Which components in your supply chain do China’s new graphite restrictions affect?

At the end of October, China announced new restrictions to graphite exports, a key material in lithium ion batteries. Lithium ion batteries are frequently used in consumer electronics including laptops, smartphones, bluetooth headsets, and more. They’re also a major component to electronic vehicles. 

This move follows on the heels of the germanium and gallium export restrictions issued by China in July and enacted in August, adding new layers to the technology trade war between China and the United States. 

What is graphite used for?

Graphite is currently used in the anode of lithium ion batteries. The unique properties of lithium ion batteries present numerous advantages for consumers, including: 

1. Electronics can run longer on a single charge
2. Stored energy lasts longer while the product is not in use
3. They charge at a faster rate than other battery types
4. They’re small and lightweight
5. Good temperature performance

According to the Northern Graphite Corporation, a major North American producer of graphite, graphite “represents almost 50% by weight of the materials needs of batteries, no matter the chemistry of the battery. Graphite is the anode in lithium ion batteries.”

The demand for lithium batteries is only growing. A report by the U.S. Department of Energy, noted that the worldwide demand for lithium batteries is expected to grow by “factor of 5 to 10 in the next decade.” As the need for electricity and smart technology grows, so too does the demand for lithium batteries, especially in the area of electric vehicles.

How much graphite do electric vehicle batteries require?

The average electric vehicle contains 70 kg or approximately 154 lbs of graphite, while hybrid cars contain around 10 kg or 22 lbs. Global demand for graphite sat at 77,000 tonnes in 2023, although that number is expected to triple in the next decade as demand for smart consumer electronics and electric vehicles rise. 

How big is the market for electric vehicles?

The U.S automotive market represents only 17% of the world’s total stock of electric vehicles, a small amount compared to Europe (31%) and China (44%). 

Only 7% of U.S. adults in a Pew Research Center survey said they owned an electric or hybrid vehicle, and the total amount of cars (a little shy of 2 million) account for less than 1% of all cars on the road. 

But a small start doesn’t hide a growing demand for more electric vehicles: Pew Research reports that “the fastest growth in EV sales” has come from Europe (60%) followed by China (36%) and the U.S. (17%). Backing this change in the U.S. are policies like the Biden Administration’s commitment to the development of more electric vehicle charging stations, as well as California Governor Gavin Newsom’s 2020 executive order to sell exclusively zero-emission vehicles in the state by 2035. 

Where does most graphite come from?

As of 2023, some 70% of all graphite produced comes from China. According to TechSpot, China accounts for “64% of the global production of natural graphite and more than half of the artificial equivalent…it refined 90% of the graphite into high purity materials” found in electric vehicles.

What are the new graphite restrictions issued by China?

Like the gallium and germanium restrictions of this summer, the new graphite restrictions will require exporters to apply for permits starting December 1st for two types of graphite, reports Reuters, “including high-purity, high-hardness and high-intensity synthetic graphite material, and natural flake graphite and its products.”

China defended the move as part of ensuring its global supply chain as well as safeguarding national security concerns. 

What electronic components are most affected by graphite restrictions?

According to Z2Data’s analysis the top five components that contain graphite are:

1. Tantalum Capacitors
2. Through Hole Resistors
3. Rotary Potentiometers and Rheostats
4. Tantalum Polymer Capacitors
5. Niobium Oxide Capacitors

Nearly 100,000 different types of electronic components contain graphite, although most do not contain a significant amount. While immediate impact remains uncertain, it’s imperative for companies to recognize the risks imposed by these new restrictions from China on their supply chain. 

See how you’re affected by regulation changes with Z2Data

Z2Data’s comprehensive database gives manufacturers instant insight on what parts of their product lifecycle are impacted by changing regulations around the world, including new graphite, gallium, and germanium restrictions by China. 

Whether it’s identifying which components in your product contain restricted substances, spotting single-country dependencies that add additional risk to your supply chain continuity, or buying product before news impacts pricing, availability, or lead time, Z2Data’s database offers instant visibility on the data manufacturers need to make effective decisions for their products ahead of competitors. 

If you’d like to learn more about how Z2Data’s database gives you visibility on your supply chain, visit https://www.z2data.com/supply-chain-watch/overview to learn more.