CHINA'S GRAPHITE RESTRICTIONS IMPACT EV BATTERIES AND ACCELERATE ALTERNATIVES

China's recent move to restrict the flow of graphite, a mineral that's essential for crafting batteries in electric vehicles (EVs), has set off alarm bells. The Service of Business and the Overall Organization of Customs in China have proclaimed this decision, citing public safety concerns.

Source

This announcement came hot on the heels of the U.S. imposing stricter limits on the types of semiconductors that American companies can peddle to their Chinese counterparts. It's like watching a ping-pong match between China and the Western nations, where protectionist measures keep bouncing back and forth. You could say it's a real-life game of "regulatory tennis."

Stefan Legge, a top-tier expert in trade policy, cheekily likened it to Newton's third law: "For every action, there's a reaction." Well, this trade showdown is surely proving that point.

China, being the graphite powerhouse, plans to require export permits starting in December, covering not only synthetic graphite but also the good old chip graphite. It's like they're locking down their graphite stash.

Source

Now, car manufacturers are scrambling to secure alternative sources of graphite outside China. With the demand for EV batteries skyrocketing, it's a bit like everyone's hunting for treasure in uncharted territory.

Last year, global EV sales hit a whopping 10 million units, a staggering 55% increase from 2021. And the predictions for this year? Almost 14 million EVs, talk about an electric revolution.

Graphite, the unsung hero, not only powers EVs but also plays vital roles in the semiconductor, aerospace, chemical, and steel industries. It's the versatile superstar of minerals.

As if that wasn't enough, China had previously put the squeeze on gallium and germanium, minerals crucial for making semiconductors. Just like that, their exports plummeted to zilch.

Ivan Lam, a senior analyst at Contradiction Research, thinks these controls are more like a temporary timeout than a complete ban. But he's not pulling punches when he says, "Prices are going up!"

He adds, "The cost of graphite will keep rising due to supply and demand quirks, including Russia's role as a significant graphite supplier before the Russia-Ukraine saga."

China holds a monopoly on essential minerals for EV batteries, refining 60% of the world's lithium and 80% of the cobalt. It's like having the keys to the green energy kingdom.

So, in this ongoing saga, China's tightening the reins on crucial minerals, and the rest of the world is scrambling to keep the EV dream alive.