Simply Business

Demand for Graphite Might Rise By 2025 as E-Cars Become More Popular

Graphite Demands in the coming yearsThose who closely follow market trends for graphite prices should expect a potential shortage in the next decade due to the growing use of electric cars.

In the U.S., as much as 7 million electric vehicles will be present on roads and highways by 2025. This represents a significant increase from just 567,000. The anticipated shortage of graphite resources stems from the need to produce more lithium-ion batteries, which are used to power electric cars.

Electric Grid

Aside from a potentially limited supply of graphite, the issue of a stable power grid in the U.S. becomes a relevant concern for the industry. Some experts believe that the country isn’t ready for a surge in electric vehicles, especially since there have been fewer sources of baseload power in recent years.

Coal-fired plants have been significant sources of electricity, but over 600 facilities in 43 states have either closed or are due for retirement. Natural gas-power generators have become an alternative, yet the construction of pipelines has been complicated. As demand rises, the level of supply can’t keep up.

Rising Prices

The current level of natural graphite production in the world reaches around 1.2 million tons. It might seem like a huge volume, but the percentage used for electric car batteries ranges between 15% and 20%.

If the global electric car market wants to avoid a potential shortage, the level of output should increase by up to 3 million tons per year. This figure could only be sufficient to sustain a demand for 950,000 tons of battery-grade graphite per year. Thus, the actual figure might change in the future.

It’s more important to be updated with the market movement on graphite prices in the coming years due to the recent developments on the supply of materials for manufacturing electric cars.