China’s commanding grip on the world’s market for battery materials could have potentially disastrous consequences for America’s defense industry, according to a new report.

The Chinese Communist Party (CCP) controls more than 80% of the world’s supply of lithium-ion batteries, and it also maintains a near-monopoly on the components needed to manufacture them, the Foundation for the Defense of Democracies (FDD) found in its report on the subject. Advanced batteries are used extensively in high-tech American weapon systems like drones and missile guidance systems, and China’s willingness to weaponize its supply chain dominance is sounding alarms among defense experts.

“As the use of drones, robots, and other unmanned weapons platforms increases in importance, better batteries will mean a better fighting force,” the FDD report states. “The Russia-Ukraine war demonstrates the ways in which drone warfare can transform a battlefield, with an estimated 50,000 battery-reliant attack drones used per month. Securing powerful and reliable American-made advanced batteries represents a critical national security priority. Many of the American military’s small drones and similar devices have dependencies upon China, with batteries being an area of particular weakness.”

China also dominates markets for other battery components, including 70% of the cathode market share and a whopping 97% of anode materials, according to the FDD report. The communist regime also has a stranglehold on markets for graphite and cobalt, which are key inputs for chip manufacturing in addition to batteries.

In contrast to Western competitors, the Chinese government often steps in to interfere heavily with market forces in order to keep their corporations on top.

“While most nations respect a basic set of rules that promotes fair competition, Beijing leverages a wide range of non-market practices to dominate supply chains, create resource dependencies, undermine foreign rivals, concentrate economic power, and destabilize emerging economies,” the report reads.

The Chinese government has also taken measures to shield its domestic companies from external market pressures, pumping their producers with over $230 billion in subsidies and tax breaks from 2009 to 2023 while providing a range of other beneficial interventions, according to the report.

Currently, the U.S. imports approximately 75% of its lithium-ion batteries from China alone, according to the Council on Strategic Risks. Additionally, nearly 90% of the global market share for drones is owned by China, which has been a topic of immense concern given the increasing use of drones in modern warfare.

President Donald Trump’s administration is well aware of the problem of relying on China for batteries, and the U.S. has made multiple moves in his presidency to shift away from Beijing for sourcing rare earth elements, including lithium.

“If we cannot access the raw materials and components that we need to drive our economy, our adversaries will be able to defeat us by simply withholding those indispensable inputs,” the FDD report says.

The report concluded that U.S. investments in mineral extraction and processing while holding China to greater transparency standards are key steps to fight Beijing’s battery dominance. Additionally, American allies like Argentina and Chile could emerge to provide the crucial minerals while the U.S. weans off China’s supply.

The Pentagon did not respond to the Daily Caller News Foundation’s request for comment.

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