China's 97% Anode Materials Capacity Share Exposes Global Supply Chains

Global clean-energy supply chains face a manufacturing bottleneck in China, which holds 60% to 85% of capacity at several production stages and an even larger share of two critical components.

China accounts for about 95% of photovoltaic wafer capacity and 97% of anode active materials capacity. Its share is about 85% across the solar photovoltaic supply chain and 80% for lithium-ion batteries.

The International Energy Agency (IEA) examined solar photovoltaics, wind equipment, batteries and heat pumps in an assessment published March 26, 2026. Using 2024 demand, it found that factories outside China could theoretically meet most demand outside the country at the final production stages of most of those four technologies.

The picture changes when every production step is considered. Each supply chain has at least one stage where capacity outside China could cover less than one-quarter of demand outside China. The ability to complete final assembly therefore does not establish that manufacturers could obtain all the inputs they need during an export interruption.

The battery chain illustrates the potential cost. In a model involving a one-month interruption in Chinese battery supply-chain exports, output at electric-car plants outside China would fall by an estimated $17 billion. Almost two-thirds of the modeled loss would occur in the European Union. The estimate describes a hypothetical output loss, not a loss that has occurred.

The IEA projects no major change in supply-chain security before the end of the decade. That assessment takes account of committed manufacturing and mining projects, projected market trends and current stated policies. IEA Executive Director Fatih Birol has urged governments and industry to strengthen supply-chain resilience and industrial competitiveness.