US Electric Vehicles Face "Blood Shortage", Root Cause Surprisingly Linked to China
On July 17, the U.S. Department of Commerce announced that it would preliminarily impose anti - dumping duties ranging from 93.5% to 102.72% on Active Anode Material (AAM, i.e., graphite) from China. The final decision will be made before December 5. After adding the existing tax rates, the actual tariff level for graphite will reach an astonishing 160%.
In December last year, the Active Anode Material Manufacturers' Association of the United States (AAAMP) filed a complaint with federal agencies, requesting an investigation into whether Chinese enterprises violated anti - dumping laws. Graphite mixtures, composite materials of graphite compounds, and related products imported independently or as battery components were all within the scope of the investigation.
Half a year later, the U.S. Department of Commerce ruled that thanks to Chinese subsidies, these materials were sold in the United States at prices lower than the fair market price.
Graphite is mainly used as the negative electrode material in batteries. It can efficiently embed and release lithium ions, has good electrical conductivity and chemical stability, and provides a foundation for the charging and discharging of automobile batteries. Currently, although China is not the country with the highest graphite reserves in the world, it is the world's largest graphite producer and processor, controlling more than 70% of the global graphite supply.
Taking 2024 as an example, the United States imported a total of 180,000 tons of graphite products, two - thirds of which came from China. According to Bloomberg statistics, based on the 2023 import volume, the latest graphite tariff decree will affect imported products worth approximately $340 million (about 2.44 billion yuan).
Graphite Tariffs Tear the Supply Chain
For the global automobile manufacturing industry, the graphite supply of many automobile enterprises almost depends entirely on China. The implementation of the new tariff will have a great impact on U.S. automobile manufacturers such as Tesla. Earlier this year, the company submitted a document to the U.S. government, stating that the current technological capabilities of U.S. graphite producers cannot meet the quality and purity requirements of Tesla and other battery manufacturers.
In the United States, no company can produce artificial graphite that meets the specifications and standards required by Tesla. According to a set of data previously provided by Tesla, each hybrid vehicle requires about 10 kilograms of graphite, each pure - electric vehicle requires an average of about 99 kilograms, and Tesla's best - selling Model 3 requires 90 kilograms of graphite.
Subsequently, the cost soars.
When the domestic graphite in the United States cannot fill the supply gap from China, the additional import cost will ultimately be passed on to U.S. consumers. Relevant agencies calculate that the up - to - 160% tariff will increase the cost of each kilowatt - hour of battery cells by about $7 (about 50 yuan), which will offset the profits of South Korean battery manufacturers for about 1 - 2 quarters.
The second impact is the supply - chain risk.
As soon as the United States announced the anti - dumping duties, not only was Tesla panicked, but Panasonic was also restless. According to Panasonic's urgent statement, the quality of domestic graphite in the United States does not meet the standards, and the production capacity is only one - tenth of the demand. If alternative production capacity cannot be found in the short term, there will be a risk of disruption in the entire electric - vehicle supply chain, slowing down the overall production rhythm of automobile enterprises.
The International Energy Agency (IEA) released a report in May this year, stating that graphite is one of the key materials with a relatively high supply - chain risk, and it is urgent to promote supply diversification. Although silicon - based materials are expected to have more substitutes by 2030, in the short and medium term, graphite will still be the mainstream negative - electrode material for lithium - ion batteries.
In addition to the United States, South Korea, Poland, Japan, India, Thailand, Vietnam and other regions are all major importers of Chinese graphite. Among them, South Korea's graphite imports from China are second only to those of the United States. In recent years, enterprises such as Panasonic and LG have accelerated the pace of building factories in the United States to supply core customers in the North American market such as Tesla, but they still highly depend on Chinese graphite.
To reduce its dependence on Chinese graphite, the United States has also launched a series of actions. Taking Nevada as an example, the state planned to open a new graphite mine, but due to various policy obstacles, the commissioning date of the new mine is far behind schedule.
Of course, countries such as Canada, Madagascar, Brazil, Turkey, Tanzania and Mexico also have relatively rich graphite resources, but their fine - processing capabilities are limited. In the current anode - grade graphite market, China has mastered the complete technical chain from raw - material purification, spheroidization treatment to high - temperature graphitization. Most of the graphite raw materials in the above - mentioned countries still rely on China for deep processing.
The International Energy Agency (IEA) predicts that by 2040, the global demand for graphite resources is expected to reach 16.02 million tons, which will be more than four times the total demand in 2021. With the development of the global manufacturing industry towards low - carbonization, especially the electrification transformation of the automobile industry, the importance and demand for graphite as a basic material are constantly increasing.
Tesla Is the Hardest - Hit
In the first half of this year, the United States once included graphite in the tariff exemption list. At that time, a White House spokesman stated that "without Chinese graphite, the U.S. automobile battery production line would have to shut down."
Trump is well aware that the adjustment of graphite tariffs will have the greatest impact on the electric - vehicle industry. However, after a few months, he still decided to take action on graphite. From the perspective of the U.S. automobile industry, Tesla will be the most affected by this wave of new graphite tariff policies.
In the United States, Tesla is the largest end - consumer of Chinese graphite. The graphite required for the 4680 batteries produced by its U.S. factories basically 100% depends on imports from China. Statistics show that only in 2024, Tesla indirectly purchased 80,000 tons of Chinese graphite through suppliers such as Panasonic and CATL, accounting for 67% of the total Chinese graphite exports to the United States.
U.S. automobile enterprises such as Ford and General Motors, although they also import Chinese graphite through battery suppliers such as LG Energy and SK On, the scale is relatively small.
The tariff changes in graphite also pose a significant challenge to Panasonic. According to a report by the Nihon Keizai Shimbun in early 2025, Panasonic's second battery factory in Kansas, USA, which was originally planned to start production in March, is very likely to be postponed until after July. This factory was built to meet Tesla's demand, and the new tariff policy of the Trump administration will bring many uncertainties.
An important factor leading to the uncertainty of the factory's production time is the battery manufacturing cost. A considerable part of Panasonic's battery materials come from regions outside the United States. Battery materials such as graphite are mostly processed in China and then shipped to the United States, which are easily affected by policies such as tariffs.
A federal document submitted by Tesla at the beginning of the year shows that the fundamental reason why the company currently depends on Chinese graphite imports is that the domestic industry in the United States cannot meet its quality standards or the required production scale.
Tesla's battery executives also revealed that the company is promoting the transfer of its supply chain to the United States. However, it will still take several years to cultivate a domestic graphite industry that can meet the purity requirements for battery - grade graphite, which cannot be achieved overnight.
Since the beginning of this year, Musk has been facing one problem after another.
The "Big and Beautiful Act" signed by Trump terminated the $7,500 federal tax credit policy for U.S. consumers who purchase electric vehicles. According to Tesla's market share in the U.S. electric - vehicle market, relevant agencies predict that the cancellation of the subsidy will directly reduce the company's annual profit by approximately $1.2 billion (about 8.6 billion yuan).
After taking office, Trump stopped a federal electric - vehicle charging - pile subsidy program and withheld billions of dollars originally intended for building more electric - vehicle charging piles. Tesla was also one of the beneficiaries of the charging - pile subsidy program launched during the Biden era. The company has received a total of $31 million in funds from the federal government, which can help expand the coverage of charging piles in the United States.
Together with a series of tariff "combinations", each unfavorable factor has given Musk a huge headache. Now, with the impact of graphite tariffs, the policy shift of the Trump administration not only directly erodes Tesla's core revenue source but also affects Tesla's survival foundation from the aspects of supply chain and market demand.
At present, Tesla is facing the most severe market environment since its establishment. In the second quarter of this year, the overall U.S. electric - vehicle market shrank by 6.3% year - on - year, with only 310,000 vehicles sold. Tesla's market share dropped sharply from 75% in 2024 to 62%.
According to the plan, Tesla will announce its overall financial report for the second quarter in the near future. The direct impact of relevant policy changes on the company's operations may be glimpsed from the core data.
This article is from the WeChat public account "C Dimension". Author: Jackfruit. Editor - in - chief: North Shore. Editor: Wang Yue. Republished by 36Kr with permission.