U.S. President Donald Trump has undertaken the most aggressive federal intervention in the critical minerals and rare earth sectors ever since he returned to the Oval Office, announcing a flurry of deals as Washington desperately tries to counter China’s dominance in minerals that are powering the energy transition and AI boom. The deals included a hodgepodge of equity and debt packages with dozens of rare earths companies, with MP Materials (NYSE:MP) and U.S. Rare Earths (NASDAQ:USAR) some of the key beneficiaries. Last month, Trump unveiled a $3-billion federal investment in critical minerals projects across the country, part of ongoing efforts to scale domestic production and decouple from Chinese battery supply chains. The highlight of the financing round was a $1.4-billion conditional loan to Sila Nanotechnologies from the Pentagon’s Office of Strategic Capital (OSC), with the California-based startup looking to scale up the production of next-generation battery materials.
The United States is now home to a growing number of companies looking to re-invent EV batteries. That’s hardly surprising considering that EVs represent the leading demand driver for critical minerals, accounting for well over half of total global demand for critical minerals like lithium, cobalt and nickel.
Sila Nanotechnologies is a battery materials company focused on commercializing and mass-manufacturing silicon-carbon (Si/C) composite anodes to replace traditional graphite in lithium-ion batteries. The company’s flagship product is Titan Silicon, a nano-engineered silicon anode material designed as a seamless “drop-in” replacement for existing battery manufacturing processes. The company’s batteries promise up to a 40% increase in energy density compared to standard graphite cells, while being lighter and more compact. The company commenced commercial-scale production processes for its Titan Silicon material in late 2025, with the Moses Lake factory aiming to produce enough advanced silicon-carbon anode material to power between 20,000 and 50,000 electric vehicles annually.
Related: Senegal to Offer 109 Oil and Gas Blocks to Investors
Meanwhile, Utah-based Lilac Solutions is attempting to shake up the mining industry by deploying its patented Direct Lithium Extraction (DLE) technology to extract lithium from brine water. Compared to traditional mining, DLE takes one day instead of two years, recovers roughly double the lithium while using 99% less land and significantly less water by eliminating massive evaporation ponds.
“If you use our technology, you’re producing battery grade lithium carbonate or hydroxide at the site of production,” Raef Sully, CEO of Lilac Solutions, told CNBC. “And you’re bypassing that important step, that processing step that China has a chokehold on today.”
The sudden government push leaves observers with the impression that America’s critical minerals supply chain is about to become huge; however, there are growing concerns that Washington’s flurry of investments in the sector still won’t be enough to catch up to China.
Decades of state subsidies, strategic infrastructure financing via initiatives such as the Belt and Road Initiative (BRI) as well as a willingness to bear the steep environmental costs associated with critical minerals mining and processing has allowed China to dominate both the upstream and downstream sectors of the value chain. China now accounts for roughly 60% of global critical minerals mining and more than 90% of the refining and processing of critical materials like rare earths, graphite and gallium. Indeed, the Global Critical Minerals Outlook 2025 revealed that China is the leading refiner for a remarkable 19 out of 20 most important strategic minerals, commanding an average market share of 70%.
“It takes decades and tens, if not hundreds of billions of dollars to achieve the kind of comprehensive scale across the supply chain that China now has,” Tu Le, founder and managing director of Sino Auto Insights, told CNBC. “We don’t have decades. We have five, six, seven years to try to become competitive.“
China already enjoys massive scale in critical minerals and battery materials that U.S. startups like Sila Nanotechnologies and Lilac Solutions will find challenging to match. According to the International Energy Agency (IEA), China makes 80% of the world’s battery cells, more than 90% of anode active material and ~85% of the world’s EV battery cathode active material.
“They have built up an incredible lead in terms of technology and manufacturing capabilities across the world,” Richard Wang, CEO of Voya Energy, told CNBC about China’s CATL, the world’s largest EV battery manufacturer. “They are one of the only battery companies in the world that’s not only high in revenue, but is significantly profitable because of how strong their manufacturing and supply chain capabilities are.”
Ironically, key policies by the Trump administration are also likely to hurt the very sector he is working round the clock to promote. By dismantling Biden-era climate incentives, the Trump administration triggered a slowdown in clean energy investments, chilled consumer demand and threw renewable energy supply chains into disarray. To wit, EV sales in the U.S. dropped sharply following the Trump administration’s elimination of the $7,500 federal EV tax credit and rollbacks on fuel economy standards. U.S. EV sales fell by 27% Y/Y in Q1 2026, marking the second consecutive quarter of tanking sales since Trump returned to the White House. Quite obviously, a shrinking U.S. electric vehicle market does not bode well for battery materials companies.
By Alex Kimani for Oilprice.com
More Top Reads From Oilprice.com
Oilprice Intelligence brings you the signals before they become front-page news. This is the same expert analysis read by veteran traders and political advisors. Get it free, twice a week, and you’ll always know why the market is moving before everyone else.
You get the geopolitical intelligence, the hidden inventory data, and the market whispers that move billions – and we’ll send you $389 in premium energy intelligence, on us, just for subscribing. Join 400,000+ readers today. Get access immediately by clicking here.
