In Ningde, China, the headquarters of Contemporary Amperex Technology Company Ltd. (CATL) showcases the country’s rapidly advancing battery technology industry, underscoring a significant shift in global technological leadership. Once dominated by U.S. companies, sectors such as electric vehicle (EV) batteries, solar panels, rare earth materials, and life sciences now see China emerging as a decisive competitor, raising strategic concerns internationally.

CATL, established in 2011 and now operating around two dozen factories worldwide, produces about 40% of the global supply of EV batteries and 30% of those used for energy storage and grid stabilization. The company recently unveiled a battery capable of powering an electric vehicle for approximately 250 miles on a charge of less than 10 minutes—three times faster than typical EV batteries. CATL’s technology currently powers millions of affordable electric vehicles that China exports globally, and the firm has expressed interest in expanding into the large U.S. car market.

This technological ascent poses complex dilemmas for the United States. American officials and some lawmakers criticize China for employing aggressive industrial policies and substantial subsidies that have fostered dominance in sectors like battery manufacturing. Representatives such as John Moolenaar have accused the Chinese government of subsidizing companies like CATL to undermine non-Chinese competitors and create a global dependence on Chinese technology. Concerns also extend to national security risks, with CATL placed on the U.S. list of Chinese military companies last year—a designation the firm disputes, asserting it has no military ties.

Despite these apprehensions, some experts warn that severing ties with Chinese companies could hinder U.S. innovation and competitiveness. Analysts highlight the importance of partnerships with firms like CATL in maintaining access to cutting-edge technology and controlling costs, particularly as the U.S. works to decarbonize its energy infrastructure. Automakers such as Tesla and Ford currently rely on CATL batteries or technologies in their American plants, while General Motors has sought to develop supply chains independent of China through collaborations with South Korean manufacturers.

The U.S. government maintains significant barriers to Chinese investment, including rigorous security reviews, restrictions on foreign real estate acquisitions, tariffs on Chinese imports, and forthcoming bans on certain Chinese-origin software in vehicles from 2027 onward. Political dynamics also influence these economic ties; for example, a proposed Ford-CATL battery factory was blocked in Virginia in 2023 amid fears of undue Chinese influence. However, ongoing diplomatic engagements, including plans for a bilateral “board of investment,” reflect attempts to identify areas for limited Chinese investment deemed non-strategic.

China’s government support for its battery industry has involved large-scale financial incentives for consumers, strict regulations limiting the use of foreign batteries, and efforts to restrict the export of battery manufacturing technology. Critics argue these policies distort global markets and give Chinese companies an outsized advantage. A recent Organization for Economic Cooperation and Development (OECD) report found Chinese industrial firms received government support at rates far exceeding those in other wealthy nations.

Beyond industrial policy, some observers acknowledge that China’s successes stem from significant investments in research and development, education, and talent cultivation. CATL employs thousands of researchers, including hundreds with doctoral degrees, and spends more on R&D than its competitors. This emphasis on innovation has prompted calls for similar commitments in the United States to sustain its technological edge.

The evolution of China’s battery sector reflects broader shifts in global science and technology leadership, with implications for economic competition, national security, and climate change mitigation. U.S. policymakers face challenging decisions on balancing concerns over dependence and security with the benefits of collaboration and access to advanced technology.