By Anton Leskov @

As electric vehicle production surges around the world, manufacturers are dealing with the reality that many of the vital materials necessary to build EV components aren’t available anywhere but China. The most recent realization of the Chinese supply-chain bottleneck is the supply of graphite. Mark Thompson, a founder of Talga Group, said, “Automakers are in a real bind because there’s been no investment in Western graphite.” Reuters reports:

Automakers, including Tesla and Mercedes, are rushing to lock in graphite supply from outside dominant producer China, as demand for electric vehicle (EV) batteries outpaces other uses for the mineral for the first time due to soaring EV sales.

Auto firms have been slow to plan for graphite shortages, focusing mainly on better-known battery materials lithium and cobalt, even though graphite is the largest battery component by weight.

Now, car makers are knocking at the doors of new producers, such as Madagascar and Mozambique, as this year EVs are forecast to account for more than 50% of the natural graphite market for the first time, according to consultancy Project Blue.

Shortages of material produced outside of China will be even more acute as legislation in the United States and Europe aims to cut reliance on China for critical minerals.

“Automakers are in a real bind because there’s been no investment in Western graphite,” said Mark Thompson, founder and managing director of Australia’s Talga Group Ltd (TLG.AX), which plans to launch production next year in Sweden.

Each EV on average needs 50-100 kg of graphite in its battery pack for the anodes, the negative electrodes of a battery, about twice the amount of lithium.

The main use of graphite has been in the steel industry, but EV sales are due to more than triple by 2030 to 35 million from 2022, BMO Capital Markets forecasts.

Graphite shortages are expected to rise in coming years, with a global supply deficit of 777,000 tonnes expected by 2030, Project Blue projections showed.

About $12 billion of investment is needed by 2030 in graphite and 97 new mines required by 2035 to meet demand, Benchmark Mineral Intelligence (BMI) said in a report.

China produces 61% of global natural graphite and 98% of the final processed material to make battery anodes, BMI said.

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