The global energy landscape is undergoing a rapid transformation as battery deployment surges for both electric vehicles and grid storage. According to International Energy Agency data, annual battery installations reached 1.5 terawatt-hours last year, a tenfold increase since 2020. This expansion is largely fueled by China’s massive manufacturing scale, which has driven lithium-ion battery costs down by 93 percent since 2010. While nations like the United States and members of the European Union are striving to bolster domestic production to ensure energy security, China remains the dominant force in both manufacturing and mineral processing.
The rapid adoption of battery technology is showing no signs of slowing, with BloombergNEF projecting that annual deployments will double by 2030. While the majority of these batteries currently power electric vehicles, the sector for grid storage is expanding at an even faster rate, having grown by a factor of nearly 19 between 2020 and 2025. This shift has placed batteries at the heart of the modern energy transition, fundamentally changing how electricity is stored and utilized on a global scale.
Despite this growth, the concentration of manufacturing power in China has prompted significant political responses. In the United States, the Inflation Reduction Act sought to incentivize domestic production, a strategy that has seen some success. Even with changes to the law, current policies continue to support cleantech manufacturing and grid storage, often paired with protectionist measures designed to encourage the use of locally sourced batteries. Similarly, the European Union has set an ambitious goal to meet 90 percent of its battery needs domestically by 2030, though current progress suggests this target remains difficult to achieve.
Ultimately, the challenge for Western nations lies in competing with China’s established economies of scale and extensive technical expertise. Because China maintains a critical role in the refining and processing of essential battery minerals, it continues to hold a dominant market position. As global demand for storage solutions continues to climb, the industry is expected to remain characterized by this ongoing tension between the desire for domestic energy independence and the economic reality of China’s manufacturing dominance.