The Electric Vehicle Boom Relies on Graphite
In a recent interview Tesla Founder & CEO Elon Musk provided the following nugget regarding the battery-powered vehicles industry’s dependence upon graphite as a crucial input regardless of the fact that its batteries are widely known as lithium-ion batteries:
“The Lithium is actually 2% of the cell mass […] It sounds like it’s big because it’s called Lithium-Ion but our factory should be called ‘Nickel Graphite.’”
The clean energy vehicle story is one of the main investment themes of 2016 and with each Tesla vehicle requiring roughly 80 pounds of graphite, demand for graphite is just getting started. Moreover, the global graphite supply/demand dynamic is becoming increasingly tenuous with China accounting for 70% to 80% of the world’s graphite supply. Moreover, approximately 70% of Chinese production is fine or amorphous graphite while 30% is flake.