The U.S. currently sources a large portion of its critical minerals supply from foreign entities— a dependency that puts national security, economic competitiveness, and energy transition at risk. To build a stronger, more resilient domestic battery industry, we must understand what’s driving demand for critical minerals, how to diversify supply chains, the role of policy, and how innovation is reshaping the landscape. To put this into perspective, for 19 out of 20 strategic critical minerals, China is the leading refiner, with an average market share of approximately 70%.
Demand for critical minerals doesn’t start in the ground; it starts with consumer trends that are transforming the global economy. The fastest-growing consumer markets today share a common dependency: they run on batteries, and batteries run on critical minerals. This challenge is not just the resources; it’s the entire supply chain that sources them and converts them into usable inputs.
6 FORCES DRIVING DEMAND
- Electric vehicles. Transportation electrification remains the most visible and material-intensive driver. Automakers are not simply replacing engines with batteries; they are redesigning mobility around energy storage. From passenger EVs to commercial fleets and heavy-duty applications, the scale is unprecedented. Each step toward electrification accelerates demand for lithium, nickel, cobalt, graphite, and manganese.
- Consumer electronics. Consumer devices established the foundation for lithium-ion demand. While devices are becoming smaller, their ecosystems are expanding. Wearables, smart homes, and always-on connectivity are embedding batteries deeper into daily life, creating a steady demand baseline.
- AI infrastructure. The growth of artificial intelligence is deeply physical, requiring rapid expansion of data centers. These facilities depend on batteries for backup power, load balancing, and renewable integration. Data center infrastructure is significantly increasing battery materials demand.
- Grid-scale energy storage. As renewable energy grows, so does the need to store and dispatch power reliably. Batteries are shifting from pilot projects to core infrastructure, fundamentally changing how energy systems operate and requiring massive volumes of critical minerals.
- Defense and national security needs. Batteries now power advanced military systems, electrified vehicles, and portable energy solutions, elevating critical minerals from economic inputs to strategic assets.
- Data infrastructure framework. As digital services scale, so does the need for resilient, battery-backed power systems.
Each of these sectors is reshaping the battery industry. For example, battery chemistry is evolving based on priorities like cost, safety, and supply chain security. The rise of lithium iron phosphate (LFP) reduces reliance on cobalt and nickel, while next-generation chemistries may introduce entirely new material dependencies. At the same time, highly concentrated supply chains, particularly in Asia, are creating vulnerability and intensifying the global race to secure domestic sources.
INDUSTRY GROWTH
As demand for lithium-ion batteries accelerates, the global battery energy storage market must expand to keep pace. Experts predict the market will grow from $50.8 billion in 2025 to nearly $106 billion by 2030.
This growth presents both a challenge and an opportunity: more end-of-life batteries and a greater need to recover critical materials.
Battery recycling is a key lever for creating a more resilient domestic battery industry. Today, many critical minerals are mined outside our domestic borders. Recycling enables a closed-loop system by recovering materials from used batteries, refining them into battery-grade critical minerals, and reintegrating them into manufacturing. This approach reduces reliance on volatile regions, lowers costs to the consumer, and strengthens domestic supply chains, creating the foundation for a more competitive and secure industry.
Recycling and processing advancements are accelerating a country’s ability to reclaim critical minerals and reuse them. These technologies are improving recovery rates, lowering costs, and providing scalable operations that have the potential to fundamentally shift the economics of the industry. In the U.S., recycling and processing capacity is expanding, with capacity expected to grow to 140 GWh by 2030, signaling meaningful progress toward supply chain resilience.
BOTTOM LINE
Access to critical minerals is no longer a niche issue, and battery recycling is foundational to closing the loop on the critical mineral supply chain that will define the next decade of innovation. The race is not just to build better batteries. It is to recover these materials, reuse them, and rethink the material systems that make those batteries possible.
David Klanecky is CEO and president of Cirba Solutions.
