EU Tightens Export Controls on Graphite, Threatening EV Production Expansion
The European Union is tightening export controls on strategic goods, including graphite, which could impact the expansion of electric vehicle (EV) production. CNN reports that China, the world's top graphite producer, will require export permits for this key material starting December 1. The move has prompted Western auto giants to rush for alternative suppliers, as reported by the New York Post.
Graphite is crucial for EV batteries, with China producing about 65% of the global supply. The new export restrictions could potentially be a bottleneck for EV production expansion. Tesla has already secured a supply contract with an Australian company for graphite from Mozambique, as reported by Tractor Supply. After China's December 2021 requirement for export licenses, battery manufacturers outside China have been actively seeking and purchasing high-quality graphite to reduce dependency on Chinese supply. Meanwhile, the EU is investigating whether Chinese-made EVs have unfairly impeded competition through low pricing and subsidies, as reported by CNN.
The EU's new regulations will tighten export controls on strategic goods, including graphite. Western auto companies are scrambling to secure new suppliers before China's export restrictions take effect. Chinese companies hold over 80% of the market share in negatively charged materials for automotive batteries, making the search for alternative suppliers critical. Establishing a supply chain outside of China for high-purity graphite may be challenging immediately due to existing export restrictions.
