Has the United States waited too long to curb China’s dominance of critical minerals?

US President Donald Trump has carried out the largest federal intervention in the critical minerals and rare earths sectors since returning to the White House, announcing a series of deals as Washington intensifies efforts to counter China’s dominance over the minerals underpinning the energy transition and artificial intelligence boom.

The deals included a mix of equity investments and debt financing involving dozens of rare earth companies, with MP Materials and USA Rare Earth among the most prominent beneficiaries.

Last month, Trump unveiled $3 billion in federal investment in critical mineral projects across the country as part of continuing efforts to expand domestic production and decouple from Chinese battery supply chains. The centerpiece of the funding round was a conditional $1.4 billion loan to Sila Nanotechnologies from the Pentagon’s Office of Strategic Capital (OSC), as the California-based startup seeks to ramp up production of next-generation battery materials.

The United States now has a growing number of companies seeking to reinvent electric vehicle batteries. That is hardly surprising, given that EVs are the main driver of critical mineral demand, accounting for more than half of total global demand for critical minerals such as lithium, cobalt and nickel.

Sila Nanotechnologies specializes in battery materials, focusing on the commercialization and large-scale production of silicon-carbon composite (Si/C) anodes to replace conventional graphite in lithium-ion batteries.

Titan Silicon is the company’s flagship product, a nano-engineered silicon anode material designed as a drop-in replacement that can be incorporated directly into existing battery manufacturing processes.

The company says its batteries can deliver up to 40% higher energy density than conventional graphite cells while being lighter and more compact. Commercial-scale production of Titan Silicon began in late 2025, while its Moses Lake facility is targeting enough advanced silicon-carbon anode material to power between 20,000 and 50,000 electric vehicles annually.

Meanwhile, Utah-based Lilac Solutions is seeking to disrupt the mining industry by deploying its patented direct lithium extraction (DLE) technology to recover lithium from brines.

Compared with conventional mining, direct lithium extraction takes one day rather than two years, recovers roughly twice as much lithium, uses 99% less land and consumes significantly less water by eliminating the need for massive evaporation ponds.

“If you use our technology, you’re making battery-grade lithium carbonate or lithium hydroxide on site. So you’re skipping that important step, the processing step, that China really dominates today,” Lilac Solutions CEO Raef Sully told CNBC.

The sudden government push gives the impression that the US critical minerals supply chain is on the verge of becoming enormous. However, concerns are growing that the wave of investment Washington is pouring into the sector may still not be enough to catch up with China.

Decades of Chinese investment reinforce dominance

Decades of government support, strategic infrastructure financing through initiatives such as the Belt and Road Initiative (BRI), and China’s willingness to absorb the substantial environmental costs associated with critical mineral mining and processing have allowed Beijing to dominate both the upstream and downstream segments of the value chain.

China currently accounts for around 60% of global critical mineral mining and more than 90% of the refining and processing of key materials such as rare earths, graphite and gallium.

The Global Critical Minerals Outlook 2025 found that China is the world’s largest refiner of 19 of the 20 most important strategic minerals, with an average market share of 70%.

“To achieve the kind of end-to-end scale across the supply chain that China has now takes decades and tens, if not hundreds, of billions of dollars. We don’t have decades. We have five, six or seven years to try to become competitive,” Tu Le, founder and CEO of Sino Auto Insights, told CNBC.

China already enjoys enormous scale in critical minerals and battery materials, something US startups such as Sila Nanotechnologies and Lilac Solutions will struggle to match.

According to the International Energy Agency, China produces 80% of the world’s battery cells, more than 90% of active anode materials and around 85% of the active cathode materials used in electric vehicle batteries worldwide.

“They’ve built a tremendous lead in terms of technology and manufacturing capabilities around the world. And they’re one of the few battery companies globally that not only has high revenues but also generates significant profits, thanks to the strength of their manufacturing capabilities and supply chains,” Richard Wang, CEO of Voya Energy, told CNBC about CATL, the Chinese company that is the world’s largest electric vehicle battery manufacturer.

Trump policies could undermine the same industry Washington is trying to strengthen

Ironically, some of the Trump administration’s key policies are also likely to hurt the very industry it is working around the clock to strengthen.

By dismantling climate incentives introduced under the Biden administration, the Trump administration has slowed clean-energy investment, weakened consumer demand and thrown renewable energy supply chains into disarray.

One clear example is the sharp decline in US electric vehicle sales after the Trump administration eliminated the $7,500 federal EV tax credit and rolled back fuel economy standards.

US electric vehicle sales fell 27% year-on-year in the first quarter of 2026, marking the second consecutive quarter of steep sales declines since Trump returned to the White House.

A shrinking US electric vehicle market clearly does not bode well for battery materials companies.