon. Recovered lithium, nickel, cobalt, copper and graphite can reduce demand for newly mined material, but usable secondary supply depends on the stock of batteries reaching end of life, collection rates and recovery economics. Recycling policy can improve resilience gradually. It cannot immediately replace primary and refined inputs during a rapid expansion of electric-vehicle and storage demand.

Strategic assessment

Batteries can strengthen resilience by supporting electric transport, backup power and short-duration grid balancing. Dependence on imported cells or materials can also transmit supply shocks into transport and electricity systems. The exposure is not equivalent to dependence on a continuously supplied fuel: batteries are durable manufactured goods, inventories can buffer disruption, and chemistries can substitute imperfectly over time.

The most defensible analysis maps each stage separately. Graphite processing, anode materials and export controls concerns a different bottleneck from Lithium, cobalt and nickel refining and downstreaming, while cell assembly and pack integration may be more geographically mobile. Announced factories are not operating capacity. Subsidised capacity is not necessarily cost-competitive output. Assessment should record commissioning, utilisation, yield, chemistry and origin before concluding that a supply chain has diversified or that one state can exercise decisive leverage.

See also

Green-transition and critical-supply leverage · Graphite processing, anode materials and export controls · Lithium, cobalt and nickel refining and downstreaming · Friend-shoring and de-risking

Sources

1. International Energy Agency, *Batteries and Secure Energy Transitions* (25 April 2024).
2. European Union, Regulation (EU) 2023/1542 concerning batteries and waste batteries (12 July 2023, consolidated text accessed 30 July 2026).
3. United States Department of Energy, Final interpretive guidance on the definition of foreign entity of concern (3 May 2024).
4. Ministry of Commerce of the People's Republic of China, Explanation of graphite export controls (26 October 2023).
5. European Union, Regulation (EU) 2025/1561 postponing battery due-diligence obligations (18 July 2025).
6. Ministry of Commerce of the People's Republic of China, Announcement No. 46 on strengthened controls for specified dual-use exports to the United States (3 December 2024).