Securing the supply of graphite for batteries

2025-03-27

AI Summary

Over 92% of global battery-grade graphite anodes are produced in China, raising critical supply chain security and geopolitical risks. Method: This study develops a process-based dynamic cost model to systematically quantify— for the first time—the full-value-chain cost drivers of both natural and synthetic graphite at commercial scale. Contribution/Results: The analysis reveals that U.S. graphite production incurs significantly higher costs than China’s, primarily due to greater capital intensity and elevated raw material prices, rendering most domestic projects commercially noncompetitive. The study innovatively proposes a dual-pathway strategy—targeted financing support and process optimization—and establishes cost ceiling benchmarks for emerging technologies, including methane pyrolysis and catalytic graphitization. By precisely identifying core bottlenecks and key leverage points in the U.S. graphite industry, the work delivers quantitative, evidence-based insights to inform policy design, supply chain diversification, and strategic investment in critical enabling technologies.

Technology Category

• Machine Learning: Graph-based Machine Learning
• Data Mining & Knowledge Management: Graph Mining, Social Network Analysis & Community
• Reasoning under Uncertainty: Graphical Models

Application Category

• Graph Algorithms and Modeling for the Web: Efficient manipulation of static and dynamic Web-related graphs
• Economics, Online Markets and Human Computation: Cost models of using LLMs in production systems
• Security and Privacy: Large-scale security measurements

Abstract

The increasing demand for graphite in batteries has led to concerns around supply chain security. Currently, over 92% of global anode material is produced in China, posing a geopolitical risk for other countries reliant on graphite supply for domestic industries. This paper assesses the costs of producing battery-grade graphite (natural and synthetic) in the US and China using process-based cost models. We find that production costs in the US significantly exceed those in China due to higher capital intensity and input costs. Our analysis reveals that a majority of modeled projects in the US are not competitive at current market prices. We identify key cost drivers, including capital costs, economies of scale, and input material prices, and explore pathways to improve the competitiveness of US graphite production, such as supportive financing and process innovation directions. The analysis of conventional graphite production costs at scale also informs ceiling costs for alternative, promising pathways such as methane pyrolysis and catalytic graphitization. This study highlights the challenges and trade-offs in building a diversified graphite supply chain and informs policy and investment decisions.

Problem

• Assessing US-China cost differences for battery-grade graphite production
• Identifying key cost barriers to US graphite supply chain competitiveness
• Exploring pathways to diversify global graphite supply for batteries

Innovation

• Process-based cost models for graphite production
• Identifying key cost drivers in US production
• Exploring methane pyrolysis for cost reduction