Most electric vehicle batteries are made in China, which produces over three-quarters of all batteries sold globally. South Korea is the second-largest producer, followed by Japan, with the United States and Europe working to build domestic capacity but still far behind.
China’s Dominant Position
China’s lead in EV battery manufacturing is enormous and extends across nearly every part of the supply chain. The country doesn’t just assemble battery cells. It mines and refines the raw materials, manufactures the components that go inside cells, and builds the finished battery packs that power electric cars worldwide. Out of 12 major sectors in the lithium-ion battery supply chain, China leads in 11 of them.
That dominance is especially stark for one popular battery chemistry: lithium iron phosphate, commonly called LFP. These batteries are cheaper, longer-lasting, and increasingly preferred by automakers for standard-range vehicles. China manufactures more than 98% of all LFP batteries globally, making it virtually the sole source for this chemistry.
The single largest battery maker in the world is CATL, a Chinese company headquartered in Fujian province. In 2024, CATL held a 31.7% share of the global EV battery market, producing 339.3 gigawatt-hours of battery capacity. To put that in perspective, CATL alone makes roughly as many batteries as all non-Chinese manufacturers combined. The company supplies batteries to Tesla, BMW, Volkswagen, and dozens of other automakers.
Other major Chinese manufacturers include BYD (which also builds its own electric cars), CALB, and EVE Energy. Together, Chinese companies account for well over half of the world’s top ten battery producers by volume.
South Korea and Japan
South Korean producers supplied over one-fifth of global electric car battery demand in 2024, making the country the clear second-place manufacturer. Three companies drive nearly all of that output: LG Energy Solution, Samsung SDI, and SK On. These firms operate factories not only in South Korea but also in the United States, Europe, and other markets, often through joint ventures with automakers like General Motors, Ford, and Hyundai.
Japanese producers covered nearly 7% of global demand. Panasonic is the most prominent, with a long-standing partnership with Tesla that includes battery plants in Nevada and Kansas. Japanese companies pioneered many of the lithium-ion battery technologies used in EVs today, but they’ve been slower to scale up compared to Chinese competitors. Toyota’s bet on solid-state batteries, a next-generation technology, partially explains Japan’s smaller share of current production.
The US Manufacturing Push
The United States has historically imported the vast majority of its EV batteries, but that picture is changing quickly. The Inflation Reduction Act, passed in 2022, created strong financial incentives for companies to build battery plants on American soil. Tax credits for EV buyers are tied directly to where the battery and its materials come from, pushing automakers and battery makers to localize production.
The result has been a wave of factory announcements. Korean manufacturers account for over 80% of the compliant battery cell capacity being built in the US, reflecting existing partnerships between Korean battery firms and American automakers. LG Energy Solution, SK On, and Samsung SDI all have plants under construction or recently opened across Georgia, Kentucky, Tennessee, and Michigan.
Still, US capacity remains modest compared to China. Analysts at Wood Mackenzie and the American Clean Power Association projected the US would install 49 gigawatt-hours of energy storage across all markets in 2025. That’s a fraction of what China produces, though it represents rapid growth from near zero just a few years ago. By 2026, the US could even have a slight oversupply of domestically made battery cells for the first time.
Europe’s Position
Europe is in a similar position to the United States: heavily dependent on imported cells but investing aggressively in domestic production. Several “gigafactories” are planned or under construction in Germany, Sweden, Hungary, France, and Poland. Sweden-based Northvolt was the continent’s most prominent homegrown battery startup, though it has faced financial difficulties that highlight how challenging it is to compete with established Asian manufacturers on cost and scale.
Most European battery production currently comes from Asian companies operating local plants. CATL runs a factory in Germany, and Samsung SDI and SK On have facilities in Hungary. The European Union has set targets to reduce reliance on Chinese batteries, but building a competitive supply chain from scratch takes years and enormous capital investment.
Why China Is So Far Ahead
China’s dominance didn’t happen by accident. The government identified batteries as a strategic industry more than a decade ago and backed that decision with subsidies, research funding, and guaranteed demand through its own massive EV market. China is the world’s largest market for electric cars, which gave domestic battery makers a huge customer base to scale up against before expanding internationally.
Control over raw materials is another major factor. China refines the majority of the world’s lithium, cobalt, and nickel into battery-grade chemicals, even when those minerals are mined elsewhere. A battery factory in the US or Europe often still depends on Chinese-processed materials, which limits how much geographic diversification actually reduces supply chain risk.
Cost is the final piece. Chinese battery cells are significantly cheaper to produce than those made in the US or Europe, thanks to lower labor costs, larger factory scale, and a more mature supplier ecosystem. Global EV battery usage hit 894.4 gigawatt-hours in 2024, a 27.2% increase over the previous year, and Chinese manufacturers captured most of that growth.