China is the default source. China accounted for over 80% of battery cell production and over 80% of lithium-ion capacity in 2025 (IEA Global EV Outlook 2026).
Is China still the default source for lithium-ion batteries?
Yes. A lithium-ion battery is a rechargeable battery in which lithium ions move between a cathode and an anode, and China makes most of the world's supply: it accounted for over 80% of battery cell production in 2025, according to the International Energy Agency (IEA). Global nameplate lithium-ion manufacturing capacity exceeded 4 TWh (terawatt-hours of annual output) at the end of 2025. China held over 80% of it; the European Union and the United States held 6–7% each (IEA, Global EV Outlook 2026). The IEA figures cover all lithium-ion production, with an electric-vehicle focus.
China's lead is widest in LFP (lithium iron phosphate), the chemistry that dominates storage. LFP made up over 55% of EV batteries deployed and over 90% of stationary storage installations in 2025 (IEA), and China holds about 98% of global LFP cell capacity, about 65% of NMC (nickel manganese cobalt) cell capacity and about 90% of cathode and anode active-material capacity (HKUST Li & Fung Supply Chain Institute, December 2025, citing IEA).
One global figure is often misread. Chinese producers supplied almost 75% of global electric-car battery deployment in 2025, but just over 5% of the US EV battery market (IEA). US EV battery supply runs largely through Korean, Japanese and domestic plants. That US exception applies to EV cells, not to the small-format packs most importers buy, which remain overwhelmingly Chinese; no source quantifies that consumer-pack share.
Where lithium batteries are made in China
Cell production is concentrated in a few provinces. CATL (Contemporary Amperex Technology Co., Limited) is headquartered in Ningde, Fujian; BYD is headquartered in Shenzhen, Guangdong. Together they supplied about 55.7% of global EV battery installations in January–July 2025 (HKUST, citing CNEVPost). They are named here as market structure, not as suppliers. Large cell bases also operate in Sichuan, Jiangsu and Anhui.
Consumer and small-format cells and packs (power banks, tool packs, e-bike packs) are widely described as concentrated in the Pearl River Delta, around Shenzhen, Dongguan and Huizhou. That is practitioner knowledge; no document source for the concentration has been found, so treat it as a starting point for research rather than a mapped fact.
How production is organized: cells, packs, MOQ and lead time
The industry splits into two tiers. Cell makers produce cylindrical, prismatic or pouch cells. Pack assemblers, often smaller Shenzhen and Dongguan firms, buy cells and add a BMS (battery management system — the circuit that monitors voltage, current and temperature), wiring and an enclosure. Most small importers buy from pack assemblers or from OEM/ODM brands and rarely from a tier-1 cell maker, which sells in large volumes under supply agreements.
- OEM (original equipment manufacturer) means the factory builds to the buyer's specification and branding.
- ODM (original design manufacturer) means the factory's existing design carries the buyer's brand. For packs this usually means an existing cell, BMS and enclosure design relabeled, so the buyer should ask for that exact model's UN 38.3 test summary.
MOQ (minimum order quantity) is set per model and per custom feature: a custom BMS, enclosure tooling or printing each raises it, and off-the-shelf ODM packs carry lower MOQs than custom designs. Lead time is driven by cell availability, any tooling, certification testing (UN 38.3, UL or IEC), and dangerous-goods freight booking, which has fewer sailings and carriers than general cargo.
Cost is driven by lithium carbonate and cathode prices, chemistry (LFP or NMC), cell grade (A-grade versus B-grade or reclaimed cells), BMS complexity, certification and dangerous-goods surcharges. The IEA reports that lithium prices in early 2026 were more than twice those of early 2025, so a quote built in 2025 may be stale. Structurally, battery pack prices in China were 30% lower than in North America and 35% lower than in Europe in 2025, and production costs in Europe and the US are "still as much as 50% higher than in China" (IEA). That is a cost comparison between regions, not a price quote.
US compliance: UN 38.3, dangerous goods and product safety
UN 38.3 and the test summary
Lithium cells and batteries must pass the tests in the UN Manual of Tests and Criteria, Part III, sub-section 38.3 before transport. Under 49 CFR 173.185(a)(3), "each manufacturer and subsequent distributor" of lithium cells or batteries made on or after January 1, 2008 must make a test summary available on request. An importer that distributes the batteries is a distributor. The summary lists the manufacturer, test lab, test report ID and date, the cell or battery description (watt-hour rating and mass), each test with its pass or fail result, the Manual edition and a responsible person (PHMSA, Lithium Battery Test Summary, 2024). Button cells installed in equipment are excepted.
Ocean, air and ground transport
Lithium batteries are Class 9 dangerous goods. Shippers need the correct UN number (3480 for lithium-ion batteries shipped alone, 3481 for batteries packed with equipment, or 3090 and 3091 where those entries apply), approved packaging, marks and a dangerous goods declaration. Forwarders commonly require the UN 38.3 test summary and an MSDS (material safety data sheet) before they will book.
For air freight, vendor summaries of the IATA Dangerous Goods Regulations, 67th edition, report that from January 1, 2026, lithium-ion batteries packed with equipment (UN 3481) above 2.7 Wh, and battery-powered vehicles above 100 Wh, must ship at no more than 30% state of charge. Batteries shipped alone were already limited. Confirm the exact wording against the DGR text before relying on it.
Product safety
UL standards, such as UL 2054 for household packs and UL 2271 or UL 2849 for e-mobility, are generally voluntary at the federal level but are often required by retailers, marketplaces, insurers or local law. Mandatory federal and local rules for e-bike batteries have not been confirmed in the research for this page. Packs with Bluetooth or app connectivity, and chargers with digital circuitry, also fall under FCC Part 15 equipment authorization.
Tariffs on Chinese lithium-ion batteries, as of October 2026
US duty on a Chinese lithium-ion battery is built in layers. Each layer has its own legal instrument, and a licensed customs broker should confirm the classification and stack for a specific entry.
| Layer | Rate and date | Instrument |
|---|---|---|
| General (column 1) duty | Per HTS line 8507.60 | HTSUS |
| Section 301, EV lithium-ion batteries (8507.60.0010) and battery parts (8507.90.40) | 25% from 2024 | 89 FR 76581 (Sept. 18, 2024) |
| Section 301, non-EV lithium-ion batteries (8507.60.0020) | 25% for goods entered on or after Jan. 1, 2026 | 89 FR 76581 |
| Section 301 forced-labor action, products of China (9903.05.31) | 12.5% from 12:01 a.m. ET July 24, 2026 | USTR final notice, 91 FR 47318 |
The 12.5% forced-labor duty is not netted against the general rate for China, and HTS Chapter 99 note 52(a) makes it cumulative with the China Section 301 list duties. A court challenge to it has been reported; check its status before entry. The Section 301 notice of September 18, 2024 is published in the Federal Register; the same review moved natural graphite and permanent magnets to 25% in 2026.
Two earlier layers are gone. The IEEPA "fentanyl" and "reciprocal" duties ended after the Supreme Court held on February 20, 2026, in Learning Resources, Inc. v. Trump, that IEEPA does not authorize tariffs. A 10% Section 122 surcharge then applied from February 24, 2026; sources differ on its last day (the HTSUS compiler's note says it expired at the close of July 23, 2026; other summaries say July 24). Penn Wharton Budget Model put China's average effective US tariff rate at 24.3% in August 2026, an economy-wide figure rather than a battery rate.
Two non-tariff risks sit beside the duty stack. The 2025 UFLPA Strategy Update (August 19, 2025) designated lithium a high-priority enforcement sector under the Uyghur Forced Labor Prevention Act, so importers should expect to trace materials. And the IEA reports that China announced battery-related export controls in October 2025, then paused them for one year; whether that pause still holds should be checked before contracting.
Where battery production is shifting, and why
Capacity outside China is growing faster, but from a small base. In 2025 capacity grew about 50% in the EU and the US and just over 25% in China, and capacity outside the main regions nearly doubled, helped by a UK plant and investment in Southeast Asia (IEA). Morocco attracted LFP battery and materials investment.
The shift is mostly EV and grid-scale cells built to meet local-content rules. It does not reach the consumer packs most importers buy. Under stated policies the IEA projects that China remains the largest producer of batteries and battery materials to 2035.
Common mistakes, and how to evaluate a battery supplier
- No UN 38.3 test summary, or one for a different model. Forwarders and carriers refuse or delay the booking, and the importer, as distributor, is obliged to provide the summary on request.
- Using a pre-2026 duty rate. Non-EV lithium-ion batteries went to 25% under Section 301 on January 1, 2026; landed-cost models built on the earlier rate understate duty.
- Air-shipping samples without state-of-charge control. The reported 30% limit for UN 3481 items above 2.7 Wh applies from January 1, 2026.
- Not specifying cell grade and brand. Packs built from B-grade or reclaimed cells pass a visual inspection; their capacity and safety problems appear only in testing or in the field.
- Mislabeling watt-hour ratings or omitting Class 9 marks. Both create carrier penalties and safety exposure.
Evaluating a battery supplier starts with the documents the regulations already require. Ask whether the firm makes cells or assembles packs, and if it assembles, which cell maker and grade it uses. Request the UN 38.3 test summary and test report for the exact model and watt-hour rating being bought, the MSDS, and any UL or IEC reports the destination retailer requires. Because lithium is a UFLPA priority sector, ask for material traceability back through the cell supplier. Independent testing of sample packs, not a factory's own capacity claim, is the evidence that the cells match the specification.
Frequently asked questions
Does China make most of the world's lithium batteries?
Yes. China accounted for over 80% of battery cell production in 2025 and over 80% of global lithium-ion manufacturing capacity, which exceeded 4 TWh at the end of the year, according to the IEA's Global EV Outlook 2026. The EU and the US held 6–7% of capacity each. China's share is higher still in LFP chemistry, at about 98% of global cell capacity.
What is the US tariff on lithium-ion batteries from China in 2026?
As of October 2026, Chinese lithium-ion batteries carry a 25% Section 301 duty, for EV batteries since 2024 and for non-EV batteries since January 1, 2026 (89 FR 76581). The general HTS rate applies as well, and the 12.5% Section 301 forced-labor duty applies to Chinese goods entered from July 24, 2026. IEEPA duties ended after the Supreme Court's February 2026 ruling. A customs broker should confirm the stack for a specific HTS line.
Do I need a UN 38.3 test summary as an importer?
Yes, if you distribute the cells or batteries. Under 49 CFR 173.185(a)(3), each manufacturer and subsequent distributor of lithium cells or batteries made on or after January 1, 2008 must make a test summary available on request. In practice forwarders ask for it, together with an MSDS, before they will book a dangerous-goods shipment, and the summary must match the exact model being shipped.
Can lithium battery products be shipped from China by air?
Yes, under the IATA Dangerous Goods Regulations packing instructions, but with limits. Vendor summaries of the 67th edition report that from January 1, 2026, lithium-ion batteries packed with equipment above 2.7 Wh must ship at no more than 30% state of charge. Batteries shipped alone were already restricted. Because dangerous-goods air capacity is limited, much lithium cargo moves by ocean as Class 9 freight.
Is LFP or NMC more common from Chinese factories?
LFP. Lithium iron phosphate made up over 55% of EV batteries deployed in 2025 and over 90% of stationary storage installations, according to the IEA, and China holds about 98% of global LFP cell capacity compared with about 65% of NMC capacity (HKUST, December 2025). For energy-storage products in particular, LFP cells from China are the norm rather than the exception.
Are lithium batteries cheaper to make in China?
Structurally, yes. The IEA reports that battery pack prices in China were 30% lower than in North America and 35% lower than in Europe in 2025, and that production costs in Europe and the US remain as much as 50% higher. That gap is offset for US buyers by the 25% Section 301 rate, the 12.5% forced-labor duty and dangerous-goods freight costs.
Is lithium covered by the UFLPA?
Yes. The 2025 update to the UFLPA Strategy, released August 19, 2025, designated lithium as a new high-priority sector, alongside caustic soda, copper, red dates and steel. Goods with inputs from Xinjiang or from listed entities are presumed barred from US entry, so battery importers should be ready to document where cell materials came from.
Sources
- International Energy Agency (IEA) — Global EV Outlook 2026, Chapter on batteries, p. 95 note 21 and web chapter
- Office of the U.S. Trade Representative / Federal Register — USTR Notice of Modification, 89 FR 76581 (Sept. 18, 2024), FR Doc. 2024-21217, docket U…
- Office of the U.S. Trade Representative — Notice of Actions in Section 301 Investigations of Acts, Policies, and Practices of Various Economies Rela…
- Office of the U.S. Trade Representative / DHS FLETF — Forced Labor Enforcement Task Force Release of the 2025 Update to the UFLPA Strategy
- iea.org/reports/global-ev-outlook-2026/electric-vehicle-batteries
- ustlfsci.hkust.edu.hk/sites/default/files/2025-12/Global_Supply_Chain_Report…
- phmsa.dot.gov/sites/phmsa.dot.gov/files/2024-09/Lithium-Battery-Test-Summary…
- law.cornell.edu/cfr/text/49/173.185