China did not stumble into controlling 75 percent of the global battery supply chain by accident. It had a plan, and it has been executing on that plan for years. The question facing the United States isn't whether it can compete – it's whether it's willing to act like it wants to.
The stakes are significant. Demand for lithium-ion batteries is expected to grow from 1.0 terawatt-hours (TWh) in 2024 to 6.8 TWh by 2035, nearly a sevenfold increase driven by electric vehicles, grid-scale storage, and surging data center power demand. Every gigawatt-hour in that surge runs through a supply chain America doesn't control. And the structural gaps are more specific than many realize: the U.S. and Europe each account for less than 10 percent of global anode graphite and cathode precursor production. That's a lot more than a gap; some might call it a dependency.
Closing it will require more than willpower and tax credits. What’s needed is the kind of deliberate, coordinated strategy that has helped other industries fight back from exactly this position, and that the U.S. battery industry has not yet managed to assemble.
It's tempting to look at recent battery price drops — pack prices fell to a record low of $108 per kilowatt-hour in 2025, less than half the price in 2018 — and conclude the market is working. It isn't, at least not for American producers. Those falling prices reflect massive overcapacity concentrated almost entirely in Asia. Global overcapacity reached approximately 900 gigawatt-hours in 2025, and the producers driving that glut have cost structures, supply chains, and government backing that U.S. manufacturers simply cannot match today.
The underlying economics are punishing. Every 10 gigawatt-hours of production capacity requires, on average, $700 million to $800 million in capital, with construction lead times of four to five years. We see substantial performance differences on capital and time to market between players in the industry, with some being able to beat the average significantly. Commodity volatility challenges the math more so: lithium and nickel prices have swung three to six times in recent years, and a 50 percent rise in either would push cell costs roughly 10 percent higher. In that environment, private capital stays on the sidelines unless someone reduces the risk.
While it’s tempting to think of this as a market failure, we believe that it is a structural challenge only a deliberate strategy can overcome.
Other industries have faced this problem before — semiconductors and steel being the most instructive examples — and solved it through what economists call incentive pricing. This isn't central planning or picking winners. It's creating transparent, long-term return thresholds that guide capital toward competitive investments while letting the market determine who executes best.
The U.S. already has one powerful tool in place. The Inflation Reduction Act's Section 45X tax credit — $35 per kilowatt-hour for domestic battery cell manufacturing — effectively lowers production costs by 30 percent to 50 percent, according to our analysis. That's a meaningful floor. But a single credit instrument isn't a strategy. What's missing is a coordinated set of complementary mechanisms: strategic reserves to dampen commodity volatility, loan guarantees to de-risk early-stage projects, and long-term offtake certainty to make returns legible to institutional capital.
Done right, this doesn't require choosing technologies or companies. It creates the conditions under which the market can function.
The American economy has more than enough capital to make this work. The challenge is that it isn't flowing to batteries, especially in recent years, because the risk-return profile doesn't make sense for the pools that could move the needle. Three groups need to be brought in intentionally.
Strategic industrials — large chemical, oil, and mining companies — have existing capabilities that translate directly into battery supply chain participation. The upstream materials challenge is partly their opportunity if the incentive structure invites them in.
Infrastructure and private capital funds are sitting on significant dry powder looking for stable, contracted returns. Batteries don't look like infrastructure today because the volatility and policy uncertainty are too high. Reduce those, and the asset class becomes attractive almost immediately.
Automakers and utilities are the strategic customers whose demand commitments can anchor the entire supply chain. OEMs have leverage here that they haven't fully deployed — long-term offtake agreements with domestic producers would do more to unlock investment than almost any other single action.
None of this is hypothetical. Nearly 700 gigawatt-hours of battery production capacity was already under construction in the U.S. as of early 2025. The "Battery Belt" taking shape across the Southeast and Midwest is a true industrial cluster in formation. The foundation exists, but what's needed now is the coordinating strategy to build on it.
For readers of this publication, the near-term focus is clear: battery energy storage is becoming as important as EV supply chains, driven by the same data center expansion and grid modernization pressures reshaping the entire energy sector. The U.S. needs a competitive domestic supply chain to meet that demand, and the window to build one is narrowing.
China won its position in batteries through sustained policy, targeted capital, and patience. The U.S. won't replicate that model, nor should it try. But the tools available to the American industry including deep capital markets, a strong industrial base, existing policy frameworks, and emerging regional clusters are formidable. What they require is a plan that connects them.
The next two years will matter more than most people in the industry currently appreciate. Our advice: act now or spend the next decade buying from the competition.
Raphael Rettig is a McKinsey partner based in Düsseldorf, Germany, and lived and spent several years in the United States. He co-leads the McKinsey Battery Accelerator Team globally.
There was a time when environmental leadership in the auto industry was a scarce commodity. Seventeen years ago, when Green Car Journal announced its first Green Car of the Year® in Los Angeles, it was difficult to identify more than a few dozen truly worthy vehicles to be considered for the honor. Today it is a formidable challenge in a different way. Now, analyzing the expansive field of green cars that champion greater environmental performance can be downright mind numbing, along with the process of honing the list down to a manageable number of candidates for each of our Green Car Awards™.
Still, this is a great problem to have and we’re up to the challenge. In fact, we celebrate the difficult and time-consuming process. This sheer number of greener models means that all of us benefit from the ability to buy and drive an increasing number of vehicles that champion a lighter impact on the environment.
As finalists are evaluated during the judging process, Green Car Journal weighs an array of important criteria such as environmental achievement, cost, value, safety, performance, functionality, and availability. These may vary from one award category to another. For instance, cost is less of a factor in Luxury Green Car of the Year™; greater driving range may not be as critical in Urban Green Car of the Year™; and immediate availability is less of an issue for Commercial Green Car of the Year™, since commercial fleets tend to plan well ahead and are used to scheduled batch builds of specialized vehicles. Some criteria take on more importance, such as electric driving range in most categories where EVs are considered; family friendliness in awards where passenger needs or capacity are important; and tow ratings and realistic long-distance towing and hauling capabilities in the case of Green Truck of the Year™.
There are more complex issues at play today. We’ve seen order banks for some new or popular pickups like the Ford F-150 Lightning and Ford Maverick suddenly close for the model year, which means consumers are no longer able to order one, at least at this time. Since price is an important consideration for most award categories, when we see sudden price hikes in the thousands of dollars, we also take notice. Then there’s the issue of supply chain disruptions and materials shortages that can delay a model’s expected availability. We take all of this into account and dive deep to ensure we’re as up to speed as possible to avoid potential surprises.
Green Car Journal’s Green Car Awards™ program has evolved over the years, most notably with the addition of more award categories to reflect the ever changing and expanding world of environmentally positive vehicles. Plus, along with the ‘greenest’ vehicles honored by the 2023 Green Car Awards™ program, Green Car Journal now recognizes the crucial roles that infrastructure and technology play in enabling a more sustainable driving future.
Let's get to it. Here are the winners of Green Car Journal’s prestigious 2023 Green Car Awards™:
TOYOTA CROWN – The Crown is Toyota's sophisticated new flagship that champions high fuel economy, lower carbon emissions, and appealing style. The five-passenger sedan features a stylish and high tech cabin designed to offer a premium feel. It’s powered by a 2.5-liter THS hybrid estimated to deliver 38 combined mpg, or a more powerful 2.4-liter turbocharged HYBRID MAX powerplant with 340 horsepower. On-demand all-wheel drive is standard.
Finalists for Green Car Journal’s legacy award included the Chevrolet Bolt EUV, Nissan Ariya, Toyota bZ4X, Toyota Crown, and Volkswagen ID.4.
CADILLAC LYRIQ – Featuring upscale styling and a premium theme, the Lyriq is Cadillac’s first all-electric vehicle that’s offered in single or dual motor versions with rear- or all-wheel drive. At a base price of $62,990, the Lyriq features an impressive 312 mile driving range. Satisfying performance is delivered by 340 horsepower in the single motor variant and 500 horsepower in the dual motor version.
Among this award’s finalists were the Cadillac Lyriq, Genesis GV60, Lexus RX, Mercedes-Benz EQB, and Polestar 2.
MITSUBISHI OUTLANDER PHEV – Last year’s introduction of the all-new Mitsubishi Outlander made waves with its more dynamic styling and upscale features. Now the next-generation Outlander PHEV has joined the lineup. Featuring standard all-wheel drive, the twin motor plug-in hybrid SUV now features significantly greater battery electric range of 38 miles and 420 miles overall, plus the addition of three-row seating that was unavailable in the previous generation Outlander PHEV.
Finalists included the Kia Sportage, Mitsubishi Outlander PHEV, Toyota Corolla Cross Hybrid, Toyota Sienna, and Volvo XC40.
RAM 1500 –The RAM 1500 is a model of versatility and functionality that provides pickup buyers loads of choices. It’s available in Quad Cab and Crew Cab configurations, offers two pickup box lengths, two- or four-wheel drive, and diverse power options. These include two hybrids – a 3.6-liter eTorque V-6 and 5.7-liter eTorque HEMI V-8 – plus a 3.0-liter EcoDiesel and 6.2-liter supercharged V-8. RAM can carry payloads up to 2300 pounds tow trailers up to 12,750 pounds.
Finalists considered for this award were the Ford F-150 Lightning, Ford Maverick, Hyundai Santa Cruz, RAM 1500, and Toyota Tundra.
FISKER OCEAN – The all-electric Fisker Ocean SUV features an appealing and sporty design enhanced by an attractive and uncluttered high-tech interior. It’s available in three versions with a driving range of 250 to 350 miles. Beyond its zero-emission electric drive, Fisker is committed to making the Ocean a model of sustainability with over 110 pounds of recycled materials used in its construction, including crushed carbon fiber and plastics from bottles and fishing nets.
Finalists for this award were the Audi Q4 e-tron, Fisker Ocean, Honda CR-V, Kia EV6, and Subaru Solterra.
FORD F-150 LIGHTNING PRO – The F-150 Lightning PRO available to fleets offers 240 to 320 miles of all electric range, depending on battery pack, with a payload capacity up to 2235 pounds. Towing capability up to 10,000 pounds is ideal for urban and regional applications where long-distance towing is not required, since towing can significantly reduce electric range. It’s available with Pro Power Onboard outlets for power at job sites. A Special Services Vehicle variant is made for non-pursuit police department applications.
Finalists for the award were the Brightdrop EV600, Ford E-Transit, Ford F-150 Lightning PRO, Rivian Delivery Van, and Via Motors Chassis Cab.
MINI COOPER SE ELECTRIC – The fully electric MINI Cooper SE carries on the tradition of the MINI as a diminutive two-door hardtop with a fun-to-drive nature and go-kart handling, adding the important distinction of zero-emission operation. The Cooper SE Electric is an ideal vehicle for urban environments, offering a small physical footprint, easy maneuverability, and an electric driving range of 114 miles between charges.
Finalists included the BMW X1, Chevrolet Bolt, Kia Niro, MINI Cooper SE Electric, and Nissan Versa.
JEEP GRAND CHEROKEE 4XE – The Grand Cherokee 4xe offers all the outstanding features of Jeep’s conventional SUV with the addition of plug-in hybrid capability. It’s powered by a 2.0-liter turbocharged four cylinder engine and two electric motors delivering a total of 375 horsepower. This Trail Rated Jeep features 25 miles of zero-emission on- and off-road driving and a combined 470 miles of range, can tow up to 6,000 pounds, and ford up to 24 inches of water since all high-volt electronics are sealed and waterproof.
Vying for this award were the RAM 1500 eTorque, Ford F-150 Lightning, Jeep Grand Cherokee 4xe, Jeep Wrangler 4xe, and Rivian R1T.
FREEWIRE TECHNOLOGIES BOOST CHARGER – Freewire Technologies’ Boost Charger integrates lithium-ion battery storage to eliminate the need for expensive electrical service upgrades at gas stations adding EV fast charging. Phillips 66 has installed a Boost Charger at a station near its Houston headquarters and plans to leverage its network of 7,000 Phillips 66, Conoco, and 76 branded sites with additional Boost Chargers.
Finalists included Clean Energy Fuels RNG Stations, EVgo Autocharge+, Electrify America Megawatt Energy Storage, Freewire Boost Charger, and SparkCharge Roadie.
LI-CYCLE SPOKE & HUB TECHNOLOGIES – Li-Cycle’s Spoke & Hub system recycles end-of-life lithium-ion battery packs without requiring dismantling. Batteries undergo a submerged shredding process at regional Spoke facilities in the U.S., Canada, and Europe that produces no wastewater, with the output a black mass consisting of critical metals including lithium, cobalt, and nickel. A centralized Hub facility then processes the black mass and creates battery grade materials for reuse.
Finalists considered for this award were BMW eDrive Zones, ConnectDER, Ford Home Integration System, GM Hydrotec Fuel Cell Power Cubes, and Li-Cycle Lithium-Ion Battery Recycling.
Rising above a substantial field of ‘green’ competitors to become a Green Car Awards™ candidate is a noteworthy achievement in itself. To honor these vehicles, all finalists considered in a Green Car Awards™ category are recognized for their commendable environmental achievement with Green Car Journal’s 2023 Green Car Product of Excellence™.