A graphite factory worker, his face covered in the mineral, heads home in China’s Mashan district. The northeastern province of Heilongjiang is rich in graphite and factories that process it, and locals complain about polluted air and water affecting their crops and health. (Getty Images, 2016)
Graphite is an important component of current electric vehicle batteries. It is also difficult for Americans who have in mind a tax advantage for buying climate-friendly cars.
EVs may qualify for a $7,500 tax credit under President Joe Biden’s Climate and Tax Act as long as their batteries contain minerals extracted from or processed in a country with a free trade agreement with the US, and provided some of the the components are made or assembled in North America. The measure, under the Inflation Reduction Act, will take effect next year and the substantive requirements will become stricter after 2024.
Graphite, which is mainly produced in China, can cause problems.
“The material that worries me most is the anode,” said UBS AG analyst Tim Bush in a webinar on the chemistry of EV batteries.
Graphite is an essential ingredient in EV battery anodes, a terminal in a rechargeable cell. Battery manufacturers can use natural graphite extracted from mines to make anodes, or a synthetic material that is typically more expensive but lasts longer, charges faster and improves safety. China is a large source of the raw material and also accounts for about 60% of the natural production capacity for graphite and 90% of the synthetic variety.
While automakers and battery makers are spending billions of dollars on new North American plants, “we haven’t seen that for the anode,” Bush said. Making anodes is energy-intensive, it produces a lot of emissions and the future of the technology is uncertain, making it ‘very challenging’, according to Bush, to circumvent such substantive requirements.
“In the current technology roadmap, it’s planned for potential obsolescence,” he said.
The industry is investigating the use of lithium metal to replace graphite anodes in solid-state batteries and the use of silicon as a replacement, something Tesla’s Elon Musk has talked about in the past. Until then, the presence of graphite in EV batteries will continue to be a challenge for US consumers seeking that tax incentive.