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China decided to play monopoly with graphite.
On Friday, Beijing announced the need for special export permits for certain types of graphite from December 1, stressing that this decision is not directed against any particular country. Under the new restrictions, Chinese exporters will need permits to ship two types of graphite, including high-purity synthetic graphite and natural shelled graphite and its products.
China dominates global supply chains for graphite, which is a key component for electric vehicle batteries. Demand for graphite is expected to increase 20-25 times between 2020 and 2040, according to the International Energy Agency (IEA).
The move by Beijing comes shortly after Washington tightened controls on semiconductor exports to China. The supply chain for electric vehicles has become a source of growing tension between Beijing and the West.
China is the world's largest producer and exporter of graphite, processing more than 90% of the world's graphite into an anode material used in electric vehicle batteries. Major graphite buyers from China include the United States, South Korea, Japan, Poland, and India.
Graphite is the main component by volume in an electric vehicle battery, accounting for 95-99% of the anode material in lithium-ion batteries.
Graphite prices are likely to increase, but China's latest moves will also increase the need to find alternative sources for this key battery material.
Some electric vehicle manufacturers have already begun diversifying their supply chains outside of China. Earlier this year, Tesla entered into a supply agreement with the Australian company Magnis Energy Technologies.
On Friday, Beijing announced the need for special export permits for certain types of graphite from December 1, stressing that this decision is not directed against any particular country. Under the new restrictions, Chinese exporters will need permits to ship two types of graphite, including high-purity synthetic graphite and natural shelled graphite and its products.
China dominates global supply chains for graphite, which is a key component for electric vehicle batteries. Demand for graphite is expected to increase 20-25 times between 2020 and 2040, according to the International Energy Agency (IEA).
The move by Beijing comes shortly after Washington tightened controls on semiconductor exports to China. The supply chain for electric vehicles has become a source of growing tension between Beijing and the West.
China is the world's largest producer and exporter of graphite, processing more than 90% of the world's graphite into an anode material used in electric vehicle batteries. Major graphite buyers from China include the United States, South Korea, Japan, Poland, and India.
Graphite is the main component by volume in an electric vehicle battery, accounting for 95-99% of the anode material in lithium-ion batteries.
Graphite prices are likely to increase, but China's latest moves will also increase the need to find alternative sources for this key battery material.
Some electric vehicle manufacturers have already begun diversifying their supply chains outside of China. Earlier this year, Tesla entered into a supply agreement with the Australian company Magnis Energy Technologies.
